SME Financing & Development

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The objective of the Small and Medium Enterprise (SME) Financing and Development Project is to improve SME access to finance (including term finance), and business development services, thereby fostering SME growth, competitiveness, and employment creation, key to achieving economic growth and poverty reduction. The project has three main components: 1. Credit Facility (CF) - financed through the Bank's US$lOO million, counterpart funds of US$lO.O million - which will address term financing constraints faced by banks in their SME lending, and hence, enable SMEs to access longer term funds needed for capital formation, and technological up-grading. 2. Risk Sharing Facility (RSF) - financed through the Bank's US$20 million, donor/SECO - State Secretariat for Economic affairs, Government of Switzerland - funds approximately US$5.0 million - designed to accelerate commercial bank financing to SMEs, through the establishment of a commercially viable, self-sustaining Risk Sharing Guarantee Company (RSGC) that will provide partial credit risk cover to banks for their SME lending portfolios. 3. Policy and Institutional Development Technical Assistance (TA) program - financed through DFID - Department for International Development, UK - US$37 million equivalent, and counterpart funding of US$1.4 million - designed to address the longer term developmental challenges of policy, regulatory, and institutional reforms, and as well, capacity building of small Industries Development Bank of India (SIDBI), and commercial banks, to support efficient SME financing and business development services.