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SIDBI has constituted an advisory committee on NBFCs ( comprising senior industry leaders, representatives from the Finance Industry Development Council (FIDC), and domain experts to strengthen its role to support the growth of the NBFC sector, especially smaller entities
The first meeting of the advisory committee was held on July 20 at the Development Finance Institution’s (DFI) Mumbai office, per a SIDBI statement.
SIDBI has also initiated the process of setting up an NBFC Growth Accelerator Programme in a tie-up with GAME (Global Alliance for Mass Entrepreneurship) for the capacity building of the smaller- and lower-rated NBFCs for handholding of smaller NBFCs.
Sivasubramanian Ramann, CMD, SIDBI, said multiple-level interventions by the DFI in this regard are expected to culminate in enhancing the level of corporate governance in the smaller NBFC segment, accelerate the access of such NBFCs to institutional credit at competitive rates, and mainstreaming of a larger number of NBFCs, resulting in channelising higher credit in the MSME space.
No support system
He said smaller NBFCs, despite their sound business models and potential to play a much bigger role in financial inclusion, struggle to grow in scale due to inadequate resource support from conventional banking system, including heterogeneity of the space, absence of reliable data on their operational aspects, concerns about corporate governance, and lower external credit ratings, among others.
“SIDBI has taken various measures to deepen credit markets for MSMEs, especially in the underserved districts and regions by handholding private lenders like NBFCs. It has been engaging with smaller- and lower-rated NBFCs for quite some time now,” said the DFI. The DFI recently launched a Scheme of Developmental Assistance for extending financial assistance to below investment grade/ unrated NBFCs.
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