The Ministry of Micro, Small and Medium Enterprises (MSME) recently organised an awareness workshop on the Self-Reliant India (SRI) Fund, with a focus on strengthening women-led MSMEs. The initiative is designed to improve access to growth capital for viable MSMEs and help promising enterprises expand their scale and competitiveness.
About Self-Reliant India Fund
The SRI Fund has been established with a total investment framework of ₹50,000 crore to provide equity support to MSMEs that have the potential to grow into larger enterprises.
The fund consists of ₹10,000 crore from the Government of India and another ₹40,000 crore mobilised through private equity and venture capital funds.
The scheme follows a mother-fund and daughter-fund structure, enabling investments in MSMEs through equity or quasi-equity instruments.
Implementation and Funding Structure
The SRI Fund is implemented through NSIC Venture Capital Fund Limited (NVCFL), a Category II Alternative Investment Fund registered with SEBI. The Ministry of MSME acts as the Government’s anchor investor.
NVCFL provides support to selected daughter funds, which subsequently invest in eligible MSMEs as growth capital.
Objectives of the SRI Fund
The initiative seeks to:
- Increase equity and equity-like financing available to MSMEs.
- Help promising enterprises achieve faster growth and explore stock-market listings.
- Enable viable MSMEs to move beyond their existing size category and develop into national or global businesses.
- Support enterprises producing technologies, goods and services that contribute to India’s self-reliance.
- Encourage investment in businesses capable of generating employment and strengthening economic activity.
Investment Requirement
An important feature of the framework is the 5X investment requirement. Daughter funds are expected to invest at least five times the capital contribution received from the SRI Fund, after accounting for applicable fees and expenses, in eligible MSMEs covered under the MSMED Act, 2006.
Significance
By combining government-backed capital with private investment, the SRI Fund seeks to address the equity-financing gap faced by growth-oriented MSMEs. Greater access to patient capital can help viable businesses expand, create employment, improve competitiveness and contribute to India’s broader objective of building a self-reliant economy.
FAQs - Self-Reliant India Fund
What is the Self-Reliant India Fund?
The Self-Reliant India (SRI) Fund provides equity and quasi-equity financing to viable MSMEs with growth potential, helping them expand and improve competitiveness.
What is the total investment framework of the SRI Fund?
The article describes a ₹50,000 crore framework, comprising ₹10,000 crore from the Government of India and an envisaged ₹40,000 crore through private investment.
How does the SRI Fund provide financing to MSMEs?
It follows a mother-fund and daughter-fund structure. The mother fund supports selected daughter funds, which subsequently invest in eligible MSMEs.
What is the SRI Fund’s 5X investment requirement?
According to the article, daughter funds must invest at least five times the contribution received from the SRI Fund, after applicable fees and expenses, in eligible MSMEs.
How can the SRI Fund support MSME development?
It seeks to bridge the equity-financing gap, support business expansion, encourage employment and help promising MSMEs grow into larger national or global enterprises.
