The Small Industries Development Bank of India (SIDBI) has received a fresh £36 million commitment from UK’s Department for International Development (DFID) to kick off an inclusive growth projects in four states of India. Developmental organistions and microfinance institutions in Bihar,Orissa,Uttar Pradesh and Madhya Pradesh are expected to benefit from this fund.
At the current exchange rate between rupee and pound sterling at approximately Rs 73 for 1 £ ,the financial support from DFID comes to around Rs 265 crore. The fund is expected to be used for developing the skills of rural producers,artisans and will also be used for capacity building of microfinance institutions in North India.
Confirming the development to the media, a senior SIDBI official said that they are interacting with various stakeholders and will prepare a road map for disbursement of funds with inputs from their partners.
While SIDBI has been appointed the implementing agency for the fund, the National Bank for Agriculture & Rural Development (NABARD) and Indian Tobacco Company(ITC) are also expected to take part in the programme. Access Development Services, a non profit private company that offers assistance to facilitate inclusive growth is also expected to benefit from this scheme.
DFID has been assisting SIDBI with financial support in its effort to strengthen Microfinance Institutions in India. The scope of the latest programme is far wider than previous grants given by DFID. The funds would not only support development of MFIs, but can also be used for capacity building of self help groups and joint liability groups in the villages of these four states. SHG’s in India are promoted by various state and central governments in association with nationalized banks .
SIDBI has also set an internal target of investing at least Rs 500 crore in equities and subordinated bonds of microfinance entities for this fiscal year.