Small Industries Development Bank of India (SIDBI) has signed a Memorandum of Understanding (MoU) with Vijaya Bank for providing concessional finance to micro and small enterprises (MSEs).

The MoU aims at promoting and strengthening units in the MSE segment through concessional funding — that is, at the marginal cost of funds-based lending rate (MCLR) of Vijaya Bank under refinance from SIDBI.

The MoU also envisages joint financing/co-financing of MSMEs for meeting capital expenditure under the ‘SIDBI Make in India Soft Loan Fund for Micro, Small & Medium Enterprises’ scheme at concessional rate of 9.60 per cent, along with working capital from Vijaya Bank.

The resources and expertise of SIDBI in MSME financing and the outreach of Vijaya Bank are proposed to be leveraged.

This initiative of SIDBI and Vijaya Bank will go a long way in creating a conducive ecosystem for MSEs desirous of accessing concessional/composite funding.

Kishore Sansi, MD and CEO of Vijaya Bank, said the bank has taken several steps over the last year to pro-actively finance new entrepreneurs under the Centre’s new initiatives for MSMEs such as ‘Make in India’ and ‘Stand Up India’.

The partnership with SIDBI, he said, would further improve the financing of MSMEs.

This year alone, nearly 500 new entrepreneurs have been financed by Vijaya Bank to set up greenfield projects under the ‘Stand Up India’ scheme. Further, the bank has lent over ₹1,250 crore this year alone under the ‘Pradhan Mantri Mudra Yojna (PMMY).

Manoj Mittal, Deputy Managing Director, SIDBI, outlined the various initiatives taken recently by SIDBI for enhancing credit flow to the MSE sector.

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