SIDBI, RRBs Explore Expansion of MSME Co-Lending to Boost Rural Credit Access

New Delhi, Aug 26 (KNN) The Small Industries Development Bank of India (SIDBI) has held a conclave with heads of Regional Rural Banks (RRBs) to explore the expansion of its MSME co-lending arrangement, aimed at improving credit access for borrowers in rural and semi-urban areas.

The conclave, chaired by Sanjay Lohiya, Secretary, Department of Financial Services, was attended by Manoj Mittal, CMD of SIDBI, senior officials from DFS, SIDBI and NABARD, and chairpersons of all 28 RRBs.

The Secretary highlighted the need to scale up MSME lending by combining SIDBI's expertise in understanding MSME credit requirements with the extensive reach of RRBs across smaller towns and villages. 

The arrangement is also expected to help RRBs diversify their loan portfolios, while rule engine-based underwriting could support asset quality.

Officials also emphasised the use of MSME cluster data for a more targeted lending approach and encouraged RRBs to support India's next-generation manufacturing ecosystem and improve financial awareness among MSMEs.

SIDBI's Co-Lending Origination Platform provides an end-to-end digital and paperless loan process, enabling faster in-principle sanctions, documentation and direct disbursement into borrowers' accounts.

Following encouraging results from pilot implementation at three RRBs, the programme is proposed to be expanded to more RRBs, with a focus on meeting the credit requirements of micro and small enterprises in rural and semi-urban areas.

(KNN Bureau)