Credit and finance for MSMEs: The MSME Ministry’s Rs 50,000-crore Self-Reliant India (SRI) fund, which is managed by the public lender State Bank of India’s (SBI) private equity arm SBICAP Ventures (SVL), has invested Rs 3,000 crore in more than 140 MSMEs, said SBI Chairman Dinesh Khara at an event on Monday. SRI fund is a SEBI-registered category-II Alternative Investment Fund (AIF) announced in May 2020. The fund operates through a mother-fund and daughter-fund structure.
“SBI has always recognised MSMEs as an important pillar of the economy contributing to a third of the country’s GDP. SBI, through SVL, is proud to be managing the SRI Fund which is now seen as a catalytic force in the Indian LP ecosystem with investments of Rs 3,000 crore in over 140 MSMEs (90 per cent are in the micro and small category) made through its daughter Funds,” Khara said at the event Pravah organised by SVL.
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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. Some of the daughter funds empanelled are TATA Capital Healthcare Fund, Aavishkaar India Fund, SVL-SME Fund, Gaja Capital India Fund, Avaana Sustainability Fund and ICICI Ventures’ India Advantage Fund S5 I.
Narayan Rane, Minister of MSME, Government of India present at the event said the fund has supported employment for more than 25,000 people so far, out of which, 20 per cent are women. “MSMEs face multiple challenges ranging from hiring talent to accessing capital at an affordable rate. SRI Fund addresses these challenges and supports them to break barriers, encourage corporatization and achieve their full potential.”
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Rane had informed the Lok Sabha in February last year that around 5,000 MSMEs are expected to benefit from the SRI fund. “Assuming an average investment of Rs 10 crore per MSME, approximately 5,000 MSMEs 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.
“To address the unresolved need for the capital of MSMEs, India needed to identify pools of equity risk capital which could be further leveraged to create a multiplier effect on the economy. Keeping this in mind, the Government of India launched SRI Fund to invest in PE/VC Funds, who would, in turn, raise 4 times additional capital from other investors,” said MSME Secretary BB Swain at the event.
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