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RBI recommends Rs 10,000 crore government sponsored fund of funds for MSMEs

Updated : June 27, 2019 08:02 AM IST

The RBI has recommended to set up a Fund of Funds (FoF) to support the venture capital and private equity funds investing in the MSME sector on modified term sheets developed by SIDBI.
SIDBI will act as a facilitator to create the platform wherein various venture capital funds can participate and in turn create a multiplier effect for providing equity support to MSMEs, the report added.
The RBI also recommended to set up a distressed asset fund of Rs 5000 crore to assist units in clusters where a change in the external environment has led to a large number of MSMEs becoming NPA.

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