Sidbi-Nabard tie up to boost micro credit

New Delhi, March 24 | Updated: Mar 25 2005, 05:30am hrs
The Small Industries Development Bank of India (Sidbi) and National Bank for Agriculture and Rural Development (Nabard) are teaming up to expand the countrys micro-credit network and penetrate deeper to the grass-roots. Sidbi has recently identified five new models for a more broadbased credit expansion. These are the self-help group (SHG) model, Gramin and Asa models of Bangladesh, the joint liability group model and the individual credit lending model.

Till now Nabard alone has been working on credit linking self-help groups. A large number of SHGs have been linked to commercial and co-operative banks by Nabard in the process. "Sidbi on the other hand has been extending credit to small entrepreneurs in both urban and rural poor through micro-finance institutions," Sidbi chairman N Balasubramaniam told FE. Since Sidbi has identified a broad-based model it is now interested in working hand-in-hand with Nabard to reach especially those below poverty line (BPL).

"Sidbi is considering whether it should partake of the Rs 200 crore fund set up under Nabard for capacity building of financial institutions and providing equity support to small entrepreneurs," the chairman said. The corpus of the fund has been raised from Rs 100 crore to Rs 200 crore in the recent Budget announcement made by finance minister P Chidambaram.