Boosting MSMEs: Government Infuses Rs 5,000 Crore into SIDBI

The Indian government approves an equity infusion of Rs 5,000 crore into SIDBI to enhance credit flow to MSMEs. The capital will be introduced in three stages, aiding the financial assistance expansion from 76.26 lakhs to 102 lakh MSMEs by 2028, and generating 1.12 crore jobs.

The Indian government has sanctioned an equity support of Rs 5,000 crore for the Small Industries Development Bank of India (SIDBI) to augment the credit flow to Micro, Small & Medium Enterprises (MSMEs). The decision was made at a Union Cabinet meeting chaired by Prime Minister Narendra Modi, according to an official statement.

The Department of Financial Services (DFS) will infuse the capital in three tranches, with Rs 3,000 crore set for 2025-26 based on the book value of Rs 568.65 as of March 31, 2025. Additional investments of Rs 1,000 crore each will follow in fiscal years 2026-27 and 2027-28.

This capital injection aims to allow SIDBI to acquire resources at equitable interest rates, facilitating increased credit availability to MSMEs at competitive costs. The initiative is on track to elevate financial assistance beneficiaries from 76.26 lakh to 102 lakh by 2028, potentially creating 1.12 crore jobs.

(With inputs from agencies.)