The Hindu Business Line : SIDBI in talks with World Bank for $200-m loan

THE Small Industries Development Bank of India (SIDBI) is in talks with the World Bank for a $200-million (about Rs 900-crore) soft loan. The loan will augment the bank's lendable resources and, being a soft loan, also lower the cost of borrowing.

Part of the amount is likely to be a grant from the World Bank. SIDBI could use the grant funds for "ancillary activities" such as venture financing, the Chairman and Managing Director, Mr V.K. Chopra, told Business Line.

He added that the bank's direct lending (as opposed to refinancing to banks) was on the rise.

About 40 per cent of the disbursements of around Rs 3,100 crore in April-December 2003 went towards direct lending.

Mr Chopra said that SIDBI had been able to bring down its cost of funds, from around nine per cent last year to around six per cent now, by repaying costlier loans and borrowing cheaper.

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