Mumbai (Maharashtra) [India], May 25 (ANI): Union Finance Minister Nirmala Sitharaman on Monday said the Small Industries Development Bank of India (SIDBI) must move beyond traditional lending and play a bigger role in supporting India's MSME and startup ecosystem.

Addressing SIDBI's 37th Foundation Day celebrations in Mumbai, Sitharaman said the institution should emerge as a 'market maker and risk-sharing partner' for small businesses and startups.

'SIDBI's role must now expand from being only a lender to becoming a market maker and risk-sharing partner for India's MSME and startup ecosystem,' she said.

The Finance Minister said SIDBI should strengthen its presence in venture capital and debt markets to provide flexible and long-term capital support to early-stage businesses.

Highlighting the need for customised financing solutions for MSMEs, Sitharaman said uniform banking products cannot address the needs of different sectors.

'Standard products cannot serve non-standard businesses,' she said.

She said repayment structures should be designed according to the nature of businesses and their operating cycles, including agricultural units, engineering firms and tourism operators.

'Why should all of them be given the same repayment structure? Credit must be designed around the business cycle of the enterprise,' Sitharaman noted.

The Finance Minister also spoke about the government's efforts to protect businesses from global economic uncertainties, particularly the impact of tensions in the Middle East.

'The approach therefore has been, and will have to be, to protect citizens, support and understand, safeguard exporters, keep supply chains moving, and maintain economic stability,' she said.

Sitharaman said the Centre reduced central excise duty on petrol and diesel, resulting in a revenue impact of over Rs 1 lakh crore, to reduce logistics costs and shield businesses from rising global crude prices.

She also highlighted customs duty exemptions on key industrial raw materials to support exporters and maintain supply chain stability.

Reaffirming India's economic resilience amid global volatility, Sitharaman urged financial institutions to absorb external shocks and provide small businesses with greater financial support to help them grow. (ANI)