The Small Industries Development Bank of India (SIDBI) Monday said it would be first finance company to raise funds through external commercial borrowing (ECB) after the government comes out with the necessary guidelines.
SIDBI finances the Micro, Small and Medium Enterprise (MSME) sector.
The government has recently relaxed ECB norms to allow easier access to cheap dollar funds to housing finance companies such as HDFC, SIDBI and permitted non-resident entities to provide rating enhancement facility to Indians.
The conditions will be finalised in consultation with the Reserve Bank of India (RBI).
“When the permissions come we will be the first to avail the benefit,” SIDBI General Manager K.I. Mani said.
This will help the SIDBI boost its capital flows through raising dollar funds.
“We are waiting for the actual terms and conditions,” Mani said.
The bank has projected a 17 percent growth in the MSME lending to over Rs.62,000 crore during the current fiscal. Its outstanding credit to the sector stood at Rs.53,785 crore for the last fiscal.
“We are focused more on addressing the financial and non-financial gaps in order to facilitate higher credit flow to the MSME sector. We are looking to redefine our role and moving towards a new business model,” Mani added.