Small Industries Development Bank of India (SIDBI) is working on a co-lending model with Regional Rural Banks (RRBs) to expand affordable MSME credit access across rural India, SIDBI Chairman and Managing Director Manoj Mittal said during the institution's 37th Foundation Day celebrations.

Addressing the event, Mittal said the initiative was conceptualised following directions from Finance Minister Nirmala Sitharaman during a review meeting of RRBs.

"SIDBI was tasked with creating a risk sharing mechanism with the RRBs. The whole project required convincing RRBs, regulatory approvals, creating loan policies for each RRB, and a friendly technology platform," Mittal said.

He added that SIDBI has already conducted a pilot with branches of three RRBs and the initial response has been encouraging.

"We have done a pilot with a few branches of three RRBs, and the results have been quite encouraging. With 23 branches of RRBs, we intend to extend affordable MSME credit at a scale to every corner of Bharat," he said.

Mittal said the initiative combines SIDBI's MSME financing expertise and digital capabilities with the grassroots reach of RRBs to strengthen last-mile credit delivery in rural and semi-urban areas.

Speaking about SIDBI's expansion, Mittal said the institution has increased its branch network significantly after the government encouraged it to scale operations in MSME clusters.

"Now, very happy to announce that we have reached 166 branches as of March 2026, from 96 in March 2024," he said.

According to Mittal, SIDBI is currently covering around 196 MSME clusters and the expanded branch network has generated additional direct finance business of around ₹4,000 crore.

"These branches have given us additional direct finance business of about ₹4,000 crores. Some of these branches are able to reach the breakeven point in less than 12 months," he said.

Mittal also said SIDBI plans to expand its partnerships with industry associations from 105 currently to 500 over the next two years as part of its developmental initiatives for the MSME sector.

Published on May 25, 2026