The Small Industries Development Bank of India (SIDBI) has entered a partnership with VFS Capital to provide loans to the MSME sector, the Kolkata-based microfinance institution said.

VFS Capital will extend the MSME loan up to Rs 5 lakh at an interest rate of 13% per annum, a senior corporate official said.

“We have partnered with SIDBI to provide SME and MSME sector loans. VFS Capital expects to disburse Rs 30-40 crore under the scheme this financial year,” said Kuldip Maity, MD and CEO.

He said the loan volume of MFIs is expected to grow to around Rs 1,100-1,200 crore by 2022-23 from Rs 805 crore in the previous financial year.

Maity said the company plans to start operations in Rajasthan by the end of January to expand its footprint in the northwest. Currently, it operates in 13 states, including West Bengal, Assam and Tripura.

VFS Capital also plans to add 35 new branches this financial year, bringing the number of units nationwide to 270. Our target is to raise Rs 100 crore by 2023-24, Maity added.