Mumbai, November 05: The Small Industries Development Bank of India (SIDBI) believes that the RBI's special refinance grant of Rs.5,000 crore will help cumulatively garner more than Rs.20,000 crore to the fund-started micro, small and medium enterprises (MSME) in the country.
SIDBI Deputy Managing Director N.K. Maini was quoted in the Economic Times (Read Full Story) as saying that the facility if fully utilized over four cycles of 90 days each could offer cumulative assistance of up to Rs.20,000 crore and result in addresing the problem of liquidity and delayed receivables faced by the MSMEs.
It may be recalled that the Reserve Bank had announced its decision to extend a Rs.5000 crore liquidity support to SIDBI for a period of one year." The central bank had notified that in view of the need to ease the cash flow related problems to micro and small and medium enterprises in view of the fact that their being employment-intensive and contributing to exports, the decision to refinance worth Rs.5000 crore to SIDBI was taken.
The refinance would be used to directly support liquidity requirements as well as financing receivables including for exports to the enterprises through select intermediaries like public sector banks, the statement had said.
On its part, a SIDBI statement said its board considered the introduction of the Special Refinance Facility and has come out with a plan to extend assistance to the small and medium enterprises for supply of goods and services to larger companies against bills and invoices besides assuring need-based liquidity support in terms of working capital.