The SIDBI RRB MSME Co-Lending arrangement is set for expansion as the government looks to improve credit access for micro and small businesses in rural and semi-urban areas.
The Small Industries Development Bank of India (SIDBI) organised a conclave of the Heads of Regional Rural Banks (RRBs) in New Delhi. The meeting focused on expanding the co-lending arrangement and strengthening MSME financing.
The conclave was chaired by Shri Sanjay Lohiya, Secretary, Department of Financial Services (DFS). Shri Manoj Mittal, CMD, SIDBI, senior officials from DFS, SIDBI and NABARD, and Chairmen of all 28 RRBs attended the meeting.
SIDBI RRB MSME Co-Lending to Expand Rural Credit
Secretary, DFS, highlighted the need to scale up MSME lending across rural and semi-urban markets.
The proposed arrangement combines the strengths of SIDBI and RRBs.
SIDBI brings expertise in understanding MSME credit requirements. RRBs provide extensive reach across smaller towns and villages.
The model can help RRBs diversify their loan portfolios by increasing their focus on MSME lending.
Rule engine-based underwriting is also expected to support faster credit decisions while helping maintain asset quality.
MSME Cluster Data to Support Targeted Lending
Additional Secretary, DFS, highlighted the importance of MSME cluster data.
Better use of cluster-level information can help RRBs identify and reach more MSMEs with suitable financial products.
The officials also called on RRBs to support India’s next-generation manufacturing ecosystem.
RRBs were encouraged to participate actively in Rozgar Melas organised by state governments. These platforms can also help improve financial awareness among MSMEs.
Joint Secretary, DFS, suggested that MSME lending through the co-lending arrangement should become an important target for RRB branches.
CMD, SIDBI, also urged RRBs to actively support the expansion of the programme.
Digital Platform Enables Faster MSME Loans
SIDBI has developed a Co-Lending Origination Platform to simplify the MSME credit process.
The platform provides an end-to-end digital and paperless loan journey.
Applicants can receive in-principle sanction decisions within a short turnaround time after submitting the required information through the application portal.
Digital documentation and disbursement further reduce the need for branch visits.
Once approved, loan amounts are transferred directly to the borrower’s bank account.
SIDBI RRB MSME Co-Lending to Reach More RRBs
The platform has already recorded encouraging results during its pilot implementation across three RRBs.
SIDBI now plans to expand the co-lending programme to more RRBs.
The wider rollout is expected to improve access to formal credit for MSMEs, particularly micro and small businesses operating in rural and semi-urban markets.
The initiative also aims to combine SIDBI’s MSME lending expertise with the strong local presence of RRBs.
This approach can help bring more rural businesses into the formal credit ecosystem and support the growth of India’s next-generation manufacturing base.
Source: PIB
