Cabinet Clears Rs 5,000 Crore Capital Infusion To Strengthen SIDBI Lending To MSMEs

New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved an equity infusion of Rs 5,000 crore into the Small Industries Development Bank of India (SIDBI) to boost credit flow to Micro, Small and Medium Enterprises (MSMEs).

“The equity infusion will help SIDBI maintain a healthy capital base and strengthen its ability to extend affordable credit to MSMEs,” the Centre said.

According to the government, the move is expected to increase the number of MSMEs receiving financial assistance from 76.26 lakh in 2025 to around 1.02 crore by 2028. This includes the addition of about 25.74 lakh new MSME beneficiaries.

The Centre said the expanded lending is likely to generate significant employment, with estimates pointing to over 1.12 crore new jobs by 2027–28, based on current MSME employment trends.

The government noted that rising risk-weighted assets due to higher lending, digital credit products and venture debt for startups would require stronger capital support.

“The approved equity infusion will ensure SIDBI maintains a healthy capital adequacy ratio and protects its credit rating,” it said.

The Centre further added that a strong capital position will allow SIDBI to raise funds at reasonable interest rates and pass on the benefit to MSMEs through cheaper and wider access to credit.

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