Small Industries Development Bank of India (SIDBI) announced on Thursday that it has forged a collaboration with Google India Pvt Ltd (GIPL) to pilot a social impact lending initiative for MSMEs, with financial support of up to Rs 1 crore at a subsidized interest rate.
The pilot program focuses on assisting Indian micro-enterprises in making investments in their business operations, which include purchasing new machinery and equipment, production infrastructure, and working capital needs, with a focus on women-owned businesses and those participating in the production of pandemic-fighting equipment.
SIDBI said in a statement that the partnership with Google India brings a corpus of $15 million (~ Rs 110 crore) to micro-enterprises as a crisis response connected to Covid-19 to revive them. SIDBI, an All India Financial Institution (AIFI) committed to the promotion, financing, and growth of Micro, Small, and Medium Enterprises (MSMEs), will launch a loan program geared at micro-enterprises (with a revenue of up to Rs 5 crore), with loan levels ranging from Rs 25 lakh (~$33,728) to Rs 1 crore (~$135,000).
In a statement, SIDBI Chairman and Managing Director Sivasubramanian Ramann said, “We look to this collaboration to enhance our efforts in expanding the sector’s access to credit and are very eager to see the constructive impact that we can achieve together.” Adding further he said, SIDBI is also introducing a paperless experience for its customers from onboarding to loan disbursement.
Sanjay Gupta, the Vice President and Country Manager of Google India also commented on the development saying, “In joining hands with SIDBI, which has a deep understanding of the growing needs of this large and dispersed ecosystem, we are pleased to expand our support to these enterprises.”
Google, which announced last year that it will invest $10 billion in India during the next five to seven years, is the latest tech firm to propose contributing to the disbursement of loans to businesses in India.
Social networking platform Facebook, in August of this year, introduced a similar program to assist small and medium-sized businesses in the Indian markets to secure loans. Facebook has signed partnerships with lending institutions to provide small-ticket loans ranging from Rs 500,000 (~$6,720) to Rs 50,00,000 (~$67,200) at a fixed interest rate of 17 percent -20 percent per annum.
Small Industries Development Bank of India (SIDBI) has had a positive impact on the lives of citizens from all walks of life since its inception in 1990, thanks to its integrated, innovative, and inclusive approach. SIDBI has had a direct or indirect influence on the lifestyle of Micro and Small Enterprises (MSEs) through various credit and developmental initiatives, ranging from conventional, domestic small entrepreneurs to bottom-of-the-pyramid entrepreneurs to deep expertise-based businesspeople. SIDBI 2.0 is dedicated to creating inclusive, innovative, and impactful engagements.