- The Small Industries Development Bank of India (SIDBI) is working with Regional Rural Banks (RRBs) to expand affordable credit access for Micro, Small and Medium Enterprises (MSMEs) across rural India.
- SIDBI Chairman and Managing Director Manoj Mittal announced the initiative during SIDBI’s 37th Foundation Day celebrations.
Objective: Strengthening Last-Mile MSME Financing
According to Manoj Mittal, the new co-lending model aims to combine:
- SIDBI’s expertise in MSME financing and digital lending
- The deep rural reach and local presence of RRBs
The initiative is expected to improve last-mile credit delivery in rural and semi-urban areas and help small businesses gain easier access to formal finance.
Initiative Launched After Finance Ministry Direction
Mittal said the project was conceptualised following directions from Finance Minister Nirmala Sitharaman during a review meeting of Regional Rural Banks.
He stated that SIDBI was tasked with creating:
- A risk-sharing mechanism with RRBs
- Loan policies for participating banks
- A technology-enabled lending platform
The process also involved obtaining regulatory approvals and onboarding RRBs into the framework.
Pilot Project Shows Encouraging Results
- SIDBI has already conducted a pilot programme with branches of three Regional Rural Banks.
- Mittal said the pilot delivered encouraging outcomes, and the institution now plans to scale the initiative through a wider RRB network to provide affordable MSME loans across the country.
SIDBI Expands Branch Network and MSME Reach
The SIDBI chief also highlighted the institution’s rapid expansion in recent years.
- SIDBI’s branch network increased from 96 branches in March 2024 to 166 branches by March 2026
- The institution is currently covering around 196 MSME clusters
According to Mittal, the expanded network has generated nearly ₹4,000 crore in additional direct finance business.
He added that several new branches achieved operational breakeven within 12 months.
Focus on Industry Partnerships
SIDBI also plans to strengthen its engagement with industry bodies and associations.
The institution aims to increase its partnerships:
- From 105 associations currently
- To around 500 associations over the next two years
The move is part of SIDBI’s broader strategy to support MSME development, entrepreneurship, and financial inclusion across India.