SIDBI eyes growth from small-ticket MSME loans

The Small Industries Development Bank of India aims to grow its assets by a quarter by accelerating its lending in the segment where the demand is for loans of up to 5 lakh, its chairman said.

The state-owned lender will press the pedal on its ‘Prayaas Programme’ that targets businesses that are looking for loans between 1 lakh and 5 lakh, which are not served by other established lenders such as banks and even nonbanking finance companies in general.

“The development finance institution is ramping up the lending between 1 lakh to 5 lakh as this sector is underserved,” said SIDBI chairman S Ramann. “Total MSME credit in the country is about 24 lakh crore. Another 25 lakh crore is needed in the next three years to satisfy the credit demand of MSMEs.”

State-run lenders and specialised institutions are accelerating lending to small and medium enterprises as the government looks to create more employment opportunities. The state and the regulator have designed multiple programmes to ensure that credit flows to the segment that serves millions.