Sidbi to launch venture capital fund for SMEs

The Small Industries Development Bank of India (Sidbi) will shortly launch a Rs 500-crore venture capital fund for small companies.

"Small Industries Development Bank of India has identified venture capital as a thrust area for the next five years to support innovative and high-risk small and medium enterprises (SME) ventures," Ajay Kapur, CEO of the Sidbi Venture Capital Fund, said at a PHDCCI seminar here today.

He said the Rs 500-crore fund would address the perennial problem of availability of timely and adequate financial support to SMEs. Apart from setting up a VC fund, Sidbi has also drawn up plans to fund companies at the state-level and tap international sources for cheaper funds.

"The Sidbi Credit Guarantee Trust Fund for Small Industries (CGTSI), which has a corpus of Rs 2,500 crore, is also geared up to offer collateral free loans worth Rs 1,200 crore to SMEs in the next three years," NK Maini, CEO, CGTSI, said.

CGTSI, which will offer loans through a single-window facility, targets to provide a maximum Rs 25 lakh to small companies.

Sidbi's credit guarantee arm has so far given loans worth Rs 294 crore to 17,625 units.