Credit for Rural MSMEs: Small Industries Development Bank of India, the principal financial institution for the promotion of MSMEs, announced entering into a partnership with the Indian Post Payments Bank (IPPB), a division of the Indian Post, under the ownership of the Department of Post, in a release. The partnership aims to connect the informal rural microenterprises with the formal financial sector to help them digitise their business activities, and access formal credit.
According to the release, SIDBI will take the benefit of the vast rural network of IPPB to reach out to the roots of the Indian villages. IPPB will support SIDBI’s customers to adopt digitisation through its merchant onboarding systems and help provide UPI and QR-based solutions, etc. Furthermore, upskilling the Dak Sevaks in supporting credit facilities to micro-enterprises will also be undertaken by the partnership.
Furthermore, the release states the announcement of a hackathon for Fintechs to be organised under the partnership for innovation in the financial services in rural areas to promote rural livelihood.
Sivasubramanian Ramann, said, “We look forward to a fruitful and meaningful partnership with IPPB which can make a positive impact on millions of informal rural enterprises in the country by improving their access to financial services and financial literacy.”
Launched in 2018, Indian Post Payments Bank is a fully-owned Indian government entity. The bank leverages the India Post network of 1,55,000 Post offices, of which 1,35,000 are situated in rural areas, along with 3,00,000 postal employees, to reach the last mile and connect rural India with banking services.
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Last week, Finance Minister Nirmala Sitharaman noted that there is a requirement to increase SIDBI’s share in direct finance in credit to MSMEs to meet the growing need for capital of such enterprises. Earlier, Sitharaman had also urged banks to map regional rural banks (RRBs) with MSME clusters and put greater thrust on increasing the network of rural branches in cluster areas identified by the MSME Ministry, FE Aspire reported.