New Delhi: The Union Cabinet on Wednesday approved an equity infusion of Rs 5,000 crore into the Small Industries Development Bank of India, a move aimed at expanding credit availability for micro, small and medium enterprises.
The decision was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi, according to an official statement.
The equity support will be provided by the Department of Financial Services in three tranches. An amount of Rs 3,000 crore will be infused in 2025-26 at a book value of Rs 568.65 as on March 31, 2025. This will be followed by two additional tranches of Rs 1,000 crore each in 2026-27 and 2027-28, based on the book value as on March 31 of the respective previous financial years.
“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.
Following the equity infusion, the number of MSMEs receiving financial assistance from SIDBI is expected to rise significantly. The official statement noted that beneficiaries are projected to increase from 76.26 lakh at the end of 2025 to about 102 lakh by the end of 2028, adding nearly 25.74 lakh new MSMEs to the fold.
“Post equity capital infusion of Rs 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 government also estimates that the expanded lending activity enabled by the capital support could lead to the creation of around 1.12 crore jobs by the end of 2027-28.
BI Bureau
