The UK Government has partnered with the Small Industries Development Bank of India (SIDBI) by committing £65 million to increase financial inclusion among low-income communities in India. The program, named Samridhi, intends to extend capital to help entrepreneurs grow their businesses. The financial commitment in the program is expected to be used between 2011 and 2019 and will also help establish an Impact Investment Fund providing patient capital to low-income entrepreneurs.
NEW DELHI: The UK has launched private sector development programme in India with a commitment of 65 million pound (Rs 520 crore) in partnership with the Small Industries Development Bank of India (SIDBI).
‘Samridhi’ aims to help the poor in low income states get access to financial services to improve their income and quality of life as well as by promoting responsible and sustainable private sector investment, British International Development Minister Andrew Mitchell said here.
He said, “I believe that entrepreneurs with innovative and creative ideas, who take risks and work hard to produce a product or a service, especially those which can help poorer segments of society, deserve to be encouraged and supported.”
Using returnable capital rather than grants, they will be able to start and expand businesses and pay money back so that it can be used to deliver another cycle of benefits, he said.
The programme will contribute to Indian central and state government priorities of promoting inclusive growth, including through financial inclusion and investment in small and medium enterprises. It represents a UK commitment of 65 million pound (Rs 520 crores) between 2012 and 2019.
Samridhi will create an Impact Investment Fund in India’s low income states to provide patient capital to enterprises that deliver benefits to poor people.
It will help extend the reach of financial services in Bihar, Madhya Pradesh, Orissa and Uttar Pradesh.
This will directly benefit 12 million poor people, of which three-fourth are women, to raise their incomes, set up or grow businesses, save for family needs like their children’s education, and cope with unforeseen shocks like a death in the family.
SIDBI Chairman Sushil Muhnot said there is a welcome shift towards impact investments by development agencies and Samridhi has the potential to become a model for such investment programmes in future.
SIDBI had helped a network of Micro Finance Institutions in the country under National Micro Finance Support Programme supported by UK’s Department for International Development among other institutions reaching 6.6 million clients and the present programme would enable us to replicate the success in identified Samridhi states, Muhnot said.