SIDBI Conclave Urges RRBs To Expand MSME Co-lending
ECONOMY & POLICY

SIDBI Conclave Urges RRBs To Expand MSME Co-lending

The Small Industries Development Bank of India (SIDBI) organised a conclave in New Delhi with heads of Regional Rural Banks (RRBs) to discuss expanding the SIDBI-RRB co-lending arrangement for micro, small and medium enterprises (MSMEs) and strengthening credit access in rural and semi-urban areas. The conclave was chaired by Sanjay Lohiya, Secretary, Department of Financial Services (DFS), and attended by Manoj Mittal, Chairman and Managing Director (CMD) of SIDBI, senior officials from DFS and National Bank for Agriculture and Rural Development (NABARD), and the chairmen of all 28 RRBs.

The DFS Secretary underlined the need to scale up MSME lending in rural and semi-urban areas by combining SIDBI's expertise in MSME credit with the outreach of RRBs across smaller towns and villages. The proposed co-lending model is intended to help RRBs diversify loan portfolios and increase their focus on MSME lending, while rule engine underwriting should support faster assessment and preserve asset quality.

The Additional Secretary at DFS highlighted using MSME cluster data to target and reach more enterprises through a focused lending approach. RRBs were urged to support India’s aim of becoming a next-generation manufacturing hub and to take part in Rozgar Melas organised to promote financial awareness among MSMEs.

The Joint Secretary at DFS suggested that RRBs make MSME lending under the co-lending arrangement a branch level target and SIDBI's CMD urged active participation to make the initiative successful. SIDBI's Co-Lending Origination Platform is an end-to-end digital system designed to provide borrowers a faster, paperless credit journey and to simplify processing without branch visits.

The platform enables quicker processing, sanction and disbursement with digital documentation and transfer of sanctioned funds directly to borrowers' bank accounts, and applicants receive in principle sanction within a short turnaround once they submit required details. It has been piloted at three RRBs with encouraging results and the proposed expansion to additional RRBs is expected to improve access to institutional credit for micro and small enterprises in rural and semi-urban areas.

The Small Industries Development Bank of India (SIDBI) organised a conclave in New Delhi with heads of Regional Rural Banks (RRBs) to discuss expanding the SIDBI-RRB co-lending arrangement for micro, small and medium enterprises (MSMEs) and strengthening credit access in rural and semi-urban areas. The conclave was chaired by Sanjay Lohiya, Secretary, Department of Financial Services (DFS), and attended by Manoj Mittal, Chairman and Managing Director (CMD) of SIDBI, senior officials from DFS and National Bank for Agriculture and Rural Development (NABARD), and the chairmen of all 28 RRBs. The DFS Secretary underlined the need to scale up MSME lending in rural and semi-urban areas by combining SIDBI's expertise in MSME credit with the outreach of RRBs across smaller towns and villages. The proposed co-lending model is intended to help RRBs diversify loan portfolios and increase their focus on MSME lending, while rule engine underwriting should support faster assessment and preserve asset quality. The Additional Secretary at DFS highlighted using MSME cluster data to target and reach more enterprises through a focused lending approach. RRBs were urged to support India’s aim of becoming a next-generation manufacturing hub and to take part in Rozgar Melas organised to promote financial awareness among MSMEs. The Joint Secretary at DFS suggested that RRBs make MSME lending under the co-lending arrangement a branch level target and SIDBI's CMD urged active participation to make the initiative successful. SIDBI's Co-Lending Origination Platform is an end-to-end digital system designed to provide borrowers a faster, paperless credit journey and to simplify processing without branch visits. The platform enables quicker processing, sanction and disbursement with digital documentation and transfer of sanctioned funds directly to borrowers' bank accounts, and applicants receive in principle sanction within a short turnaround once they submit required details. It has been piloted at three RRBs with encouraging results and the proposed expansion to additional RRBs is expected to improve access to institutional credit for micro and small enterprises in rural and semi-urban areas.

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