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The Small Industries Development Bank of India (Sidbi) on Friday said that it will extend Rs 100 crore line of credit to Indian Overseas Bank for the MSME sector.
The facility, which is for seven years, is aimed at helping small businesses with growth capital and equity, a Sidbi statement said, adding the tie-up is part of its efforts to channelise resources to small businesses.
Recent studies pointed out that MSMEs (micro, small and medium scale units) find it difficult to access equity and quasi-equity finance and hence Sidbi has decided to use money from its risk capital fund and tie—up with lenders to improve its reach, it said, adding this tie—up is the first such tie—up under the initiative, it added.
The money will be provided to deserving MSMEs for bridging the gap in project funding, working capital margin and for meeting intangible expenses through an array of instruments like subordinate debt, redeemable preference shares and equity, it said.
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