New approaches to MSME financing (SIDBI)

completed

Within the development policy focus of sustainable economic development, the refinancing of banks and financial institutions by the Small Industries Development Bank of India (SIDBI) and the SIDBI Foundation for Micro Credit (SFMC) in India is to be supported in the core competency area of financial system development. The FC measure includes a low-interest loan of up to EUR 100 million to SIDBI. The costs of the accompanying measure are estimated at EUR 1.0 million, of which EUR 0.5 million are to be financed from FC budget funds and EUR 0.5 million from a reprogramming of BM funds from the SIDBI microfinance credit line (BMZ No. 200866103 / 200870170). The objectives of the FC measure are to support SIDBI in reducing the existing financing gap for MSEs in the area of the missing middle segment and to promote the financial inclusion of informal enterprises. The focus of this project is therefore on the financing volumes of companies that can no longer be served by the microfinance sector for regulatory reasons, but do not yet have access to the commercial banking sector due to a lack of collateral and formalities. The FC measure thus contributes to achieving the overarching development policy goal of contributing to the sustainable broadening and deepening of the financial system in India. Furthermore, by better covering the high financing needs of the missing middle segment (MSS), the creation of jobs and income is supported and thus a contribution is made to reducing poverty among the population.