Money & Banking

World Bank to help SIDBI float ‘livelihood bonds for women’

KR Srivats New Delhi | Updated on October 26, 2018 Published on October 26, 2018

World Bank is in talks with SIDBI to see if the latter can float ‘livelihood bonds for women’ to enable global financial flows into small and medium enterprises (SMEs) in the country, a top official said.

“There are investors out there who are ready to invest in empowering women and take a smaller rate of return. This is not CSR,” Junaid Ahmad, Country Director, World Bank, said at the first-ever SIDBI National Microfinance Congress.

SIDBI’s relationship with the retail side in India can drive its engagement with overseas investors, he said.

Ahmad sees SIDBI playing a “big role” in deepening access to capital markets in the coming days.

Ahmad also wanted SIDBI to play the role of counter-cyclical, intervening when markets are down to ensure that the MSME sector remains vibrant and stable.

“Whenever markets go through volatility, the biggest loss is at the lowest income level (small and medium enterprises). That role of playing counter-cyclical will increase for SIDBI as India gets more integrated with the global economy, which it must do and it is doing,” said Ahmad.

For the Indian economy to keep growing, it requires mechanisms for counter-cyclical, which will play a major role here, added Ahmad.

Sub-optimal

Ahmad said the economic size of SMEs is still sub-optimal in India. “Small and medium enterprises start off small and stay small in India,” he said, adding that there are real sector issues that come in the way of their growth. Being small has a major cost in making rapid strides in the manufacturing sector in a globalised environment.

Published on October 26, 2018
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