Credit and Finance for MSMEs: Around 5,000 micro, small, and medium enterprises (MSMEs) are expected to benefit from the government’s Rs 50,000-crore Self Reliant India (SRI) fund, according to the MSME Minister Narayan Rane. Announced by Finance Minister Nirmala Sitharaman back in May 2020, the fund, once operationalised, will make equity investments in MSMEs for their growth, listing on stock markets, and global expansion. SRI Fund is a SEBI-registered category-II Alternative Investment Fund (AIF) that will operate through mother-fund and daughter-fund structure.
“Assuming an average investment of Rs 10 crore per MSMEs, approximately 5000 MSME are likely to be benefited,” according to the information shared by Rane in Lok Sabha in a written reply on Thursday. The scheme is being implemented by a special purpose vehicle called NSIC Venture Capital Fund Limited (NVCFL). Rane said a commitment of Rs 1,080 crore has been approved so far, as informed by NSIC Venture Capital Fund Limited.
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The government is the sole anchor investor with the initial budgetary support of Rs 10,000 as the mother fund. The rest 80 per cent of the Rs 50,000 crore fund will come from daughter funds that will raise capital from outside sources such as banks, financial institutions, HNIs, venture capital and private equity investors, institutional investors, public sector units, pension funds, foreign developmental institutions, etc., according to the scheme’s guidelines approved in September last year.
Currently, five daughter funds viz., MegaDelta Fund I, Carpediem Capital partners Fund II, BanyanTree India Growth Capital Fund, Stakeboat Capital Fund II, SVL-SME Fund (Neev II) were mentioned on the NVCFL portal. The deployment of funds will be in phases as per demand raised by the empanelled daughter funds, MSME Ministry had said in its 2021 year-end review.
“MSMEs as per the definition given in the MSMED Act shall be eligible provided, after assessment, they are found viable, have a positive growth trajectory, and have a defined business plan for growth. Previous three years CAGR will be considered,” the minister said.