SME growth fund to boost capital access, strengthen investor confidence: Industry

New Delhi, Oct 7 (IANS) Industry leaders on Wednesday welcomed the Union Cabinet’s approval of a Rs 10,000-crore SME Growth Fund, saying the initiative will improve access to growth capital for small and medium enterprises while enhancing investor confidence in the sector.

According to industry representatives, one of the biggest challenges faced by SMEs is securing adequate funding for expansion. The new fund is expected to address this gap by providing equity support to promising businesses and helping them raise capital more efficiently.

Ranjeet Mehta, CEO and Secretary General of the PHD Chamber of Commerce and Industry (PHDCCI), described the move as a major step toward strengthening India’s SME ecosystem.

He said government participation through equity investments would not only help enterprises access funds but also encourage greater participation from private investors by improving confidence in the sector.

Mehta noted that the initiative would support SMEs seeking to access capital markets through SME initial public offerings (IPOs). This, he said, would create new opportunities for businesses looking to scale operations, expand capacity, and accelerate growth.

Industry bodies also believe the fund could have a multiplier effect on financing available to smaller enterprises. K. Satish Nagaraj, Vice President of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), said the scheme could mobilise significantly larger pools of capital through participation from SEBI-regulated financial institutions.

He added that the initiative is expected to benefit businesses in Tier-2 and Tier-3 cities, where access to institutional funding has traditionally been limited.

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the establishment of the SME Growth Fund on Tuesday. The fund aims to provide growth-oriented capital to small and medium enterprises and support the expansion of high-potential businesses operating in manufacturing, services, technology, innovation-driven sectors, and strategic value chains.

The initiative forms part of the broader measures announced in the Union Budget 2026-27 to strengthen the MSME ecosystem through improved access to equity capital, liquidity support, and professional assistance.

–IANS

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