ADB to provide $300 million to help develop Indian MSMEs

MUMBAI: The Asian Development Bank (ADB) will lend $ 300-million to help India develop its micro, small and medium enterprises, the bank said in a release here.

"The ADB Board of Directors today approved a sovereign loan of $ 50-million and a partial credit guarantee of up to $ 250-million for the micro, small and medium enterprise ( MSME) development project," the release said.

The $ 50-million loan will go to the state-owned Small Industries Development Bank of India (SIDBI) to fund enterprises that have become too large to tap traditional micro finance.

The program also supports the Union Government's efforts to build up the sector to boost inclusive growth.

Around 30,000 MSMEs are expected to benefit from the project.

"The objective of the project is to remove bottlenecks to MSME financing and development, thus helping pave the way for growth, competitiveness and employment creation," Senior Investment Specialist in ADB's South Asia Department, Peter Marro, said.

SIDBI will be the borrower and executing agency for the loan, which will be implemented over five-years. The PCG facility will be available for three years following approval from ADB's Board of Directors, it said.

Currently, MSMEs provide livelihood for an estimated 65-million people.