Prime Minister Narendra Modi’s Union Cabinet authorised a Rs 5,000 crore equity support for the Small Industries Development Bank of India (SIDBI) on January 21.
Three tranches of this capital will be infused: Rs 3,000 crore in FY 2025–2026 and Rs 1,000 crore in each of FY 2026–2027 and FY 2027–2028. By FY 2028, this investment is anticipated to create an estimated 1.12 crore jobs and raise the number of MSMEs receiving financial support from 76.26 lakh to 102 lakh.
To maintain a healthy Capital to Risk-weighted Assets Ratio (CRAR), the capital infusion is necessary due to anticipated growth in risk-weighted assets from digital credit products and venture debt.
The goal of the phased capital infusion is to maintain SIDBI’s CRAR above required levels, guaranteeing MSMEs competitive loan rates and favourable credit ratings.
