SME funding to get Rs 5,000-cr boost

The government, with the help of the capital market regulator, is planning to set up a first of its kind co-investment fund to fund small and medium enterprises (SMEs), considered the backbone of the Indian economy.

According to sources, the fund will have an initial corpus of Rs 5,000 crore and anchored by two state-owned financial institutions — insurance behemoth Life Insurance Corporation (LIC) and Small Industries Development Bank of India (SIDBI), an institution set up to provide funding for SMEs.

The fund will be modelled around similar investment vehicles set up in developed nations like Germany and Austria, to address financing challenges to start-ups, especially in the high growth sectors like technology.


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