“Using returnable capital rather than grants, they will be able to start and expand businesses and pay money back so that it can be used to deliver another cycle of benefits.
The UK Government’s Department for International Development (DFID) launched its first private sector development programme in India in partnership with the Small Industries Development Bank of India (SIDBI) in Delhi today. Samridhi, meaning prosperity, aims to help poor people in India’s low income states get access to financial services to improve their income and quality of life as well as by promoting responsible and sustainable private sector investment.
Announcing the new project at the British Council in New Delhi, Andrew Mitchell, British International Development Minister said:
“I believe that entrepreneurs with innovative and creative ideas, who take risks and work hard to produce a product or a service, especially those which can help poorer segments of society, deserve to be encouraged and supported.
“Using returnable capital rather than grants, they will be able to start and expand businesses and pay money back so that it can be used to deliver another cycle of benefits. I am proud that DFID is able to provide such support to help start and grow businesses like the ones showcased earlier this evening.”
Sushil Muhnot, Chairman, SIDBI, observed that there is a welcome shift towards impact investments by development agencies and Samridhi has the potential to become a model for such investment programmes in future. He mentioned that SIDBI had helped a network of Micro Finance Institutions in the country under National Micro Finance Support Programme supported by DFID among other institutions reaching 6.6 million poor clients and the present programme would enable us to replicate the success in identified Samridhi states. He hoped that the programme would go a long way in reducing poverty in the identified states.
Samridhi will create an Impact Investment Fund in India’s low income states to provide patient capital to enterprises that deliver benefits to poor people (e.g. jobs or lower-cost products).
Samridhi will also extend the reach of financial services in underserved areas in Bihar, Madhya Pradesh, Orissa and Uttar Pradesh. This will directly benefit 12 million poor people, of which three-fourth are women, to raise their incomes, set up or grow businesses, save for family needs like their children’s education, and cope with unforeseen shocks like a death in the family.
The programme will contribute to Indian central and state government priorities of promoting inclusive growth, including through financial inclusion and investment in small and medium enterprises. It represents a UK commitment of £65 million (Rs 520 crores) between 2012 and 2019.
The launch brought together over 200 distinguished representatives from the Government of India, private sector, social enterprises, academia, non-governmental organisations and multilateral partners. The launch also showcased private sector initiatives that are delivering development results, for example, Waterlife, D’lite and B-ABLE.
source: http://www.indiainfoline.com / Markets> News> Corporate News / India Infoline News Service / December 19th, 2011