SIDBI inks MoU with IOB to fund SME

SIDBI inks MoU with IOB to fund SME projects

The Small Industries and Development Board of India (SIDBI) on Friday inked an MoU with public sector Indian Overseas Bank to provide Rs 100 crore growth capital to micro small and medium enterprises.

SIDBI Chairman and Managing Director S Muhnot exchanged documents with Indian Overseas Bank CMD M Narendra at a function in Chennai.

Talking to reporters, Muhnot said as per the understanding, SIDBI would provide a line of credit of Rs 100 crore to the city-based bank for a period of seven years. "...it will be given from the risk capital fund managed by SIDBI and the line of credit will be given as growth capital to deserving MSMEs."

The move by SIDBI was to channelise the growth capital to a large number of MSMEs and they decided to partner with select banks. Signing the MoU with Indian Overseas Bank was a first of its kind initiative, he said.

Asked whether SIDBI would have similar tie-ups with other banks, he replied in the affirmative but did not elaborate.

Narendra said they would be offering this service to MSMEs present across the country through their branches.