19 November 2014
Seite 1

The MSME sector crucial to achieve inclusive growth
• 9% contribution to GDP
•
45% contribution to manufacturing
•
40% contribution to exports
•
Second largest provider of employment
YET
Less than 10% of the sector accesses finance from institutional sources
• Lack of timely, adequate and economical credit
•
Lack of funds for growth and expansion, modernisation etc.
•
Lack of collateral to avail bank financing
•
Lack of access to different sources of finance viz. risk capital
Seite 2

• Increase banking access to number of units – cheaper loans, simpler processes, smaller ticket sizes, alternative to collateral based funding
• Improve financing for different requirements – sustainability investments
(Energy efficiency etc.), loans for expansion, marketing activities etc
• Increased availability of different sources of finance
• Improve awareness amongst MSMEs about existing schemes and benefits
– Low awareness on existing schemes and benefits
Seite 3

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
•
100% federally owned, public-benefit enterprise , supporting the
German Government in achieving its objectives in the field of international cooperation for sustainable development
• promoting international cooperation for sustainable development and international education work .
•
> In 130 countries worldwide; > 17,000 staff members
 Promoting MSME Growth = a priority area of GIZ Private Sector
Development
Energy Environment
Sustainable Economic
Development
Seite 4

MSME Umbrella Program – aimed to modernise the
MSME sector and improve their competitiveness
• Improving the implementation of policies and programmes of the
Ministry of MSME
• Better access to market oriented financial and non-financial services
• Promoting innovation
Responsible Enterprise Finance
(with SIDBI as partner) REF constituted to improve supply of risk capital and sustainabilityoriented loan products for MSMEs
• ESG framework for SME
Lending
• Sustainability oriented financial products and services
• Improved supply of risk capital for social enterprises
• Guidelines for responsible
Financing
Seite 5

• Workshops aimed to increase awareness about existing schemes for
MSMEs and get better understanding of bankers’ expectations in loan applications
• Focus on micro and small enterprises
• 50 workshops across the country spanning different sectors
• Workshops attended by multiple stakeholders – banks, NBFCs,
MSMEs, business associations
Over 300 additional workshops have been conducted outside the program on banks request and funding by banks
Seite 6

• Objective was to improve access to finance for micro enterprises
• Typical loan requirement between INR 50,000 to INR 10, 00,000
• Focus on training of Regional Rural Banks/ Urban Cooperative
Banks/ District cooperative banks especially for downscaling techniques for MEL
• Way forward
• Training programs underway with partner banks
• SIDBI implementing 100 training workshops in different MSME clusters for RRBs/UCBs and DCBs
• Line of Credit committed from KfW to SIDBI for missing middle financing
(anchored in SIDBI foundation for micro credit)
Seite 7

Aim to improve supply of loans for sustainability oriented investments
Some of the activities include:
• Energy Efficiency Financing
• Loans for Energy efficiency measures
• Training for bankers to understand EE and evaluate projects (50 workshops completed)
• Pilots underway to test financial products for EE loans
• Supporting SIDBI in their end to end energy efficiency (4E) project
• Loans for women entrepreneurs
• Loans for renewable energy
Seite 8

• Ensuring increased supply of risk capital to social enterprises and start ups
• Increasing market transparency to facilitate flow of capital to social enterprises
• Strengthening incubation support for social enterprises and start ups
• Strengthening supply of risk capital for social enterprises and start ups
• Developing a pipeline of strong social enterprises to receive financing from SIDBI Venture Capital
Seite 9

• Your engagement with GIZ on the Responsible Enterprise Finance
Program
• REF program taken forward through multi-stakeholder working groups
• Is there anything else that you would like us to include under
Sustainability?
• Important to get your views on what works
Seite 10

GIZ – REF Team
Wolfgang Leidig
( wolfgang.leidig@giz.de
)
Poonam Sandhu
(poonam.sandhu@giz.de)
Anja Shivhare
(anja.shivhare1@giz.de)
Devyani Hari
( devyani.hari@giz.de
)
Katharina Kuehn
(katharina.kuehn@giz.de)
Neha Kumar
( neha.kumar@giz.de
)
SIDBI PMD Team
AK Kapur
( akapur@sidbi.in
)
Anand P Srivastava
(anandp@sidbi.in)
Seite 11