News

AU Small Finance Bank and SIDBI ink pact to pump MSMEs funding

Views: 470

In a bid to boost funding for Micro- Small and Medium Enterprises (MSMEs), AU Small Finance Bank has inked a Memorandum of Understanding (MOU) with Small Industries Development Bank of India (SIDBI).

Both the financial entities have decided to work jointly under the ‘AU SIDBI Joint Financing Programme’, for projects pertaining to MSMEs in manufacturing and service sectors. They have decided to adopt a common approach to ensure project identification, appraisal, monitoring, follow-up and client servicing.

AU Small Finance Bank will be playing the part of an anchor in this programme and would initiate the smooth flowing of disbursement, monitoring and recovery. This programme would be acting as a stimulus to to the purpose of financial inclusion in India.

This initiative will be funding a term loan proposals worth 25 Lakh to 2 crore. Any further appraisal of the proposal will be jointly handled by AU Bank and SIDBI. Both the financial institutes would earmark a corpus of Rs 100 crore for lending under this MOU for FY18.

The three year-long agreement will ensure timely and sufficient credit availability to Medium Scale Enterprise (MSEs) units.

 “Our cordial relationship with SIDBI started in 2010, when they provided credit facility of Rs. 10 Cr for the promotion and development of MSME sector units in rural and semi urban areas, which has now reached Rs.1000 crores and will strengthen further in the times to come,” said Sanjay Agrawal, MD and CEO, AU Small finance Bank.

“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,” he added.

 “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,” said Mohammad Mustafa (IAS), Chairman and Managing Director, SIDBI.

Analysing the performance of AU Bank in terms of rural and semi-urban markets and considering its successful track record in MSME credit, SIDBI believes AU Bank as one of the leading contenders for MSE Financing. Prior to receiving the license from the Reserve Bank of India for operating a small finance bank, as Au Financier (an NBFC), the company gained over 20 years’ experience of financing the unbanked and underbanked population.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest News

To Top