Credit and Finance for MSMEs: Principal financial institution for MSMEs, Small Industries Development Bank of India (SIDBI) on Sunday said it has sanctioned Rs 837 crore under its SIDBI Cluster Development Fund Scheme (SCDF) to the Government of Odisha to support the development of 18 MSME infrastructure projects in the state. The projects, which would be implemented by Odisha Industrial Infrastructure Development Corporation (IDCO), included five new MSME parks, construction of 11 workers’ hostels and two projects for supporting infrastructure to MSMEs.
“The thrust shall be laid on clusters in sectors/subsectors which can directly benefit the MSMEs in the state and to bring them to a level ‘NEXT’ wherein they emerge vibrant by moving higher on the value chain and become sustainable. SIDBI shall complement its offerings in the State with its customized direct lending products being channelized in the supported clusters, thereby setting an example for other institutions to adopt and replicate,” said Sivasubramanian Ramann, CMD SIDBI said in a statement.
SIDBI may also look at supporting the soft infrastructure issues in select clusters relating to technology, skilling/upskilling, energy efficiency, market and credit connect, on a need basis, Ramann added. During his meeting with Suresh Chandra Mahapatra, Chief Secretary of Odisha, Pradeep Kumar Jena, Additional Chief Secretary and other senior state government officials, Ramann apprised about various initiatives by SIDBI in the state including the recent sanction of financial assistance of Rs 200 crores by SIDBI’s wholly-owned subsidiary MUDRA to Odisha-based non-banking financial company-microfinance institution (NBFC-MFI) Annapurna Microfinance.
The SCDF scheme provides moderately priced loans to state governments for upgrading various existing MSME Clusters and also for the creation of new industrial infrastructure in states, SIDBI said.
Last year, the bank had collaborated with state governments of Tamil Nadu and Assam to provide financial support under SCDF for cluster development. Some of the engagements in clusters by SIDBI were the EU Switch Asia programme apart from the setting up of Project management Units (PMUs) in various states. The EU Switch Asia programme in total nine states, including Assam, Arunachal Pradesh, Meghalaya, Mizoram, Odisha, Chhattisgarh, etc., aimed at promoting bamboo-based enterprises and generating green jobs. SIDBI said it aims to strengthen the programme it runs in five districts of Odisha — Balangir, Bargarh,Sambalpur, Sonepur, Anugul.
On the other hand, PMUs designed programmes related to equity support, resolution for stressed units, interest subvention and suggesting changes to existing schemes and projects in respective states, if required, to remove barriers to MSMEs’ growth. So far, SIDBI has signed memorandum of understandings (MoUs) with around 15 states to set up PMUs. On Sunday, SIDBI had announced an MoU with the Odisha government as well for the setting up of a PMU.
SIDBI’s support to various state governments has come in the backdrop of suggestions made by the UK Sinha Committee’s report on MSMEs in 2019. The report had recommended the government for deploying the priority sector lending (PSL) shortfall to SIDBI on the lines of Rural Infrastructure Development Fund (RIDF) of NABARD, for lending to state governments as soft loans for infrastructural and cluster development.