The Small Industries Development Bank of India (SIDBI) plans to set up a venture capital fund with an initial corpus of Rs 300 crore dedicated for social ventures in the near future, a top bank official said today.
He said that fund raising was under process and was expected to be closed in next six months.
This will be third fund by the venture capital firm focusing on micro enterprises. Earlier, the bank has set a target to raise Rs 1,000 crore through a fund that will invest in small and medium enterprises.
"We have raised around Rs 540 crore out of the total target of Rs 1,000 crore as of now. Rest will be raised as and when there will be requirement of funds," Sarma said.
SIDBI, which usually raises fund from public sector banks and other financial institutions, is in talks with banks for raising this money, he added.
SIDBI Venture Capital, which is a subsidiary of SIDBI, has two funds since its inception. Its first fund was called the National Venture Fund for Software and IT Industry with a corpus of Rs 100 crore. The development bank's second fund named as SME Growth Fund has a corpus of Rs 500 crore and is presently under divestment phase.
The bank plans to grow its outstanding loans by 20 per cent to Rs 60,000 crore by March 2012 from Rs 50,000 crore in FY11. The bank has also announced to disburse around Rs 1,000 crore of loan to micro-finance sectors during the current financial year.