SIDBI signs MoU with Federal Bank to strengthen MSME financing

Small Industries Development Bank of India (SIDBI) and The Federal Bank Limited (FBL) signed MoU for financing MSMEs for growth and development of MSME Ecosystem. The arrangement is for providing financial assistance in the field of project finance, machinery/equipment finance, working capital (including letter of credit and bank guarantee), loan against property, etc. Further, joint financing shall also be explored while extending credit facilities to MSMEs. The MoU was signed by Prakash Kumar, Deputy Managing Director, SIDBI and Harsh Dugar, Executive Director, FBL in the presence of senior SIDBI and FBL officials.

Since its formation in 1990, SIDBI acts as the Principal Financial Institution for Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector as well as for co-ordination of functions of institutions engaged in similar activities. SIDBI executes its mandate through Indirect Lending (based on multiplier effect/larger reach in financing the MSME sector), Direct Lending (aims to fill the existing credit gaps in the MSME sector), Fund of Funds (boosts entrepreneurship culture by supporting emerging startups), Promotion and Development (promoting entrepreneurship and handholding budding entrepreneurs through credit-plus initiatives), Facilitator (playing a facilitator through roles like Nodal Agency for the MSME oriented schemes of the Government).