SIDBI partners with Yes Bank to facilitate working capital for its MSME customers

Working capital is like the fresh air one breathes for any business owner. In a move to fulfill the working capital needs of its Micro, Small and Medium Enterprise (MSME) clients, Small Industries Development Bank of India (SIDBI) signed a MoU with Yes Bank on May 30, 2018.

According to the deal, Yes Bank will provide banking services, including working capital, to SIDBI customers at its 1100 branches across the country. The Business Standard reported that a MoU was signed between SIDBI chief general manager K I Mani and YES Bank group president (international and institutional banking) Arun Agarwal in Lucknow.

At present, only about 550 SIDBI customers avail its working capital facility. The newspaper quoted SIDBI’s KI Mani as saying, “We want to refocus on this area and have partnered with Yes Bank to route the working capital needs of our MSME customers through their counters." The report added that as MSME refinancer, “SIDBI had been more focused on providing term loan to enterprises, who had to approach other commercial banks for their working capital and other routine banking needs.”

Yes Bank’s Arun Agarwal said “SME advances comprised almost 22% of Yes Bank’s total advances of about Rs 2 trillion. Through this association with SIDBI, we want to expand our SME portfolio and reach out to more customers.”

According to the media report, Uttar Pradesh (UP) posted highest growth in MSME credit with total outstanding of Rs 570 billion at the end of December 2017. Between December 2016 and December 2017, UP registered MSME credit growth of 21%, which is double compared to corresponding figures of Gujarat and Maharashtra clocking growth of 10.7% and 10% respectively. UP was followed by Andhra Pradesh 18.6%, Rajasthan 18.3% and Haryana 18%.