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Small Industries Development Bank of India (SIDBI) has launched loan syndication services to facilitate adequate and timely credit to the micro, small and medium enterprises (MSME) sector.
SIDBI, the principal financial institution for the financing and development of the MSMEs, has partnered banks, rating agencies and accredited consultants.
A Memorandum of Understanding was signed with six public sectors lenders — Bank of India, IDBI, Central Bank of India, Indian Overseas Bank, State Bank of Bikaner and Jaipur and Dena Bank — and six credit rating agencies — SMERA, CARE, ICRA, CRISIL, FITCH and BrickWork Ratings.
MSME financing
Former SEBI Chairman Damodaran indicated that the initiative could be a game changer for flow of credit to the MSME sector. It is a service whose time has come for it to effectively address the pain areas in MSME financing.
S. Muhnot, CMD, SIDBI, said: “This initiative will address the current problems such as incomplete application or data from applicants resulting in delays in credit delivery by banks.’’
He also spoke of SIDBI niche products such as risk capital to meet the equity/quasi equity requirements of MSMEs, concessional finance for sustainable development/cleaner production projects, setting up of credit advisory centres at MSME cluster level to provide hand-holding, financial literacy etc. to MSMEs and capacity building of MSME sector stakeholders.
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