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NSE Signed a MoU with SIDBI for Debt Capital Platform for MSMEs

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NSE joins hands with SIDBI for debt capital platform for MSMEsOn 2nd March 2021, the National Stock Exchange of India Limited (NSE India) signed a Memorandum of Understanding(MoU) with the Small Industries Development Bank of India (SIDBI) for the cooperation in the various Micro, Small and Medium Enterprises (MSMEs) initiatives of NSE and SIDBI and to explore the feasibility of debt Capital Platform for the MSMEs.

Features of the MoU:

i.The MoU enables the cooperation between NSE and SIDBI for the benefits of the MSME sector.

ii.The cooperation between NSE and SIDBI will enhance the development of the MSMEs and increase the reach of MSME programs of NSE and SIDBI.

iii.Under this MoU, SIDBI will work with NSE to explore the feasibility of the debt platform for the unfulfilled needs of the MSME sector.

  • This is in regards to the recommendation of the Expert committee on MSMEs headed by U K Sinha to develop additional instruments for debt and equity that helps to crystallize the sources of fundings for MSMEs.

MSME initiatives:

i.Both NSE and SIDBI run several programs for the betterment of MSME.

ii.The major MSME initiatives to solve the working capital problems faced by small businesses were SME Exchange, NSE Emerge and TreDs platform of Receivable Exchange of India Ltd (RXIL).

Reason for the Collaboration:

All lenders (i.e. public or private) required to follow the Reserve Bank of India’s priority sector lending guidelines, they look for efficient mechanisms to reach farmers, especially small holders. Many banks fall short in meeting these targets in the absence of these mechanisms. So, Canara Bank, through this strategic association with Arya, will be able to help MSMEs.

 

SME Exchange:

SME exchange is a stock exchange dedicated for trading the shares of Small and Medium scale Enterprises (SMEs) who have difficulties to get listed on the Main exchange.

NSE EMERGE:

i.EMERGE is a credible and efficient market place to bring about convergence of sophisticated investors and emerging corporates in India.

ii.This provides opportunities to informed investors to invest in emerging businesses with growth plans, innovative business models and commitment towards governance and investor interest.

Receivable Exchange of India Ltd (RXIL):

i.Receivable Exchange of India Ltd (RXIL) a joint venture between NSE and SIDBI.

RXIL was the first entity to get RBI approval to launch Trade Receivables Discounting System (TReDS) Exchange in 2016.

ii.RXIL launched the TReDS Platform, India’s first TReDS Exchange as per the TReDS guideline issued by Reserve Bank of India (RBI).

iii.TReDS Platform was incorporated on 25th February 2016.

Recent Related News:

On November 30, 2020 Small Industries Development Bank of India (SIDBI) in partnership with India SME Asset Reconstruction Company (ISARC) has launched Asset Restructuring Module for MSMEs-Micro, Small & Medium Enterprises(ARM-MSMEs) in other words Do-It-Yourself (DIY) web module.

  • This web portal helps MSMSEs to get benefit of the Reserve Bank of India(RBI)’s one-time debt restructuring.
  • The portal is offered as part of SIDBI’s developmental initiatives.

About SIDBI:

  • SIDBI acts as the Principal Financial Institution for Promotion, Financing and Development of the MSME sector.
  • SIDBI operates under the Department of Financial Services, Government of India. SIDBI is one of the four All India Financial Institutions regulated and supervised by the Reserve Bank of India; other three are India Exim Bank, NABARD and NHB

Deputy Managing Director– V Satya Venkata Rao
Headquarters– Lucknow, Uttar Pradesh
Established on– 2nd April 1990 under an Act of Indian Parliament

About NSE:
NSE regulated by SEBI.
Managing Director & CEO– Vikram Limaye
Headquarters– Mumbai, Maharashtra
Incorporated in 1992