Cabinet approves Rs 5,000cr equity infusion for Sidbi

NEW DELHI In a bid to improve credit flow to small businesses, the Union cabinet on Wednesday approved equity support of Rs 5,000 crore to Small Industries Development Bank of India (Sidbi), with the money to flow in three tranches.Govt will pump in Rs 3,000 crore in 2025-26 at the book value of Rs 568.7 as on March 31, 2025 and Rs 1,000 crore each in 2026-27 and 2027-28 at the book value as on March 31 of the respective previous financial year, an official statement said after the Union cabinet approved the plan."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.

The equity infusion is expected to generate 1.1 crore jobs, adding 25.7 lakh new MSME beneficiaries by the end of 2027-28, it added."The equity support will be leveraged by the bank to scale its business further through expansion of its branch network, introduction of more innovative digital products for working capital, invoice discounting, specialised products for defence sector, machinery loans, etc., Sidbi shall also scale up its efforts," Sidbi said.