SIDBI plans regional WTO counselling centres

By Our Special Correspondent

CHENNAI, FEB. 16. The Small Industries Development Bank of India (SIDBI) is thinking of setting up `regional WTO counselling centres' to help small industries understand the implications of the World Trade Organisation (WTO) regime and evolve ways of meeting international competition.

The Chairman and Managing Director of SIDBI, Mr. P. B. Nimbalkar, who disclosed this at a press conference here today, said SIDBI had commenced sectoral studies on food processing, pharmaceuticals, textiles and readymade garments, automobile parts, toys and hand tools in the context of the emerging competition after the total abolition of quantitative restrictions on imports and the reports would be available shortly.

Mr. Nimbalkar said SIDBI proposed to float an offshore venture capital fund of $50 million in partnership with Intec Venture Group (IVG), promoted by a former employee of the World Bank and Mr. N. Vaghul. To be based in Mauritius, the venture fund would extend equity support to India-registered IT companies and would also extend finance for acquisitions. In the first phase, $30 million would be invested in the fund, which would become operational in three months.

The bank had supported two incubation centres at IIT Kanpur and the Birla Institute of Technology, Ranchi, and two more centres would be identified in the southern and northern regions. The bank also proposed to set up a VCF for supporting the biotechnology industry.

Mr. Nimbalkar said 400 loan proposals had so far been received all over the country for coverage under the credit guarantee scheme for small-scale industry, being operated by a trust fund set up by SIDBI. Twelve banks in both the private and public sectors had joined the credit guarantee scheme (under which the fund will extend guarantee to the extent of 75 per cent of loans of upto Rs. 25 lakhs on condition that no collateral would be demanded by the bank and the lending rate did not exceed three per cent above the bank's prime lending rate. Five more banks were in the process of joining.

He said 97 per cent recovery had been recorded under the micro credit scheme of SIDBI having a corpus of Rs. 100 crores, and utilisation of Rs. 60 crores covering three lakh beneficiaries. The scheme, which involved an interest rate of 11 per cent and was operated largely on a commercial basis through voluntary organisations (NGOs), benefited large numbers of women.

SIDBI would announce in the next few days a relief package for industries affected by the Gujarat earthquake. This would include reduction of interest rates, rescheduling of outstanding loans and grant of new loans, Mr. Nimbalkar said.

Under the Tannery Modernisation Fund launched last year, 37 proposals had been cleared involving Rs. 19 crores of project cost, and Central capital grant of Rs. 4 crores.

Mr. Nimbalkar said the bank's plan for assisting SSIs to become corporate entities and get listed on the OTCEI (Over the Counter Exchange of India) had received a setback after the investment limit in the small sector was reduced to Rs. 1 crore from Rs. 3 crores. Other options in this regard would be examined.

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