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A Rs 5,000-crore India Inclusive Innovation Fund to cater to the credit needs of bottom of the pyramid enterprises among MSMEs is on the cards, Vivek Rae, Secretary, Ministry of Medium, Small and Micro Enterprise, said here on Friday.
To begin with, a corpus of Rs 500 crore would be set aside for the fund, in which the Government would put in Rs 100 crore, while the balance would be contributed by banks and financial institutions, he said while inaugurating a conclave on credit and finance for MSMEs, organised by the Confederation of Indian Industry here.
Rae said the scheme would be operationalised within three months and would take equity stake in companies at the bottom of the pyramid and promote venture capital among MSMEs.
Pitching for greater penetration of MSMEs in the banking system, Rae said such enterprises faced financial exclusion from the banking system, despite detailed guidelines by RBI to banks in this regard.
N.K. Maini, Deputy Managing Director, SIDBI, said there was a gap of about Rs 7 trillion for MSMEs, as reported by the IFC Report on SME Financing, which could be filled through both traditional and non-traditional modes of finance.
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