The Small Industries Development Bank of India (SIDBI) intends to lend Rs 300 crore, USD 61.7 million, to microfinance institutions in Orissa, India, by the end of 2010. To date, SIDBI has disbursed Rs 250 crore, or USD 51.4 million to MFIs in Orissa. The terms of the financing were not disclosed. Currently Rs 100 crore is outstanding to 20 Orissa MFIs. The bank plans to increase this number by 50 new MFIs over the next two years.
In addition to increasing funding and the number of MFIs that receive funding, SIDBI is also planning to open specialized branches that will focus on MFIs in seven locations of the country. Speaking at the Orissa State Policy Conclave Kirpal Singh, general manager of SIDBI supported the need for the expansion by saying that, “MFIs in the country are largely concentrated in the southern states with the eastern region showing trends of growth. The northern and western states as well as the North-Eastern region are underserved as far as MFIs are concerned.”
SIDBI is a state bank that was established in 1990 under the Small Industries Development Bank of India Act of 1989. SIDBI serves as the principal financial institution for the promotion, financing, and development of small scale industry. MicroCapital has covered its partnership with Industrial Credit and Investment Corporation of India (ICICI) as well its investments in SKS Microfinance. At September 30, 2008, total assets stood at Rs 219 billion, approximately USD 4.3 billion. In 1999, SIDBI launched the SIDBI Foundation for Micro Credit (SFMC) in order to channel funds to the poor.
By Iyanna Holmes, Research Assistant
Additional Resources:
Business Standard: SIDBI to Give Rs300cr to MFIs
MicroCapital Story: Small Industries Development Bank of India (SIDBI) Makes over $220,000 Microfinance Equity Investment in SKS Microfinance
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