SIDBI Expands Direct Financing In Assam To Boost Startup Ecosystem

Guwahati: Small Industries Development Bank of India SIDBI has been instrumental in promoting industrial growth in Assam and Northeast India. Although it started with modest financing activities, the bank has recently expanded its direct financing activities significantly. As part of its latest initiatives, SIDBI is actively supporting startups, enhancing credit accessibility, and driving infrastructure development across Assam.

In an exclusive interview with Business North East (BNE), SIDBI Deputy General Manager Pradeep Kumar Nath spoke on the bank's recent efforts towards enhancing the entrepreneurial base in Assam.

"The efforts of the bank lie in making the credit facility easily accessible, contributing to infrastructure expansion, and catalyzing innovations in the MSME sector," said Nath.

He revealed that the Assam Government, in collaboration with SIDBI, has established the Assam Startup Venture Capital Fund to strengthen the state's startup ecosystem. The fund totals Rs. 200 crore, with an additional greenshoe option of Rs. 200 crore. The Government of Assam has invested Rs. 100 crore, while the SIDBI Fund of Funds serves as the secondary investment partner.

Compared to August 2022, as a Category I AIF (Alternate Investment Fund) under SEBI, the fund has the main idea of investing in scalable business endeavours, new and innovative business approaches, and young startups, primarily in the sector of MSME.

SIDBI manages the Credit Guarantee Fund on behalf of its subsidiary CGTMSE, wherein micro and small businesses are extended credit without demanding collateral. Under the Assam Credit Guarantee Fund, the Government of Assam has contributed Rs. 100 crore to complement CGTMSE’s 75 per cent guarantee, providing a 100 per cent credit guarantee to entrepreneurs in Assam.

Moreover, SIDBI and the Assam government have set up a Rs. 200 crore fund to support entrepreneurs who lack margin money to avail loans. This initiative is expected to encourage commercial banks to lend more freely to MSMEs and startups.

Sensing the fact that infrastructure is the big bottleneck to industry expansion, SIDBI has made serious attempts to finance Assam's infrastructural growth. The Assam government has approached projects aggregating Rs. 1,200 crore to finance under SCDF, including infrastructure development such as roads, waterways, industrial estates, etc.

"With enhanced infrastructure, we are confident that we can get more investments and spur the development of MSMEs," said Pradeep Kumar Nath, who also added, "Our low-cost, long-term loans to the state government will be a key factor in developing an industrial ecosystem that will ensure sustainable development."

One of SIDBI’s latest interventions is the Swavalamban Connect initiative, designed to assist young entrepreneurs lacking access to reliable business guidance. SIDBI plans to establish district-level offices, where designated officers would provide free hand-holding support to new entrepreneurs.

These centres will guide aspiring business owners on proposal preparation, training opportunities, financing options, and market entry strategies. “Many young entrepreneurs want to start a business but lack the right information,” said Nath, adding, "Swavalamban Connect will act as a one-stop resource to help them navigate the complexities of setting up and running a business."

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SIDBI is also focussing on promoting traditional industries and tourism in Assam. A three-year Cluster Intervention Program has been launched in collaboration with KPMG to develop the state’s tourism industry. This initiative includes training programs for homestay owners and taxi operators to improve service standards and ensure a better tourist experience. Exposure visits are also being organized for homestay owners to locations like Rajasthan and Nainital to learn best practices in hospitality.

Apart from this, SIDBI has established a branch office at Hajo to aid artisans in the dyeing, bell metal, and brass industries. The bank is also conducting financial literacy training and online marketing courses for local artisans, impacting 200 individuals.

For the Prayaas scheme, SIDBI is working in association with microfinance institutions (MFIs) to extend financial support to small business entrepreneurs. The MFIs work as intermediaries, accessing borrowers and processing loan applications, whereas SIDBI extends the funding.

With these developmental and financial interventions, SIDBI is empowering Assam's entrepreneurial eco-system, widening access to credit and providing MSMEs and start-ups with the impetus for success in an enabling business climate.