Against a prevailing lending range of 11 to 15%, the annual interest rate for this loan is 2.5% below the normal lending rate as per the credit rating (both fixed and floating options are available) to attract more MSMEs to opt for energy efficiency measures. Until August 2017, 70 MSMEs had used this 4E financing scheme and received approximately EUR 10 million credit from the bank. India SME Technology Services Ltd. (ISTSL), an associate firm of SIDBI, has spearheaded the 4E intervention. It has also identified consultants or energy service companies based on their competences so that MSMEs can obtain easy and reliable expert help under the scheme. 5. Strengthen and create delivery channels: The project capacitated business intermediaries, especially Business Membership Organisations (BMOs) and Business Development Service Providers (BDSPs), including chartered accountants, to mobilise synergies between sustainable business and finance by informing MSMEs about innovative SCP-based financial products and public schemes, and supporting them with application procedures as well as linking them to banks and public funding agencies. At the same time, BMOs and BDSPs would be the point of information for FIs about MSME needs and performance with regard to SCP
Until August 2017, 70 MSMEs had used this 4E financing scheme and received approximately EUR 10 million credit from the bank.
pared based on project experience and disseminated widely to more than 500 banks, financial intermediaries, BMOs, development organisations, ministries and other key institutions in India. The project concluded in April 2016. It is still early to assess any policy level impact, however, four national banks and non-banking financial institutions have expressed interest in trying cluster-based financing for MSMEs.
AUTHORS Mukesh Gulati Executive Director, Foundation for MSME Clusters mukesh@msmefoundation.org as well as acting as a bridge between MSMEs and FIs.
In conclusion The key to effective implementation of such targeted intervention lies in the ability to design interventions with convergence. Such initiatives cannot be scaled up without coordination among various institutions, industry and service providers. With this objective, a learning paper entitled “Financing Sustainable Production among MSME Clusters – Experiential Learnings and Policy Recommendations”6 was pre-
Sangeeta Agasty General Manager, Foundation for MSME Clusters sangeeta.agasty @msmefoundation.org Ruchita Sanwal Manager, Foundation for MSME Clusters ruchita.sanwal @msmefoundation.org For more information about the Foundation for MSME Clusters, please visit: www.fmc.org.in
The project's major publications
6) http://www.switch-asia.eu/fileadmin/user_upload/Project%20news/MSME/Financing_sustainable_production.pdf
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