SIDBI expects 10 pc rise in SME loan disbursement this fiscal

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Namrata Kath Hazarika | 31 Jul, 2013
The Small Industries Development Bank of India's loan disbursement to the Micro, Small and Medium Enterprises (MSMEs) is expected to increase by 10 per cent in the current financial year, said N K Maini, Deputy Manager, SIDBI in New Delhi on Tuesday.

"SIDBI disbursed Rs 40,000 crore last year. It is expected to increase this year by 10 per cent," he said this on the sidelines of a conference organized by PHD Chamber.

He also said that there is a need to expand the tenure of risk capital and venture capital funding. Pointing out his views in this context, he said, "The risk capital and venture capital normal tenure requirement is 7 to 10 years. The tenure of this fund is currently 3 years. We have taken up the issue with the Finance Ministry and we hope we are able to resolve the issue shortly."

In 2012-13 Budget, then Finance Minister, Pranab Mukherjee announced setting-up of a Rs. 5000 crore India Opportunities Venture Fund with SIDBI. This was in order to enhance availability of equity to the Micro, Small and Medium Enterprises.

SIDBI has identified four niche areas, including risk capital; receivable financing, financing services sector and sustainable financing, where MSMEs need finance support.

"SIDBI has repositioned its business model. We have created certain niche areas of financing. These are the areas where SIDBI is trying to pervy fund to MSMEs," Maini also said.

MSME contributes over 36 per cent to the country's total exports and 45 per cent to the manufacturing output. The sector employs about 60 million people and contributes 8 per cent to the country's GDP.