New Delhi, January 21, 2026: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved an equity support of ₹5,000 crore to the Small Industries Development Bank of India (SIDBI) to strengthen its capital base and enhance the flow of credit to the micro, small and medium enterprises (MSME) sector.
The equity infusion will be made by the Department of Financial Services in a phased manner. Of the total amount, ₹3,000 crore will be infused in the financial year 2025–26 at a book value of ₹568.65 per share as on March 31, 2025, while ₹1,000 crore each will be provided in the financial years 2026–27 and 2027–28 at the book value as on March 31 of the preceding financial year.
Following the capital infusion, the number of MSMEs receiving financial assistance from SIDBI is expected to increase from 76.26 lakh at the end of 2025–26 to about 1.02 crore by the end of 2027–28, resulting in the addition of approximately 25.74 lakh new beneficiaries. Based on official data indicating an average employment generation of 4.37 persons per MSME, the expansion is estimated to create employment opportunities for around 1.12 crore people. According to the news service associated news bureau ANB,The government said the equity support is necessary in view of the anticipated rise in SIDBI’s risk-weighted assets due to the expansion of directed credit and the growing portfolio of digital, digitally enabled and collateral-free credit products, as well as venture debt financing for start-ups. The increased capital will help SIDBI maintain a healthy Capital to Risk-weighted Assets Ratio (CRAR), which is critical for protecting its credit rating and sustaining long-term growth.
The phased equity infusion is expected to enable SIDBI to maintain a CRAR above 10.50 per cent under high-stress scenarios and above 14.50 per cent under regulatory requirements over the next three years. This, in turn, will allow the institution to mobilise resources at competitive interest rates and increase affordable credit flow to MSMEs across the country. ANB
