According to MSME Minister Narayan Rane, the SRI fund will benefit 5,000 MSMEs. In May 2020, Finance Minister Nirmala Sitharaman announced it would make equity investments in MSMEs growth once the fund is operational.
Furthermore, the SRI fund Fund will operate under the mother-fund and daughter-fund structure. It will also be listed on stock markets and be a part of global expansions as the fund is a SEBI-registered Category-II Alternative Investment Fund.
Credit and Finance for MSMEs
In a written reply on Thursday in Lok Sabha, Narayan Rane shared, “Assuming an average investment of Rs 10 crore per MSMEs, approximately 5,000 MSME are likely to be benefited.”
Narayan Rane said a commitment of Rs. 1,080 crore is approved so far, as informed by NSIC Venture Capital Fund Limited.
Simultaneously, the fund implementation is by a particular purpose vehicle called the NSIC Venture Capital Fund Limited.
How does the SRI Fund structure work?
The fund will operate under the mother-fund and daughter-fund structure, the government will be the sole anchor investor.
The initial budgetary support is Rs.10,000 as the mother fund and the remaining 80% Rs. 50,000 as the daughter fundraised from – financial institutions, banks, HNIs, private equity investors and venture capital, pension funds, and foreign developmental institutions.
Furthermore, presently five daughter funds viz., MegaDelta Fund I, Carpediem Capital Partners Fund II, BanyanTree India Growth Capital Fund, StakeBoat Capital Fund II, SVL-SME Fund (Neev II) reflected on the NVCFL portal.
The MSME Ministry said in its 2021 year-end review that the SRI funds would deploy in phases as per the requests from the empanelled daughter funds.
Lastly,
The minister said, “MSMEs as per the definition given in the MSMED Act shall be eligible provided, after assessment, they are found viable, have a positive growth trajectory, and have a defined business plan for growth. Previous three years CAGR will be considered.”
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