SIDBI Pilots Co-Lending With Regional Rural Banks To Boost Rural MSME Financing

New Delhi, May 26 (KNN) The Small Industries Development Bank of India (SIDBI) is actively developing a co-lending model with Regional Rural Banks (RRBs) to extend affordable credit to micro, small and medium enterprises (MSMEs) in rural and semi-urban India.

At the institution’s 37th Foundation Day event, SIDBI Chairman and Managing Director Manoj Mittal said, "We have done a pilot with a few branches of three RRBs, and the results have been quite encouraging. With 23 branches of RRBs, we intend to extend affordable MSME credit at a scale to every corner of Bharat," as quoted by ANI.

The co-lending initiative was conceptualised following directions from Finance Minister Nirmala Sitharaman during a review meeting of RRBs. 

He emphasised, "SIDBI was tasked with creating a risk sharing mechanism with the RRBs. The whole project required convincing RRBs, regulatory approvals, creating loan policies for each RRB, and a friendly technology platform." 

The model combines SIDBI's MSME financing expertise and digital capabilities with the extensive grassroots reach of RRBs, with the aim of strengthening last-mile credit delivery across underserved regions, Mittal highlighted.

Mittal said SIDBI plans to scale its partnerships with industry associations from 105 to 500 over the next two years as part of its broader MSME sector development mandate.

(KNN Bureau)