Lender to small industries SIDBI has signed an agreement whereby it will handhold the Capital Small Finance Bank (CSFB) to enable it to provide loans at a concessional rate to MSMEs.
The Memorandum of Understanding signed between the Small Industries Development Bank of India (SIDBI) and CSFB is aimed at promoting and strengthening the micro, small and medium enterprises (MSMEs) through a multi-pronged strategy comprising of concessional funding at MCLR of CSFB (presently 9.6 per cent) under refinance from SIDBI.
The MoU also envisages joint financing/co-financing of MSMEs for capital expenditure under ‘SIDBI Make in India Soft Loan Fund for Micro, Small & Medium Enterprises’, popularly known as SMILE, at a concessional rate of 9.60 per cent by SIDBI along with working capital finance from CSFB at competitive rate, would be pursued proactively.
The resources and expertise of SIDBI in MSME financing and outreach of CSFB in MSME clusters of Punjab are proposed to be leveraged.
“This initiative of SIDBI and CSFB will go a long way in creating a conducive ecosystem for MSME desirous of accessing concessional/composite funding in the State of Punjab.
“Further, SIDBI and CSFB shall also explore ways and means to enhance reach and use of facilities provided under the Government of India’s Stand up India scheme and the Stand up India/Udyami Mitra portals,” SIDBI stated in a release.
Besides, the MoU also envisages that the promotional and developmental activities of SIDBI could be taken up jointly with CSFB for the benefit of MSMEs in the areas of skill development, technology and financial linkages, human resources development, energy saving, etc. and for promoting digital financial inclusion initiatives.
“CSFB has taken several steps in the last year to proactively reach out to the micro and small enterprises and has accordingly been expanding it branch network continuously. The MoU with SIDBI shall give a further boost to the MSE segment by reducing cost of credit for the small borrowers,” CSFB Managing Director SS Samra said.
Source: Times of India
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