Corporatization for MSMEs - msme-mentor.in

Corporatization for MSMEsSIDBI Foundation for Micro Credit (SFMC)SFMC is a specialized department of SIDBI set up in 1999 for Micro credit. It carries a mission to create anational network of strong, viable and sustainable Micro Finance Institutions (MFIs) from the informal financialsector to provide micro finance services to the poor, especially women. SFMC is an apex wholesaler for Microfinance in India with a diverse range of financial products such as loan, grant, equity, quasi equity etc. It hasset up a risk fund with support of DFID for small NGOs/ startups and under served states. It has been investingin MFIs through equity/ quasi equity instruments under SIDBI Growth Fund for MFIs. In keeping with itsmission, SFMC identifies, nurtures and develops select potential MFIs as long term partners and providescredit support for their micro credit initiatives. Under the present dispensation, annual need based assistanceis provided to enable MFIs to expand their scale of operations and achieve self sufficiency at the earliest.Lending is based strictly on an intensive in-house appraisal supplemented with the capacity assessmentrating by an independent professional agency. Relaxed security norms have been adopted to reduceprocedural bottlenecks as well as to facilitate easy disbursement.Frequency and quantum of loanMicro FinanceSFMC provides annual / need based repeat assistance to its partner MFIs. Loan assistance per MFI foronlending is subject to a minimum of Rs 10 lakh. Variation in the minimum loan limit may also be considereddepending upon the merits of the case.Ceiling on individual loan amount per borrowerNormally, maximum amount lent by the MFIs to an individual borrower / SHG member may not exceed Rs25000/-. In exceptional and extremely deserving cases, particularly for enterprises and housing, a higheramount per borrower could be considered.Repayment period of loans to MFIsRepayment period (including moratorium) is generally upto to 4-years from the date of disbursement. Theinitial moratorium on the principal outstanding ranges from 3-12 months from the date of first disbursement.Both repayment period and moratorium can be extended beyond stipulated period depending upon the meritsof case.37