SIDBI-AU small finance bank inks pact, fund of 200 crores for MSMEs on the agenda

New Delhi, Oct 30 (KNN) Eyeing at facilitating credit to the Micro, Small and Medium Enterprises (MSME) sector, the AU Small Finance Bank recently inked an agreement with the Small Industries Development Bank of India.

Under the agreement, a 200 crore fund is earmarked for providing loans to the Micro, Small and Medium Enterprises. Loans in the ticket size of 25 lakh to 2 crore would be funded under the program.

The main aim of the collaboration is to enhance the flow of credit to the MSMEs and the earmarked funds are to be disbursed over the next 12-15 months. Currently the bank expects the loan amount to successfully reach over 100 MSME units.

Under the advice of SIDBI, AU Bank will play the facilitating agency for the program as all the different processes including disbursement, monitoring and recovery will be managed by the AU Small finance bank.

However the appraisal of the proposal shall be done jointly by AU Bank and SIDBI.

Also under the agreement AU small finance bank and SIDBI will earmark a corpus of Rs100 crore for lending in this financial year. The loans will be offered at a rate of 10 per cent to MSMEs. The corpus for the subsequent financial years will be decided after mutual consultation and seeing the progress. (KNN/DA)