AU Small Finance Bank, SIDBI come together to boost MSME financing

AU Small Finance Bank, one of the fast growing banks in India, signed a Memorandum of Understanding (MOU) with Small Industries Development Bank of India (SIDBI) on October 28 in Jaipur. This partnership seeks to provide an impetus to funding MSMEs. Both financial institutions share the objective of 'AU SIDBI Joint Financing Programme', wherein they will work together in the areas of joint financing of projects relating to MSMEs in manufacturing and service sectors. They will share a mutual approach towards project identification, appraisal, monitoring, follow-up and client servicing.

This programme is expected to boost financial inclusion in India as MSME will be their primary focus. The programme will fund term loan proposals worth Rs 25 Lakh to 2 crore, as per the appraisal of a proposal by both SIDBI and AU. Both institutions will also begin a corpus of Rs 100 crore for lending under this MOU for FY18.

The three year-long agreement will emphasise timely and adequate credit availability to MSEs units and attempt to augment credit flow to MSE.

Sanjay Agrawal, MD and CEO of AU Small finance Bank said, "Our cordial relationship with SIDBI started in 2010, when they provided credit facility of Rs 10 crore for the promotion and development of MSME sector units in rural and semi urban areas, which has now reached Rs 1000 crore and will strengthen further in the times to come. SIDBI has always been one of our prime lender and partner in extending credit to the MSME Sector in the unserved areas towards financial inclusion.Our success today in MSME portfolio is largely due to this partnership. We look forward to the same support even for our banking platform. This joint financing programme with SIDBI shall be a crucial step and milestone in the direction to build values for our customers."

Speaking on the occasion, Shri Mohammad Mustafa (IAS), Chairman and Managing Director, SIDBI said, "The MoU with SFBs is a continuum of series of SIDBI's effort in addressing the gaps in the MSME ecosystem. This initiative will act as a catalyst to improve financial inclusion of hitherto under-served sectors of the nation. On successful operationalisation, this could be a milestone in the MSME financing in the country."

Request a callback
7 + 8?