Credit and Finance for MSMEs: Principal financial institution for MSMEs SIDBI on Saturday announced a partnership, through an agreement, with Mumbai-headquartered urban co-operative bank SVC Co-operative Bank to extend refinance facility to facilitate improved credit flow to MSMEs. The agreement was signed by Ashish Singhal, MD, SVC Bank and Sanjeev Gupta, GM, SIDBI in Mumbai. The partnership signed will allow SVC Bank to tap into SIDBI’s refinance facility. SVC Bank is the first urban co-operative bank to enter into a refinancing partnership with SIDBI.
“We have now extended our partnership with various Scheduled Commercial Banks, SFBs and NBFCs to an urban co-operative bank. The focus is on aligning with the leaders across all segments, which can boost economic participation and upscale India’s most promising aspirational powerhouses termed as MSMEs,” said Sanjeev Gupta, General Manager, SIDBI in a statement.
As the nodal agency for the MSME-related schemes of the government, SIDBI provides refinance to primary lending institutions such as banks including small finance banks, non-banking finance companies, and microfinance institutions which in turn provide credit to MSMEs. SIDBI is also engaged in direct financing of small businesses through long-term loans, working-capital facilities, etc.
Commenting on the partnership, Ashish Singhal, Managing Director, SVC Bank said the bank has been supporting the MSMEs for more than 115 years (since its set up in 1906) and that access to affordable capital will prove to be a shot in the arm for the sector. “In line with the Government of India’s vision of an Aatmanirbhar Bharat, SIDBI has proven to be the driving force for resolving the issues relating to MSMEs. We are proud to partner with SIDBI as the first urban co-operative bank to participate in their vision of empowering the MSMEs,” said Singhal.
In January this year as well, SIDBI had announced sanctioning of Rs 650 crore in financial assistance to two small finance banks — AU Small Finance Bank and Jana Small Finance Bank — from the Special Liquidity Facility of Rs 16,000 crore sanctioned to it by the Reserve Bank of India in June last year to help MSMEs overcome Covid-induced business challenges.
SIDBI had disbursed Rs 1,43,758 crore loans in FY22, up 50 per cent from Rs 96,029 crore in FY21 while its total assets increased from Rs 1.92 lakh crore to Rs 2.47 lakh crore. The bank had a net profit of Rs 1,958 crore in FY22. In terms of default, the gross and Net NPA as a percentage of its net outstanding stood at 0.11 per cent and 0.07 per cent, respectively, as of March 31, 2022.