Bank of Baroda & SIDBI Sign MoU for "bob MSE-GIFT": Green Loans with 2% Interest Subvention

New Delhi, March 17, 2026: In a significant move to accelerate sustainable development in the micro and small enterprise sector, Bank of Baroda (Bank of Baroda) and the Small Industries Development Bank of India (SIDBI) have signed a Memorandum of Understanding (MoU) to introduce a dedicated green finance product.

The MoU, signed on February 27, 2026, in New Delhi, paves the way for the launch of "bob MSE-GIFT" (Green Investment and Financing for Transformation) . This initiative will operate under Bank of Baroda’s Green and Sustainable product category, aiming to provide financial muscle to MSEs committed to environmental responsibility.

The agreement was formalized by Shri Madhur Kumar, Chief General Manager, MSME Banking, Co-Lending and SCF, Bank of Baroda; and Shri Satyaki Rastogi, Chief General Manager – Green Climate Finance Vertical, SIDBI.

Driving Green Technology Adoption in MSMEs

The core objective of the bob MSE-GIFT scheme is to support Micro and Small Enterprises in their journey toward sustainability. By facilitating the adoption of green technologies and clean energy solutions, the initiative will help businesses achieve:

Long-term sustainability through process and technology upgradation.
Regulatory Compliance: Easier adherence to Extended Producer Responsibility (EPR) norms and waste recycling mandates.

Attractive Loan Terms to Ease the Green Transition

Understanding the capital constraints often faced by smaller enterprises, the bob MSE-GIFT scheme offers a highly attractive financial structure designed to lower the barrier to entry for green investments:

100% Collateral-Free Loans: All loans extended under this MoU will be covered under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), eliminating the need for collateral.
High Loan Ceiling: MSEs can avail term loans of up to ₹2 crore for their green projects.
Significant Interest Subvention: To make financing affordable, the scheme includes an interest subvention of 2% per annum.
Long Repayment Tenure: The interest benefit will be applicable for a maximum period of 5 years, providing ample cushion for businesses to stabilize their upgraded operations.

This collaboration between Bank of Baroda and SIDBI is expected to unlock significant green finance flows into the MSE sector, fostering a culture of innovation and environmental stewardship at the grassroots level of the Indian economy.