The Bank scaled new heights in FY 2020 in its endeavour to support MSMEs. It gives me pride in saying that the transformation journey that we started with Vision 2.0 has begun yielding fruit on the operational front, while adding new dimensions to our role of financing, promoting and developing the MSME sector, and coordinating its activities. Some highlights of the Bank's performance during the year are:
During FY 2020, the Institutional Finance loan book breached the landmark figure of ₹1.5 lakh crore and was at ₹1,55,429 crore, with 22.6% Y-o-Y growth. To ensure uninterrupted flow of credit to MSEs, the Bank disbursed ₹ 94,798 crore to Banks and SFBs during FY 2020. Apart from Banks and SFBs, NBFCs played a significant role in delivering credit to underserved segments and geographies. To address liquidity concerns of the NBFC sector, the Bank disbursed ₹3,650 crore during FY 2020, taking the total outstanding to NBFCs to ₹ 10,375 crore with a 10.7% Y-o-Y growth. New Age Fintech NBFCs also emerged as major player in the MSME lending space, and considering their potential reach, the Bank has piloted a scheme for New Age Fintech NBFCs and onboarded 10 Fintechs. As much as ₹75 crore was disbursed to Fintechs under the scheme during FY 2020.
Direct Finance operations of the Bank were reinvigorated by introducing new credit delivery models of Express Loan Service Centres (ELSCs) and Specialised Asset Recovery Branches (SARBs) to adopt a more focussed approach to enhance efficiency and productivity.
Further, to ensure faster credit delivery at affordable interest rates, the Bank launched 13 new Non-SMILE products during the year. An effective credit delivery model, clubbed with new products, has resulted in a 10.9% growth in direct credit outstanding, accompanied by a 26.8% growth in customer base.
While ensuring a smooth credit flow to MSMEs, the Bank has also focussed on micro-entrepreneurs at the bottom of the pyramid. Through the PRAYAAS scheme, the Bank has reached out to these entrepreneurs, and sanctioned ₹161.11 crore to 14,000 micro-entrepreneurs under partnership arrangements.
The Bank has scaled up its operations under the Government of India sponsored Fund of Funds to support the start-up ecosystem. Through Fund of Funds operations, the Bank has assisted 140 AIFs under various funds with a cumulative sanction of ₹6,154.71 crore and disbursements of ₹2,848.13 crore as on March 31, 2020. Disbursement under Fund of Funds for Start-ups has resulted in total investments of ₹3,582 crore to 338 start-ups and 158 growth companies.
In its endeavour to ease funding access to start-ups, the Bank organised the 2nd Investor's Day to bring together all stakeholders. It is heartening to note that out of 37 start-ups selected in 2 Investors' Day programmes, 31 attracted expression of interest from VC/PEs.To scale up the efforts in coming year, the Bank envisages organising a Global Investors' Summit; more than 500 start-ups, along with AIFs and Venture Capital industry experts, are expected to join in from all over the world.
MSMEs are the backbone of the Indian economy, contributing approximately 30% and 50% respectively to GDP and overall exports. There is no denying the fact that MSMEs will play a key role in India's vision of growing into a $5-trillion economy. Even though the COVID 19 pandemic has affected the scale of MSME operations and their profitability, especially small businesses, the steps taken by the Government are expected to greatly hasten the process of recovery and revival. The Hon'ble Prime Minister's vision of Self-reliant India and Vocal for Local will provide the much-needed impetus to help MSME products emerge as national and global brands in times to come. Further, the change in definition of MSMEs will bring mid-size service sector units under sectoral cover, which will go a long way in helping MSMEs to register vertical growth at the standalone enterprise level.
The Bank has continued to be a trusted agency for implementing several Government of India initiatives towards quick response to COVID-19. To help MSMEs during this crisis, the Bank has undertaken several initiatives through Direct Finance, Institutional Finance, Fund of Funds and Promotion and Development operations. The timely and targeted efforts of the Bank, such as liquidity support to Banks, NBFCs & MFIs under the ₹15,000-crore Special Liquidity Facility, support to MSMEs through SAFE, SAFE Plus, TWARIT and LIQUID schemes, and supporting livelihoods through activities under P&D and CSR, have helped MSMEs in this challenging period.
The Bank is pleased to play an important role in the national endeavour of supporting millions of street vendors under the PM SVANidhi scheme, being the scheme's implementation partner. The Bank shall engage deeply with stakeholders to make the scheme a success. Further, the Bank has set up Swavalamban Crisis Responsive Fund under the Swavalamban Resource Facility to partially offset the cost of joining/registration fee on the TReDS platform, thus providing MSMEs a much-needed breather from squeezed cash flow.
The Bank has undertaken a slew of initiatives under the themes of Sampark, Samwad, Suraksha and Sampreshan. Under Mission Swavalamban, the Bank has taken forward the mandate of inducing the entrepreneurship culture amongst youth, unserved/underserved segments and geographies, including those at the bottom of the pyramid, by disseminating information on entrepreneurship. Educational institutions are the best places to attract young minds to choose the path of entrepreneurship. In order to reach out to youth, the Bank has set up 118 Swavalamban walls and 15 Swavalamban clubs in educational institutes, and a short-term MDP for MSEs at IIM, Lucknow. The Banks has also setup 100 Swavalamban Connect Kendras (SCKs) in five states for profiling of aspiring entrepreneurs and to handhold them on an end-to-end basis in their entrepreneurship journey.
Apart from focus on youths, the Bank has also undertaken several initiatives to support microentrepreneurs, especially women, to take the next leap of growth. Through the Swavalamban Bazar in 12 cities, the Bank has provided a platform to 600+ micro-entrepreneurs to showcase their skills with a judicious blend of credit connect, market connect, financial literacy, design connect etc. Among other such initiatives, the Bank organised a Swavalamban Utsav for women beneficiaries of SIDBI's Mahila Udyami Sashaktikaran Project (MUSP), to showcase their products and generate new orders through networking. The Bank plans to organise 30 pan-India programmes under the Swavalamban Sankalp, in partnership with DICCI, to give a fillip to Standup India scheme. These demonstrative institutional measures not only benefit micro-entrepreneurs at the bottom of the pyramid, but also provide an opportunity to stakeholders to closely connect and to take these initiatives forward.
In line with the recommendation of the RBI Committee on MSME chaired by Sh U.K. Sinha, the Bank organised 10 state outreach programmes to enable a closer connect with State Governments on MSME issues and to disseminate information on digital platforms. Going forward, the Bank plans to organise 10 differentiated cluster outreach programmes.
I take pride in conveying that Swavalamban Silai School initiatives have been a huge success. Under this programme 1,000 silai (stitching) schools were established in 10 districts of 5 states, which has created and promoted 1,000 rural women as "Homepreneurs". The best part of this is that each Homepreneur has enrolled three other women, creating a multiplier effect that took overall enrolments to 3,273 as of March 2020. Countering the pandemic challenge, these Homepreneurs have demonstrated resilience and emerged as COVID warriors, supplying masks for the rural populace. Going forward, 700 more silai schools are planned in three states in Phase 2.
SIDBI ET India MSE Awards emerged as a unique national MSE award, with tremendous participation. The 2nd edition of the awards witnessed 13,000+ registrations and 500+ participants. The winning MSEs were benefited under MDP and mentorship programme of the Bank.
The Bank has undertaken several initiatives to address information asymmetry through a bouquet of Knowledge Products. While making its existing knowledge products, viz., MSME PULSE & CriSidEx, more comprehensive by incorporating additional parameters, the Bank launched Microfinance Pulse to provide data-backed policy insights for Microfinance sector stakeholders. In line with the recommendations of RBI's Expert Committee on MSME that knowledge products need to be brought out in vernacular language, MSME Pulse is available in Hindi, Marathi and Tamil apart from English. The Bank envisages publishing more knowledge products to provide data points on emerging aspects such as Fintech Lending and major industry sectors.
Further, to bring together all practitioners and stakeholders from Microfinance sector on one platform, the Bank successfully organised the 2nd edition of its Microfinance Congress that discussed emerging challenges, developing possible strategies and creating a vision for the Microfinance sector. It is heartening to note that the event witnessed significant participation from various stakeholders. Going forward, we will continue to undertake such initiatives.
The associate and subsidiary network of the Bank has contributed significantly in holistic development of the MSME ecosystem, and catered to various needs of the sector. CGTMSE has created 43.07 lakh MSE loan accounts, with a loan amount of ₹2.21 lakh crore. MUDRA has provided refinance support of ₹4,000 crore during FY 2020, with special focus on NBFCs and NBFC-MFIs. RXIL operates the TReDS platform, which has a registered base of 489 buyers, 1,787 MSME vendors and 35 financiers as on March 31, 2020. The RXIL TReDS platform has financed over 94,342 invoices aggregating ₹3,816.39 crore as of FY 2020 end. SVCL at present acts as the investment manager of eight funds with a drawable corpus of ₹1,754.24 crore. SVCL has also established the New Horizon Fund (NHF), and is in the process of establishing the Ubharte Sitaare Fund (USF). ACUTE Ratings has assigned 50,000+ SME Ratings and 8,000+ Bank Loan Ratings up to March 31, 2020.
Going forward, the Bank would engage deeply with MSMEs to support the sector during these challenging times. The Bank's vision and initiatives would always remain aligned with the national goals of empowering MSMEs and make them globally competitive. The Bank is focussing on strengthening its IT framework so that its workforce can serve MSMEs even more effectively in times to come.
