Firm for asset reconstruction
Guarantee for up to 80 per cent of loans for women entrepreneurs
TIRUCHI: The Small Industries Development Bank of India (SIDBI), along with the National Stock Exchange and Infrastructure Leasing and Financial Services Limited (IL&FS), has sought permission from the Securities and Exchange Board of India to set up an exclusive stock exchange for micro, small and medium enterprises (MSMEs).
The SIDBI and IL&FS would be the joint promoters of the stock exchange, which aims to help the MSME sector to raise funds. “We are awaiting the response of SEBI,” R.M. Malla, Chairman and Managing Director, SIDBI, said in an informal chat with reporters on the sidelines of the inauguration of the bank’s first branch in Tiruchi on Saturday.
SIDBI has also decided to promote an asset reconstruction company for handling the non-performing assets of borrowers from small and medium industries.
“We have applied for licence from the Reserve Bank of India. The company would be set up with a capital of Rs.100 crore. Several banks have already approached SIDBI for partnering the initiative,” he said.
Mr. Malla said the ceiling on credits for industries availing themselves of the Credit Guarantee Fund, created jointly with the Union government and SIDBI, has been increased to Rs.50 lakh from Rs.25 lakh. Commercial banks should come forward to utilise the fund, which has a pool of Rs.1,600 crore, without insisting on collaterals from borrowers from the MSME sector.
Women entrepreneurs and entrepreneurs from the northeast could avail guarantee for up to 80 per cent of their loans. Credit guarantee has been extended to 97,000 loans to the tune of Rs.2,500 crore under the fund so far. It would soon be extended to State financial corporations.