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SIDBI, Maharashtra government form $31m start-up fund

  • Holden Mann
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The government of the Indian state of Maharashtra has paired with the Small Industries Development Bank of India (SIDBI) to set up a INR2 billion ($31.1 million) venture fund for micro, small and medium enterprises (MSMEs).

The state will contribute INR750 million of the fund corpus, with the rest coming from banks and other financial institutions. SIDBI said that fundraising will begin once the vehicle is registered with the Securities and Exchange Board of India, according to YourStory.

The fund will aim to invest a maximum of INR250 million in its portfolio companies. SIDBI indicated that the vehicle would seek an active role in investees.

Recently the Maharashtra government has moved to encourage job growth by promoting MSMEs. It sees small enterprises as the most likely employers for the under-25 segment, which comprises nearly half of the state's population.

Other steps in this direction include making it easier for entrepreneurs to start new businesses by reducing the number of approvals required from 76 to 25.

SIDBI has participated in similar ventures before. Last year it joined with the Indian Angel Network and German development aid agency GIZ to launch an incubation program for sustainable and scalable businesses in the social impact space.

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