Sidbi, the national development bank, unveiled a growth accelerator program for small NBFCs to assist them in becoming eligible for bank funding. The initiative, carried out in collaboration with the worldwide alliance for mass entrepreneurship and the national NBFC lobby FIDC (Finance Industry Development Council), has onboarded 18 small NBFCs as the program's inaugural cohort.
According to Sidbi chairman and managing director Sivasubramanian Ramann, the five-month course is aimed at scaling small NBFCs (Non-Banking Financial Company) by design interventions, allowing them to apply for institutional finance based on holistic evaluation metrics.
The program includes mentorship from domain experts on risk, operations, governance, and technology and is structured to encourage and facilitate peer learning, reviews, and networking through a blend of in-person, virtual and individualized sessions, Umesh Revankar, FIDC chairman and executive vice-chairman of Shriram Finance, said.
Only 15% of the almost 80 million small businesses have access to formal credit, demonstrating the vast potential market for MSME (Micro, Small, and Medium Enterprise) funding, according to Ramann.
Furthermore, he stated that Sidbi's lending to MSMEs has doubled in the last three years to cross the Rs 50,000 crore barrier, while the system-wide MSME loan book is Rs 25 lakh crore, expected to double in the next three years. Only 28% of the current MSME book is met by NBFCs.
The program's goal is to create a repeatable model that will allow MSME-focused NBFCs to become eligible for formal finance and future-ready, according to Ravi Venkatesan, founder of the Global Alliance for Mass Entrepreneurship.