SIDBI sets up guarantee funds for collateral free loans in NE

Guwahati, Oct 10 (UNI) The Small Industries Development Bank of India (SIDBI) today released 27 project profiles for entrepreneurs in North East, with the financial body also setting up a guarantee fund for security free loans in the region.

The project profiles were released by Reserve Bank of India (RBI) Deputy Governor Usha Thorat at a review meeting of the Committee on Financial Sector Plan for North Eastern Region.

SIDBI Chairman and Managing Director R M Malla, talking to UNI, said more than 80 such project profiles will be prepared within the next two months.

The North Eastern Industrial and Technical Consultancy Organisation was entrusted with the task of preparing project profiles for 100 projects, but only 27 were ready. The remaining would be out soon, Mr Malla said.

The sectors for which the project profiles have been prepared include demand-based industries, agro-based and food processing. The projects cost has been kept within Rs 35 lakh.

Mr Malla informed that if any bank in NE financed up to 75 per cent of any individual project, SIDBI would provide the rest. A corpus fund of Rs 10 crore has also been kept for the purpose.

He said, '' This project plan for SMEs by SIDBI has many additional features to benefit the entrepreneurs. We want more and more people to come and derive the maximum benefits.'' An important step by SIDBI in NE, Mr Malla informed, was the organization's decision to set up a corpus fund as guarantee for those borrowers who cannot provide collateral.

He said, '' The hills states and areas of the region do not have land rights in formal documents and it becomes difficult for a small time farmer or businessman to get money from banks without any collateral.'' He said the SIDBI would set up a corpus fund of Rs 2,500 crore as a guarantee fund for loans up to Rs 50 lakh in NE and commercial banks can treat this corpus fund as a collateral while lending in specific parts of the region.

UNI