Parul
State Bank of India Chairman Rajnish Kumar has reportedly said that to provide Rs 50,000 crore equity support to stressed MSME units, a Fund of Funds announced as part of the Rs 20.97 lakh crore Aatmanirbhar Bharat Abhiyan package is expected to get operational soon.
The SBI chairman highlighted that the objective of the Rs 10,000 crore Fund of Funds scheme is to help MSMEs with growth potential at a time when they are facing severe shortage of equity and low revenues.
The chairman also quoted that earlier the banks had announced an emergency credit line for such businesses to improve their liquidity which have been hit by the outbreak of COVID-19. Another liquidity enhancement measure was through support by way of a subordinated debt which was guaranteed by the government for the troubled MSMEs, the chairman added.
The Fund of Funds (FOF) scheme was announced by finance minister Nirmala Sitharaman in May to help MSMEs with growth potential and viability even as they face severe shortage of equity. The finance minister had specified that the fund will be operated through a Mother Fund and a few daughter funds to enable MSMEs expand in size and capacity and would also encourage them to list on the main board of stock exchanges.
The FOF scheme is intended to help those businesses who are in their nascent and initial stages, where there are almost no prospects to raise funds through the help of professional corporations or venture capitalists.
