Mumbai, Jul 15 (KNN) The Small Industries Development Bank of India (SIDBI) said it has set aside Rs 2000 crore fund for a fund-of-funds to pick-up equity in start-ups under the Rs 10,000-crore corpus announced in the budget.
 
SIDBI will use a part the remaining Rs 8,000 crore of the budgetary allocation to extend soft loans to micro, small and medium enterprises (MSMEs) at concessional rates, SIDBI CMD Kshatrapati Shivaji told reporters here on Tuesday. 
 
Chairman and Managing Director, SIDBI, said the SMILES Fund (Small and Medium Enterprise Soft Loans Scheme) has been carved out of the Rs10,000 crore allocated by the RBI to SIDBI from banks’ priority sector lending (PSL) shortfall for a period of three years.
 
While about Rs 2,000 crore of this will go into investment in funds started by State Governments and financial institutions for investment in start-up companies, the balance will go to support SMILES, he added. He pointed out that there will be no upper ceiling on the amount of funds that can be raised under SMILES. Top-rated MSMEs could get soft as well as term loans at 10 per cent.
 
Under the scheme, start-ups and MSMEs can get soft loans at 10-12 per cent interest, which is lower than what banks offer, he said.
 
Meanwhile, SIDBI on Tuesday signed a Memorandum of Understanding with e-commerce player Snapdeal to provide financial support to its MSME vendors.
 
Under the MOU, Snapdeal’s MSME vendors can scale up their online business via financial support from SIDBI. (KNN Bureau)