The Union Cabinet has approved equity support of ₹50 billion (~$545.72 million) to the Small Industries Development Bank of India (SIDBI).

SIDBI offers loans to micro, small, and medium enterprises (MSMEs) for the purchase of machinery, working capital, and projects, including the installation of solar projects.

The Department of Financial Services will infuse this equity support into SIDBI in three tranches. These include a tranche of ₹30 billion (~$327.43 million) in the financial year (FY) 2026, and two tranches each of ₹10 billion (~$109.14 million) in FY 2027 and FY 2028.

The number of MSMEs supported will increase from approximately 7.62 million at the end of FY 2025 to 10.2 million by the end of FY 2028, following the provision of a ₹50 billion (~$545.72 million) equity infusion, leading to roughly 2.57 million new MSMEs added as beneficiaries.

The Cabinet stated that about 69 million MSMEs generate 301.6 million employment roles. Considering this, the new 2.57 million MSME beneficiaries are expected to generate 11.2 million roles by the end of FY 2028.

SIDBI provides green finance, particularly for solar and wind projects, at competitive rates of interest. It offers three major sustainable financing options tailored to investment type and customer category.

The first option is the Electronics and Green Products Scheme (eGPS), which encourages MSMEs to adopt responsible sourcing and reduce carbon footprint, providing loans of up to ₹50 million (~$558,126). The second is the End-to-End Energy Efficiency (4E) financing, which caters to mid-sized projects and provides loans of up to ₹150 million (~$1.67 million), subject to a maximum promoter contribution of 75% of the project cost.

The eGPS and 4E programs apply to existing entities of at least three years and satisfactory financials.

Projects that do not qualify under these financing options are covered under the green financing program. This program covers greenfield and major expansion projects with project costs exceeding ₹150 million (~$1.67 million).