Govt approves equity support of ₹5,000 cr to SIDBI

The government on Wednesday, January 21, approved equity support of ₹5,000 crore to Small Industries Development Bank of India (SIDBI), a decision that will increase the flow of credit to Micro, Small & Medium Enterprises.

The decision was taken at the Union Cabinet, chaired by Prime Minister Narendra Modi, an official release said.

The equity capital of ₹5,000 crore will be infused into SIDBI by the Department of Financial Services (DFS) in three tranches.

It will invest ₹3,000 crore in 2025-26 at the book value of ₹568.65 as on March 31, 2025 and ₹1,000 crore each in fiscal 2026-27 and 2027-28 at the book value as on March 31 of the respective previous financial year, the release added.

”This infusion of additional capital would enable SIDBI to generate resources at fair interest rates, thereby increasing the flow of credit to Micro, Small & Medium Enterprises (MSMEs) at competitive cost,” the release said.

”Post equity capital infusion of ₹5,000 crore, the number of MSMEs to be provided financial assistance is expected to increase from 76.26 lakh at the end of financial year 2025 to 102 lakhs (approximately 25.74 lakh new MSME beneficiaries will be added) by the end of financial year 2028,” it added.

The equity infusion is expected to generate 1.12 crore jobs, adding 25.74 lakh new MSME beneficiaries by the end of 2027-28, according to the official release.

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