SIDBI signs MoU with FBL to Strengthen MSME Financing

Current Context: On March 6, 2025, the Small Industries Development Bank of India (SIDBI) and The Federal Bank Limited (FBL) signed an MoU in Hyderabad.

• The collaboration aims to strengthen financing for Micro, Small, and Medium Enterprises (MSMEs).
• Focus areas include project finance, machinery/equipment loans, working capital (letters of credit and bank guarantees), and loans against property.
• The agreement also explores joint financing opportunities to enhance credit access for MSMEs.
• The MoU was signed by Shri Prakash Kumar, Deputy Managing Director of SIDBI, and Shri Harsh Dugar, Executive Director of FBL.
• Senior officials from both institutions were present during the signing.
• This partnership reflects their commitment to bridge credit gaps and support the growth of India’s MSME sector.

Question:

Q.1 What is the primary objective of the MoU between SIDBI and Federal Bank?
a) Promoting digital banking services
b) Enhancing credit access for MSMEs
c) Supporting startups and fintech companies
d) Providing insurance to self-employed individuals

Answer: b) The MoU focuses on improving financial assistance to MSMEs through project finance, equipment loans, working capital, and property-backed loans.