About Fund of Funds Scheme:
- The Fund of Funds for Startups (FFS) Scheme was approved and established in 2016 with a corpus of Rs 10,000 crore,
- Funding to startups: Under FFS, the Scheme does not directly invest in startups, instead provides capital to SEBI-registered AIFs, known as daughter funds, who in turn invest money in growing Indian startups through equity and equity-linked instruments.
- Small Industries Development Bank of India (SIDBI) has been given the mandate of operating this Fund through selection of suitable daughter funds and overseeing the disbursal of committed capital.
- AIFs supported under FFS are required to invest at least 2 times of the amount committed under FFS in startups.
Key facts about the Small Industries Development Bank of India (SIDBI)
- It was established under an Act of Parliament in 1990.
- It is the Principal Financial Institution engaged in the promotion, financing & development of the Micro, Small and Medium Enterprises(MSMEs) sector and the coordination of the functions of the various institutions engaged in similar activities.
- Objective: To offer loans (both direct and indirect) to MSMEs to help in addressing the development and financial gaps in the ecosystem of MSMEs.
- It helps MSMEs in acquiring the funds they require to grow the market, develop and commercialise their technologies and innovative products.
- It was made responsible for administering the Small Industries Development Fund and National Equity Fund.
