SIDBI Is All Set To Provide Credit And Finance For MSMEs Of Bihar

Small Industries Development Bank of India (SIDBI) said it has partnered with the Bihar government for the development of the state's MSME ecosystem. SIDBI, the principal financial institution for MSME development in the country has signed two Memorandum of Understandings with the Industries Department, Government of Bihar and Bihar Industrial Area Development Authority (BIADA). Under the first MoU with the Industry Department, SIDBI said in a statement that it will deploy Project Management Units (PMU) in making necessary interventions for facilitating the development of the MSME ecosystem.

Under the second MoU, SIDBI said it will work with BIADA for benefitting MSMEs who want to set up industrial units on the land or plot allotted by BIADA for the promotion of industrialisation in the state. “The MoU with SIDBI will prove to be a game-changer in the development of Micro, Small and Medium enterprises in Bihar, especially when the land of BIADA will be recognized by SIDBI as collateral for cheap and easy loans to MSMEs. This will greatly accelerate the industrial development of Bihar,” Syed Shahnawaz Hussain, Minister of Industries, Government of Bihar.

Bihar is the 14^th state in the country with which SIDBI has partnered to develop local MSME ecosystems. The bank had already partnered with state governments of Assam, Rajasthan, Haryana, Maharashtra, Delhi, Uttar Pradesh, Uttarakhand, and more to set up PMUs.

PMUs design programmes related to equity support, resolution for stressed units, interest subvention and suggest changes to existing schemes and projects in the respective state, if required, to remove barriers to MSMEs’ growth. “We are working towards strengthening the MSME ecosystem in the State. SIDBI would be placing an expert agency with the State Industries Department of Bihar,” said Manish Sinha, General Manager and SIDBI.

As per the 2020-21 annual report of the MSME Ministry, Bihar had the sixth-highest number of MSMEs in the country. The state had 34.46 lakh MSMEs with a 5 per cent share in the overall 6.33 crore MSME base of India. Uttar Pradesh, West Bengal, Tamil Nadu, Maharashtra, and Karnataka were the top five states.

Last month SIDBI announced sanctioning of Rs 650 crore in financial assistance to two small finance banks AU Small Finance Bank and Jana Small Finance Bank in order to enable credit access to more Covid-hit micro and small enterprises (MSEs) via low rated or unrated small non-banking financial companies (NBFCs) and microfinance institutions (MFIs). SIDBI has extended the assistance from the Special Liquidity Facility of Rs 16,000 crore sanctioned to it by the Reserve Bank of India in June last year to help MSMEs  that were badly impacted by the pandemic.