Sidbi sets up Rs 10,000 crore fund, plans rating agency

Small Industries Development Bank of India (Sidbi) has set up a Rs 10,000 crore fund for the small-scale industries (SSI) sector and is in talks with World Bank for a $200 million loan to increase fund flow to the sector.

"The bank is also planning to increase the size of its venture capital fund, named Growth Fund, to Rs 500 crore from the current Rs 100 crore," said VK Chopra, chairman of Sidbi, on the sidelines of a PHDCCI seminar here today.

"Sidbi is also planning to set up a credit rating agency and a technology bank."

These initiatives are being taken to boost credit to the SSI sector to Rs 1,23,000 crore by 2006-07. "We are talking to World Bank for a line of credit of $120-150 million dollars. In addition, we are negotiating for a $50 million loan for setting up a credit rating agency for SSI firms," Chopra said.

The rating agency is expected to be operational in about a year's time. Banks, including Punjab National Bank, have evinced interest in becoming part of the rating agency.