SIDBI Launches Growth Accelerator Programme To Help Small NBFCs Attain Funding

The programme is being conducted in association with the global alliance for mass entrepreneurship and national NBFC lobby, the Finance Industry Development Council (FIDC).

The Small Industries Development Bank of India (SIDBI) on Monday revealed a growth accelerator programme for small NBFCs to facilitate them attain eligibility for bank funding. According to the initiative, the bank has onboarded 18 small NBFCs (Non Banking Financial Company) as the first cohort in the programme. 

The programme is being conducted in association with the global alliance for mass entrepreneurship and national NBFC lobby, the Finance Industry Development Council (FIDC), reported PTI. The programme has a duration of five months. SIDBI chairman and managing director, Sivasubramanian Ramann, added that this initiative has been designed to help small NBFCs via design interventions, making them eligible for institutional funding on the basis of holistic evaluation criteria. 

FIDC chairman, Umesh Revankar, further said that the programme includes guidance from domain experts on risk, governance, operations, and technology. He stated that the initiative has been made to enhance and boost peer learning, reviews, and networking through a mix of in-person, virtual, and individual sessions. 

Ramann noted that out of the almost 80 million small businesses, about 15 per cent get access to formal credit, which indicates the presence of a large market for MSME funding. He added that in the last three years, SIDBI's lending to MSMEs almost doubled to surpass the Rs 50,000 crore mark, whereas the overall MSME loan book stands at Rs 25 lakh crore, which is further expected to double over the next three years. 

In the present MSME figures, about 28 per cent of the funding needs have been fulfilled by NBFCs. The programme has been developed with an aim to design a replicable model to allow MSME-focused NBFCs to attain eligibility for formal funding, founder of the global alliance for mass entrepreneurship, Ravi Venkatesan, noted. 

Elaborating on the figures SIDBI intends to lend to NBFCs under the programme, Ramann noted that no target or limit has been set. “All depends on how many of them clear the programme. The programme will enhance the fund flow for the MSME sector by enabling NBFCs to get institutional funding. In this cohort, the participating 18 NBFCs will benefit significantly from specific advice, informal interactions with peers, structured reviews, and evaluation. We have built in the process to ensure that participants demonstrate action to be eligible for continuing to the next stage and mentors endorse and support them ensuring accountability,” he added. He further noted that the target is to make 100 NBFCs future-ready over the next three years.