To help MSMEs benefit from the Make in India programme, SIDBI launched SMILE scheme to provide soft loans in the nature of quasi-equity and term loans on relatively easier terms to these enterprises. With SIDBI’s focus on startups and Make in India funding, Kshatrapati Shivaji, Chairman and Managing Director of the Small Industries Development Bank of India (Sidbi), shares the way forward.
What has been the SME disbursement in the last financial year by SIDBI?
There are two objectives we are serving. We are directly providing the funds. Last year my book size was around 60,000. This year it would be 75,000 plus. We try to increase the financial muscle of all the financial players. My target is the base, at the cutting edge level how much credit need you have and are you getting it or not, either directly or through other financial institutions. We have all the players like banks, NBFCs, microfinance. Taken together, I can tell you the microfinance institutions unless it is mudra where it is a SIDBI group of company. I can tell you that the target is 1,22,000, which is herculean. I ensure that my borrower and entrepreneur get what all they need and for that these are the initiatives which we are taking. Rs One lakh, 22 thousand crore target has gone to 1 lakh, 33 thousand units.
Any new initiatives/ policy you have taken for startups?
For startups we have Fund of Funds including venture funds. There is large number of venture capitalists in the country. We have signed an MoU with LIC. They are becoming co-investors in the Fund of Funds for the risk capital.
What is the status of collateral free loans which SIDBI has been providing?
This is the aim of credit delivery which we have been able to dispense through multiple guarantee mechanism. We provide loans up to 1 crore to MSMEs. Last year 25,000 crore was the cumulative guarantee to one lakh, 11 thousand people. Besides, there are functional based guarantee loans. Like mudra loan it gives guarantee trust. At Stand Up India there was another guarantee. For education there is education loan guarantee, factoring guarantee is there. I can tell you more than dozen broad major action is completed on the ground.
This article first appeared in the Indian edition of Entrepreneur magazine (July 2016 Issue).