The Hindu Business Line : SIDBI, German body tie up

The Small Industries Development Bank of India (SIDBI) and Kreditanstalt fur Wiederaufbau (KfW) of Germany have signed a loan agreement for a Line of Credit (LoC) of Euro 43.50 million (equivalent of Rs 255 crore) towards strengthening the growth and competitiveness of Indian small and medium enterprises (SMEs).

Mr N. Balasubramanian, Chairman, SIDBI, and Mr Christian Haas, Country Head, KfW, signed the agreement.

An official release said that this is a multi-agency/multi-activity flagship project on financing and development of SMEs in India with the prime objective of increasing the flow of credit to SMEs and supporting other development initiatives.

The project comprises lines of credit equivalent of Rs 780 crore from the World Bank and KfW and a technical assistance equivalent of Rs 220 crore from DFID, KfW and GTZ.

The banking division of the Department of Economic Affairs (DEA) in the Finance Ministry is the nodal agency and SIDBI is responsible for implementing the project. SIDBI has set up a dedicated project management division at New Delhi for the implementation of the project.

The objective of this project is to improve SME access to finance (including term finance) and business development services, thereby fostering SME growth, competitiveness and employment creation, which are key to achieve the Government's overall objective of economic growth and poverty reduction.

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