The World Bank has approved $400 million additional financing loan to the Small Industries Development Bank of India (SIDBI), which is aimed at improving access to finance for Small and Medium Enterprises (SMEs).
This will help scale up the fully disbursed original project which had been approved by the World Bank on November 30, 2004, the bank said in a statement.
World Bank Country Director for India Roberto Zagha said the project is part of a larger programme of support in response to India's request for funding in light of the financial crisis. "It is targeted particularly at SMEs, to help address the credit slowdown that has resulted from the financial crisis," he said.
"Achieving and sustaining growth and employment will require a sharp step up in industrial and services growth. This needs to be spurred by SMEs which have the greatest potential to provide employment," he said.
The credit facility supported by the project will channel long-term and working capital loans for SMEs in geographical areas beyond those that were covered in the original project. This includes expanding to new geographical areas, possibly to India's low-growth states, thereby promoting inclusive growth, the bank said.