UK launches pro-poor private investment programme in India with SIDBI
The UK Government's Department for International Development (DFID) has launched its first private sector development programme named 'Samridhi' in India in partnership with the Small Industries Development Bank of India (SIDBI).
- (1888PressRelease) January 05, 2012 - The UK Government's Department for International Development (DFID) has launched its first private sector development programme named 'Samridhi' in India in partnership with the Small Industries Development Bank of India (SIDBI) - the apex Development Bank in the country for promotion, development and financing of Micro Small and Medium Enterprises (MSME). Samridhi, meaning prosperity, aims to promote the pro-poor responsible and sustainable private investment in poorer states in India and to help poor people get access to financial services to improve their income and quality of life.
The programme represents a UK commitment of £65 million (Rs 520 crores) between 2012 and 2019. and will contribute to Indian central and state government priorities of promoting inclusive growth, including through financial inclusion and investment in small and medium enterprises.
Launching the Programme, Mr. Andrew Mitchell, British International Development Minister said, "I believe that entrepreneurs with innovative and creative ideas, who take risks and work hard to produce a product or a service, especially those which can help poorer segments of society, deserve to be encouraged and supported". "Using returnable capital rather than grants, they will be able to start and expand businesses and pay money back so that it can be used to deliver another cycle of benefits. I am proud that DFID is able to provide such support to help start and grow businesses like the ones showcased earlier this evening."
Speaking on the launch of the new project at the British Council, Mr Sushil Muhnot, Chairman, SIDBI, observed that there is a welcome shift towards impact investments by development agencies and Samridhi has the potential to become a model for such investment programmes in future. He mentioned that SIDBI had helped a network of Micro Finance Institutions in the country under National Micro Finance Support Programme earlier supported by DFID, among other institutions, reaching 6.6 million poor clients and the present programme would enable us to replicate the success in identified Samridhi states. He hoped that the programme would go a long way in reducing poverty in the identified states.
Samridhi will extend the reach of financial services in underserved areas of Bihar, Madhya Pradesh, Orissa and Uttar Pradesh. Samridhi will also create an Impact Investment Fund for India's low income states viz. West Bengal, Rajasthan, Jharkhand and Chattisgarh besides above 4 States, to provide patient capital to enterprises that deliver benefits to poor people ( as consumers, producers or employees). This will directly benefit 12 million poor people, of which three-fourth are women, to raise their incomes, set up or grow businesses, save for family needs like their children's education, and cope with unforeseen shocks like a death in the family.
The launch brought together over 200 distinguished representatives from the Government of India, private sector, social enterprises, academia, MFIs, non-governmental organisations and multilateral partners. The launch also showcased private sector initiatives that are delivering development results, for example, Waterlife, D'lite and B-ABLE.
About SIDBI
Small Industries Development Bank of India (SIDBI) is India's apex level financial institution for the promotion, financing and development of MSMEs in the country. Established on April 2, 1990, under the Small Industries Development Bank of India Act, 1989 SIDBI is "the principal financial institution for the promotion, financing and development of industry in the micro, small & medium enterprises sector and to co-ordinate the functions of institutions engaged in similar activities and for matters connected therewith or incidental thereto. Micro, small & medium enterprises contribute significantly to the national economy in terms of production, employment and exports. SIDBI has crossed the milestone of cumulative disbursement of Rs 2 lakh crore as on March 31, 2011 benefiting more than 325 lakh people. During FY 2010-11, SIDBI's outstanding credit to the MSME sector increased by 22% to Rs. 46,331 crore. Its asset portfolio crossed Rs. 50,000 crore as at March 31, 2011. The net profit after tax has increased by 22% to Rs 514 crore from Rs. 421 crore. The Networth of the Bank increased to Rs. 5,979 crore and the Earnings per share (EPS) improved to Rs. 11.42 from Rs 9.36. During the year 2010-11, SIDBI also received international award for MSME Financing & Development Project (MSMEFDP), under Local Economic Development Category, for "Making Market Work for MSMEs" by the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) - with membership of 116 institutions from 42 countries.
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