SIDBI, Capital Small Finance Bank tie up

Tribune News Service

Chandigarh, February 24

The Small Industries Development Bank of India (SIDBI) today signed an MoU with Jalandhar-based Capital Small Finance Bank (CSFB) to provide concessional finance to MSMEs.

The CSFB has 71 branches in Punjab and Chandigarh. Currently, out of a total loan book of Rs 1,200 crore, the MSMEs account for 22%. "CSFB is the first small finance bank to tie up with SIDBI and we expect this pact to go a long way in promoting the MSMEs. It will boost the MSE segment by reducing cost of credit to them," said Sarvjit Singh Samra, MD, Capital Small Finance Bank. 

The MoU is aimed at promoting the MSMEs through a multi-pronged strategy comprising concessional funding at MCLR (currently 9.6%) under refinance from SIDBI, joint financing/co-financing, cluster development and capacity building of CSFB officials. 

"The resources and expertise of our organisation in MSME financing and outreach of the CSFB in MSME clusters of Punjab are proposed to be leveraged. This initiative of SIDBI and CSFB will go a long way in creating a conducive ecosystem for MSME desirous of accessing concessional/composite funding in Punjab," said Manoj Mittal, Deputy MD, SIDBI.

Under the MoU, promotional and developmental activities of SIDBI could be taken up jointly with CSFB for the benefit of MSMEs in the areas of skill development, technology and financial linkages, HR, adoption of best practices by MSMEs, including cluster-based interventions in the areas of technology, energy efficiency, energy saving, etc. and for promoting digital financial inclusion initiatives.