SIDBI's direct MSME lending surges nearly four-fold in five years: Govt

New Delhi [India], August 3 (ANI): The Small Industries Development Bank of India (SIDBI) has significantly expanded its direct lending to Micro, Small and Medium Enterprises (MSMEs) over the past five years, with both loan sanctions and the outstanding loan book witnessing sharp growth, according to information shared by the Finance Ministry in the Lok Sabha.
The government said SIDBI's direct credit sanctions increased from Rs 6,124 crore in FY 2021-22 to Rs 24,323 crore in FY 2025-26, reflecting a sharp rise in financial support extended to MSMEs. During the same period, the bank's outstanding direct credit portfolio grew from Rs 13,930 crore to Rs 39,895 crore.
The Finance Ministry said the increase in lending is part of SIDBI's broader efforts to improve access to finance for MSMEs through a combination of direct lending, indirect lending and digital financing initiatives.
It stated, "Financial assistance through refinance and onlending is extended to Banks, NBFCs, SFBs and MFIs which is used by these institutions for financing of MSMEs. This creates a multiplier effect and increases the flow of credit to MSMEs. As on 31.03.2026, the total indirect lending portfolio of SIDBI is Rs 5.24 Lakh crore".
Apart from lending directly through its branch network, SIDBI has continued to support MSMEs through refinance and on-lending to banks, Non-Banking Financial Companies (NBFCs), Small Finance Banks (SFBs) and Microfinance Institutions (MFIs), helping expand the flow of credit to the sector.
SIDBI is the main financial institution in India for the promotion, financing, and development of Micro, Small, and Medium Enterprises (MSMEs). Established on April 2, 1990, it operates under the Department of Financial Services.
The government also highlighted SIDBI's growing focus on digital lending. The institution is facilitating credit through initiatives such as the GST Sahay application and has become a participant across all five Trade Receivables Discounting System (TReDS) platforms, enabling faster financing against invoices for MSMEs.
To further strengthen financing, SIDBI has also partnered with NBFCs and Regional Rural Banks under co-lending arrangements to improve credit access, particularly for small businesses that may otherwise find it difficult to obtain loans.
The Finance Ministry said SIDBI has also established the SIDBI Cluster Development Fund (SCDF) to provide low-cost funding to state governments for developing infrastructure in MSME clusters. In addition, the bank is implementing the Modernization of Rural Enterprises (MoRE) programme to enhance the productivity and competitiveness of rural non-farm enterprises through financial assistance and capacity-building support.
The information was provided by Finance Minister Nirmala Sitharaman in a written reply in the Lok Sabha while outlining measures taken by the government and SIDBI to improve access to finance for MSMEs. (ANI)