SIDBI expects advances to grow by 25 per cent

NEW DELHI: SME financing institution Small Industries Development Bank of India (SIDBI) on Monday said it expects loan growth of 25 per cent during the current year.

"Direct finances to small and medium enterprises are likely to witness a growth of 25 per cent during the current fiscal," SIDBI Deputy Managing Rakesh Rewari told on the sidelines of seminar organised by LBSIM.

The advances made by the institution stood at Rs 511 crore in 2006-07 against Rs 345 crore in the previous year registering a growth of 48 per cent.

However, total direct and indirect finances together stood at Rs 910 crore in 2006-07.

He also said that in order to safeguard the margin the institution in the last four months have increased its prime lending rate by one per cent.

Talking about the Rs 100 crore Private Equity fund set up a couple of months ago, Rewari  said, SIDBI is currently shortlisting companies for the investment.

It has received applications from many companies seeking growth capital, which are being shortlisted. Some identified sectors are auto ancillary, IT, Pharma and textile, he said.

The average deal would be in the range of Rs 5 crore, he said, adding the entire corpus has been raised internally.

Besides, it has also set aside Rs 50 crore for micro financing activity.