Maharashtra sets up Rs 200 cr VC fund for MSMEs, plans dedicated industrial policy

State-run Sidbi (Small Industries Development Bank of India) and Maharashtra Government have set up a Rs 200 crore venture capital fund, with a view to providing easy financing options to micro, small and medium entrepreneurs (MSMEs), which traditionally face hurdles in formal sources of funding. While the state has committed to contributing Rs 75 crore towards the fund, the rest will be raised from banks and other financial institutions.

"We have set up a separate fund, the Rs 200 crore Sidbi Social Venture Fund, to enable MSMEs in the state easy access to financing. The aim is to invest in firms to create a social impact on the common man. We will soon register the fund with the Securities and Exchange Board (Sebi), post which we will start raising fund," Sidbi Venture Capital Managing Director and Chief Executive Officer Ananta Sarma said, adding the fund will invest up to Rs 25 crore in the MSMEs. "The investment will be in the form of equity and we will have a share in the firm and also take risk along with the entrepreneur," Sarma added.

According to PTI, Maharashtra has also decided to come up with a dedicated industrial policy for MSMEs to provide them all the necessary incentives and facilities setting up of their businesses in the state. At present nearly 50 per cent of Maharashtra's population is below the age of 25 years and there is a need to provide employment to them.

"To promote MSMEs, which is the biggest employment generating sector, we have decided to come up with a dedicated industrial policy to provide them all necessary incentives and facilities to set up their businesses in the state," Chief Minister Devendra Fadnavis said recently. The state has already prepared an industrial policy with an aim to facilitate ease of doing business for all entrepreneurs, he said at a seminar, 'Parivartan', organised jointly by Maharashtra government and industry body CII.

"There has been a misconception that this industrial policy is only for large businesses and that there is nothing for the MSMEs. But now we have decided to introduce a policy that will only take care of the needs of MSMEs. To provide employment to this large population, we will have to promote the MSME sector. Also, we are working towards reducing the number of approvals required for setting up a business to 25 from the current 76. We believe that by July we will be able to achieve this target," Fadnavis added.

Speaking at the event, State Industries Minister Subhash Desai said the government is planning to set up an organisation to cater to the needs of MSMEs. He said the trade and investment facilitation cell, 'Maitri', started by the government in Mumbai, will now be launched across the state in phases. The cell looks into the requirements of investors and facilitates business partnerships for MSMEs. Maitri also functions as a clearing house for all investment-related information like clearances, incentives, subsidies, grievances, and assists the state in projecting investment opportunity.

Earlier in the day, Union MSME Secretary Madhav Lal said: "The Centre is committed to the development of these entrepreneurs and is in continuous interaction with the state government to resolve their issues surrounding credit, skill development, infrastructure, marketing and technology."

Image Credits : Shutterstock