SIDBI, NASSCOM sign MOU for MSMEs in IT/ITES sector
Small Industries Development Bank of India (SIDBI) and The National Association of Software and Services Companies (NASSCOM), signed a Memorandum of Understanding (MOU) on December 28, 2012 at Mumbai in the presence of Shri S.Muhnot, Chairman and Managing Director, SIDBI and Shri Som Mittal, President, NASSCOM. SIDBI and NASSCOM will work together for entrepreneurship growth and development of MSMEs in the Information and Communication Technology sector in the country and develop synergies in their activities to achieve this objective.
SIDBI and NASSCOM would also explore and work on various avenues related to entrepreneurship like policy advocacy, structuring of new risk capital / other direct loan products etc. to create an enabling ecosystem for fostering entrepreneurship and development of MSMEs in the ICT sector.
After initial screening, NASSCOM would refer projects of its eligible members to SIDBI for availing financial assistance under its Risk Capital / Direct Credit Schemes.
As per the MOU, NASSCOM and SIDBI will create a joint working group to oversee the operationalisation of the MOU. NASSCOM shall also facilitate mentoring of MSMEs assisted by SIDBI under this arrangement.
Muhnot explained SIDBI’s role in financing service sector entities both by way of term loan and equity capital. He assured that benefits under the MoU would be extended to eligible NASSCOM members under SIDBI’s Subordinated Debt Scheme also, to enable them to achieve growth in operations through better capitalisation and higher leveraging. He also emphasised that companies with prospects for good valuation in future could be given direct equity support through SIDBI Venture Capital Limited [SVCL].
Som Mittal, while thanking SIDBI for partnering with NASSCOM, emphasised the need for a proper mechanism to be put in place which would ensure that the right kind of proposals from its members are referred to SIDBI based on the product features and likelihood of acceptance under SIDBI’s financing programme.
Muhnot and Mittal emphasised the need to understand each others requirements with the overall objective of making increased capital available to the IT industry to grow at the targeted pace.