New Delhi, Aug. 26 -- SIDBI and Regional Rural Banks (RRBs) are set to expand their co-lending arrangement to improve access to credit for micro, small and medium enterprises (MSMEs) in rural and semi-urban areas, with the government stressing the need to leverage the banks' wider reach and SIDBI's expertise in MSME lending.

The proposed expansion was discussed at a conclave of the heads of all 28 RRBs organised by SIDBI in New Delhi and chaired by Department of Financial Services Secretary Sanjay Lohiya.

The arrangement is aimed at combining SIDBI's understanding of MSME credit requirements with the extensive network of RRBs across smaller towns and villages. The government said the model could help RRBs diversify their loan portfolios...