SIDBI sanctions ₹650cr financial assistance to AU and Jana SFB

Small Industries Development Bank of India (SIDBI), the principal financial institution engaged in the promotion, financing and development of Micro, Small and Medium Enterprises (MSMEs), has sanctioned financial support of ₹650 crore to two small finance banks (SFBs), AU Small Finance Bank and Jana Small Finance Bank.

SIDBI, in a release on Tuesday, said it has sanctioned the financial support to the two small finance banks to connect, through the SFBs, to small estimated Non-Banking Financial Companies(NBFCs)/Micro Finance Institutions (MFIs), who in turn provide financial support to the small businesses and micro entrepreneurs.

“The role of the relatively smaller NBFCs and MFIs, which usually operate remote geographies (including credit deficient, backward and optimistic districts), in the socio-economic development of the nation is well established. They normally cater the informal MSME sector, particularly new to credit organizations, small retail trade, micro credit and other small family organizations and so on in the hinterland because of their unique advantage of next door presence and accumulated knowledge about their customers over a period of time (as compared with banks and bigger NBFCs),” it said in a release.