Want finance? Call SIDBI

If you are a small or medium business (SMB) company or are a solution
provider for a SMB wanting finance of up to Rs 25 lakh for building their IT
infrastructure, then the Small Industries Development Bank of India (SIDBI) has
good news for you. To help small business houses get finance quickly, SIDBI has
decided to offer quick finance loans of up to Rs 25 lakh. And this will be
without attaching any collateral, unlike other financial institutions.

For solution providers, a loan of Rs 25 lakh can come in handy for scaling
their in-house IT infrastructure or for short-term projects. For eg, partners
bidding for government tenders often have to make an earnest money deposit. The
loan can be utilized for this purpose. Or if a partner has five customers who
want material worth RS 2 lakh each, then he can raise a loan to buy the products
and pass them on to his customers.

The financial body is planning to go for online processing of these loans to
expedite the disbursement. It is also working out a flexible credit delivery
mechanism. "We will have one general manager to look after the IT finance
products and its development. Recently, we signed an MOU with Intel to enable
SMEs to participate in this IT revolution," said N Balasubramanian,
Chairman & MD, SIDBI. He hopes to have more tie-ups of this nature with
other vendors in the near future.

The SMB segment contributes 40% to India's GDP. The reason SIDBI has
decided to take this lead in these options is because it feels the finance
available to these SMBs are inadequate and commercial banks are not aggressive
in their offerings. Balasubramanian outlined that some challenges a SMB faces is
getting timely and adequate credit. This is why SIDBI had set up a Rs 10,000
crore SMB fund in 2004 offering loans at 9.5% interest.

VINITA BHATIA