SIDBI partners with RRBs to expand MSME loans in rural India: CMD Manoj Mittal
New Delhi, May 25
Small Industries Development Bank of India is working on a co-lending model with Regional Rural Banks to expand affordable MSME credit access across rural India, SIDBI Chairman and Managing Director Manoj Mittal said during the institution's 37th Foundation Day celebrations.
Addressing the event, Mittal said the initiative was conceptualised following directions from Finance Minister Nirmala Sitharaman during a review meeting of RRBs.
"SIDBI was tasked with creating a risk sharing mechanism with the RRBs. The whole project required convincing RRBs, regulatory approvals, creating loan policies for each RRB, and a friendly technology platform," Mittal said.
He added that SIDBI has already conducted a pilot with branches of three RRBs and the initial response has been encouraging.
"We have done a pilot with a few branches of three RRBs, and the results have been quite encouraging. With 23 branches of RRBs, we intend to extend affordable MSME credit at a scale to every corner of Bharat," he said.
Mittal said the initiative combines SIDBI's MSME financing expertise and digital capabilities with the grassroots reach of RRBs to strengthen last-mile credit delivery in rural and semi-urban areas.
Speaking about SIDBI's expansion, Mittal said the institution has increased its branch network significantly after the government encouraged it to scale operations in MSME clusters.
"Now, very happy to announce that we have reached 166 branches as of March 2026, from 96 in March 2024," he said.
According to Mittal, SIDBI is currently covering around 196 MSME clusters and the expanded branch network has generated additional direct finance business of around Rs 4,000 crore.
"These branches have given us additional direct finance business of about Rs 4,000 crores. Some of these branches are able to reach the breakeven point in less than 12 months," he said.
Mittal also said SIDBI plans to expand its partnerships with industry associations from 105 currently to 500 over the next two years as part of its developmental initiatives for the MSME sector.
— ANI
Reader Comments
Good initiative, but I've seen such schemes fail on the ground because the loan process becomes too bureaucratic. SIDBI and RRBs need to make sure the application process is digital and simple—maybe even in local languages. The pilot with 3 RRBs is small, but if it works well for 23 branches, it could really transform credit flow in Bharat. Hope the risk sharing mechanism is fair to RRBs, otherwise they'll be hesitant to lend.
The plan to expand industry associations from 105 to 500 is really ambitious! This could help small businesses get training and market linkages, not just loans. But I hope SIDBI also focuses on reducing the collateral requirements—MSMEs in villages often don't have property to pledge. The Rs 4,000 crore additional business sounds good, but let's see how much actually reaches the grassroots level. Still, it's a positive step in the right direction! 🙌
This is a great idea, but I'm a bit skeptical about the digital platform. In rural areas, internet connectivity is still patchy and many small business owners are not very tech-savvy. SIDBI needs to also run training programs alongside this initiative. The fact that some branches hit breakeven in