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MIDC and SIDBI Sign MoU to finance MSMEs

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The Maharashtra Industrial Development Corporation (MIDC) has entered into an agreement with SIDBI Venture Capital Ltd. to provide easy finance to micro, small and medium enterprises (MSMEs) for their growth.

  • Both the MIDC and Small Industries Development Bank of India (SIDBI) Venture Capital have jointly created funds to the tune of Rs 200 crore to provide immediate finance to the MSMEs.
  • MIDC has contributed Rs 75 crore.
  • SIDBI has provided the remaining Rs 125 crore.
  • The rate of interest at which finance would be provided to the MSMEs is yet to be decided

Objective :

  • To provide easy loan to MSMEs while going for expansion, product development and other business purposes.
  • To reduce the huge documentation process.
  • Entrepreneurs, who have innovative products but can’t start manufacturing due to lack of finance, will get a boost.
  • The MSMEs get loans from banks at interest rates of 12-14%. Hence, finance should be provided at lower interest rates so that the MSMEs are not burdened.
  • MIDC CEO Bhushan Gagrani and Ananta P Sarma, MD and CEO of SIDBI Venture Capital Ltd., signed the MoU in the presence of chief minister Devendra Fadanvis and state industries minister Subhash Desai during a conference for MSMEs in Mumbai.
  • The state government has adopted a policy to boost the MSMEs in Maharashtra. As part of it, the MIDC has tied up with SIDBI Venture Capital.
  • Chief Minister Fadnavis said the government is working towards reducing the number of approvals required for setting up a business to 25 from the current 76.
  • He also said the trade and investment facilitation cell, ‘Maitri’, started by the government in Mumbai, will now be launched across the state in phases.

SIDBI :

Full Form : Small Industries Development Bank of India
Headquarters :  Lucknow
Founded : 1990
Chairman :  Dr. Kshatrapati Shivaji

  • Mission : To facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system
  • Vision : To emerge as a single window for meeting the financial and developmental needs of the MSME sector to make it strong, vibrant and globally competitive, to position SIDBI Brand as the preferred and customer – friendly institution
  • SIDBI Among Top 30 Development Banks of the World
  • SIDBI also functions as a Nodal/ Implementing Agency to various ministries of Government of India viz., Ministry of MSME, Ministry of Textiles, Ministry of Commerce and Industry, Ministry of Food Processing and Industry
  • SIDBI ranked 25th both in terms of Capital and Assets.

Other entities of SIDBI :

  • Credit Guarantee Fund Trust for Micro and Small Enterprises – provides guarantees to banks for collateral-free loans extended to SME
  • SIDBI Venture Capital Ltd – venture capital company focussed at SME
  • ISARC –  India SME Asset Reconstruction Company
  • SME Rating Agency of India Ltd. (SMERA) – provides composite ratings to SME