Credit and finance for MSMEs: The government Self-Reliant India (SRI) fund, which provides equity funding to small businesses, has deployed around Rs 2,000 crore in funding to 125 micro, small and medium enterprises (MSMEs) in the country, said Gaurang Dixit, Chairman and Managing Director, National Small Industries Corporation (NSIC) at The ScaleUp Summit 2022 organised by Financial Express Digital on Thursday.
SRI fund is a SEBI-registered category-II Alternative Investment Fund (AIF) announced in May 2020 and implemented by NSIC Venture Capital Fund Limited (NVCFL), a wholly-owned subsidiary of the government’s MSME growth agency NSIC. The fund operates through a mother-fund and daughter-fund structure and aims to invest Rs 50,000 crore into MSMEs.
The government is the sole anchor investor in the SRI fund with the initial support of Rs 10,000 as the mother fund. The rest 80 per cent of the Rs 50,000 crore fund will be raised by daughter funds from banks, financial institutions, HNIs, and others.
Dixit noted that the fund has empanelled 32 daughter funds in the past year including Aavishkaar India Fund IV, Avaana Sustainability Fund, Achieving Women Entrepreneurs Early Growth Fund I, Cornerstone Ventures Partners Fund I, Fireside Ventures Investment Fund III, Kae Capital Fund III, Tata Capital Healthcare Fund II and more, according to details available on NVCFL website.
“However, we cannot say that this will (fund) be sufficient to serve all our MSMEs because our ecosystem is so large. Hence, several such funds are required. MSMEs must be in the formal sector to get funding,” said Dixit.
Around 5,000 MSMEs are expected to benefit from the SRI fund, MSME Minister Narayan Rane had informed the Lok Sabha in February this year. “Assuming an average investment of Rs 10 crore per MSMEs, approximately 5000 MSME are likely to be benefited,” Rane had said. The fund aims to improve equity support available for MSMEs and boost their listing on stock exchanges as more businesses get into the formal fold of the economy.