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SIDBI Micro-finance Schemes

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Harmeet
New Update

BANGALORE, INDIA:SIDBI offers a lot of support to MFIs. Here asre some of the key offerings:

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On-lending

In keeping with its mission, SIDBI Foundation identifies, nurtures and develops select potential MFIs as long term partners and provides credit support for their micro credit initiatives. The eligible partner institutions of SIDBI Foundation, therefore, comprise large and medium scale MFIs having minimum fund requirement of Rs. 10 lakh per annum. Large and medium scale MFIs having considerable experience in managing micro credit programmes, high growth potential, good track record, professional expertise and committed to viability are provided financial assistance for on-lending.

Capacity Building

To scale up micro-finance initiatives at a faster pace, a special effort is required for capacity building of the Micro Finance Institutions. In this background, SFMC has in the past under the DFID collaboration (which has since come to an end on March 31,2009) provided need based capacity building support to the partner MFIs, in the initial years, to enable them to expand their operations, cover their managerial, administrative and operational costs besides helping them achieve self-sufficiency in due course.

Liquidity Management

In view of the fact that liquidity is a major concern of many of the middle level MFIs and a small working capital support can go a long way in their better liquidity management and thus pave way for faster growth, SFMC has introduced a special short term loan scheme, Liquidity Management Support (LMS) for the long term partners.

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Equity

Provision of equity capital to the NBFC-MFIs is perceived as an emerging requirement of the micro finance sector in India. SIDBI provides equity capital to eligible institutions not only to enable them to meet the capital adequacy requirements but also to help them leverage debt funds.

Transformation Loan

The Transformation Loan (TL) product is envisaged as a quasi-equity type support to partner MFIs that are in the process of transforming themselves / their existing structure into a more formal and regulated set-up for exclusively handling micro finance operations in a focused manner. Being quasi-equity in nature, TL helps the MFIs not only in enhancing their equity base but also in leveraging loan funds and expanding their micro credit operations on a sustainable basis.

Micro Enterprise Loans

In order to build and strengthen new set of intermediaries for Micro Enterprise Loans, the Bank has formulated new scheme for Micro Enterprise Loans. Institutions/ MFIs with minimum fund requirement of Rs. 25 lakh p.a. and having considerable experience in financial intermediation/ facilitating or setting up of enterprises/ providing escort services to SSI/ tiny units/ networking or active interface with SSIs etc. and having professional expertise and capability to handle on-lending transactions shall be eligible under the dispensation.

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Micro Enterprise Loans Scheme - Direct Credit

The Micro Enterprise Loan Scheme - Direct Credit provides need based composite loan (ranging from Rs. 50,000 to Rs. 5 lakh ) to Micro Enterprises directly for acquiring capital assets and also for their working capital / marketing related requirements. The assistance is covered under the CGTMSE scheme. The scheme is currently operated by the 7 specialised Micro Finance Branches.

Loan Syndication

Keeping in view the increased fund requirement of major partner MFIs, the Bank has also undertaken fee based syndication arrangement where loan requirement is comparatively higher.

Source: www.sidbi.com

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