Assistance through Banks, NBFCs, SFBs

Assistance to NBFCs

The Non-Banking Financial Companies (NBFC’s) including the Asset Finance Companies / Loan Companies/ Infrastructure Finance Company (both in the category of Deposit taking and Non Deposit taking) registered with RBI which are engaged in financing enterprises in the Micro, Small and Medium sector [MSME].

All of these entities (as defined by MSMED Act 2006) are eligible for resource support from SIDBI, subject to meeting the prescribed benchmarks for Sanction.

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Micro and Small Enterprises Refinance Scheme (MSERS)

Scheduled Banks (including State Co-operative Banks, Urban Co-operative Banks, Private Sector Banks, and Foreign Banks etc.) and select Financial Institutions are eligible for support by SIDBI under the MSERS scheme. This also includes Regional Rural Banks, basis their capacity building.

SIDBI's assistance is also available under the scheme to those banks having sound financials with following eligibility criteria:

  1. Should have been in operation for a period of 3 years
  2. Should have earned profit during the last 2 years
  3. Should have sizeable outstanding portfolio/ financial assistance to micro and small enterprises (MSE) and
  4. Should have strong fundamentals based on last audited balance sheet viz.
    1. Net worth of not less than Rs.50 crore
    2. Capital to risk weighted assets (CRAR) of not less than 9%; and
    3. Level of Net NPAs not exceeding 10%.

Further, the assistance under the scheme will also be subject to the exposure limit fixed for each bank by SIDBI.

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Assistance to Small Finance Banks (SFBs)

Two facilities have been introduced to strengthen Small Finance Banks (SFBs) and augment their equity and resource base:

  • Provide equity investment for setting up/capitalisation of the SFBs to meet their initial equity/capital gap; in particular, the requirement for equity from domestic sources.
  • Post transformation of the MFIs/NBFCs into SFBs, SIDBI has been providing refinance support

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