Date:22/07/2006 URL: http://www.thehindu.com/2006/07/22/stories/2006072214571900.htm

Business

SIDBI plans to expand its infrastructure

Staff Reporter

Looks forward to emerging as a one-stop shop

SIDBI intends to strengthen partnership with select banks
It is focussing on SME cluster-based lending

The institution will have arrangement for joint financing with KFC

KOCHI: The Small Industries Development Bank of India (SIDBI) will open its branch office in Kozhikode soon. The branch office in Kochi is the only one in Kerala now.

With a view to expanding its outreach, the SIDBI will expand its infrastructure, according to K. M. Nair, general manager, who is in-charge of the Kerala operations. He said that during the first quarter of the current financial year, the Kochi branch office had sanctioned Rs.57.91 crores and disbursed Rs.62.12 crores.

The overall growth is mainly attributed to increasing flow of assistance under the Receivable Finance Scheme (RFS) of the SIDBI. The scheme is intended to tide over short-term liquidity of the SSI suppliers of large industries. The bank convened a vendors' meet here on Friday for disseminating information about the scheme.

The SIDBI looks forward to emerge as a one-stop shop for credit and development needs of the SME sector and intends to strengthen partnership with select banks, Mr.Nair said.

The SIDBI is focussing on SME cluster-based lending. As a methodology to strengthen the arrangement with banks for joint business development, joint appraisal will be undertaken. This will result in reducing the transaction cost of dispensing credit to SMEs.

The SIDBI has also decided to have arrangement for joint financing with the KFC. A working committee comprising officials of the SIDBI and the KFC will be constituted for finalising the modalities of joint financing. The objective of this arrangement is to help the KFC to retain good clients and broaden their activity while complimenting the SIDBI in providing timely assistance to SMEs located in different parts of the State.

A Credit Guarantee Fund Trust Scheme (CGTSI) has been launched jointly by the SIDBI and the Government of India with a view to facilitating collateral free loans to SSIs. Small and Medium Enterprises Rating Agency (SMERA) is the new initiative of the SIDBI for providing SME ratings that are comprehensive, transparent and reliable, he said.