On 21 January 2026, the Union Cabinet approved a ₹5,000 crore equity infusion into the Small Industries Development Bank of India (SIDBI). The decision, taken to be implemented over FY26–FY28, aims to strengthen SIDBI’s capital base, expand affordable credit to MSMEs, maintain capital adequacy, and support employment generation amid rising demand for small-business finance across India.

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• The Cabinet approved a ₹5,000 crore equity infusion into SIDBI to enhance MSME lending and maintain capital adequacy.
• The support will be provided by the Department of Financial Services in a phased manner over three years (FY26–FY28).
• ₹3,000 crore will be infused in FY26 at a book value of ₹568.65 per share.
• The remaining ₹2,000 crore will be infused as two equal tranches of ₹1,000 crore each in FY27 and FY28.
• The infusion will strengthen SIDBI’s ability to provide direct and indirect credit through banks, NBFCs, and MFIs at competitive rates.
• The number of MSMEs supported is expected to rise from 76.26 lakh (FY25) to around 1.02 crore by FY28.
• Nearly 25.74 lakh additional MSMEs are projected to gain access to formal finance.
• Expanded MSME lending could generate about 1.12 crore new jobs by FY28, supporting inclusive growth.
• Higher capital is required as risk-weighted assets rise due to digital, collateral-free lending and venture debt exposure.
• Adequate capital will help protect SIDBI’s credit rating, enabling cheaper market borrowings.