Announcement of India Borrows Forty Million US Dollars for Small- and Medium-Scale Industry on May 20, 1976

eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 76/56 MAY 20, 1976 INDIA BORROWS $40 MILLION FOR SMALL- AND MEDIUM-SCALE INDUSTRY Development of small- and medium-scale industry in India will be assisted by a World Bank loan of $40 million. The Industrial Development Bank of India (IDBI) wi 11 channel the proceeds to 18 State Financial Corporations for re-lending to small- and medium- scale industries. India has placed considerable emphasis on the promotion of small-scale industry since the mid-1950s as a means of increasing employment, income distribution and regional development. Until • 1973, World Bank financing for industrial investment in India has emphasized medium- and large-scale units either through direct financing or through the Industrial Credit and Investment Corpo- ration of India. However, in view of the importance of small-scale industry, a new project was developed in 1973. The Bank's affiliate, the lflternational Development Association (IDA), extended a credit of $25 mill ion to IDBI for re-lending to small-scale industry. The credit wi 11 be fully utilized by June 1976. The new loan wi 11 continue the objectives of that credit. The Bank loan of $40 million wi 11 finance the foreign exchange requirements of State Financial Corporati0; ..... during the two-year period beginning July 1, 1976. The Bank loan to IDBI is with the guarantee of the Government of India. It will be repaid over 15 years starting after three years of grace. It wi 11 carry interest at the rate of 8!% per annum . • NOTE: Money figures are expressed in U.S. dollar equivalents.