Small Industries Development Bank of India (Sidbi) has identified 42,000 public call offices (PCO) of about 2.8 lakh units spread in the country as eligible cases for upgradation and plans to give around Rs 300 crore to banks, state finance corporations (SFCs) and others to help these booths, Sidbi managing director Sailendra Narain said.

The average investment required for conversion from an ordinary telephone booth to a cyber cafe with the facilities such as Internet, E-Mail besides regular services like STD/ISD phone facility and fax would be around Rs 2 lakh which could go up to about Rs 5 to 6 lakh, Narain said. He said total requirement of funds for the purpose would be about Rs 850 crore. Keeping in view the debt-equity ratio of 2:1, total need of loans works out to be in the range of Rs 560 crore.

"Assumingthat banks and financial institutions would lend about Rs 250 crore from their own resources, Sidbi plans to disburse around Rs 300 crore," Narain added. Sidbi would give loans to banks, institutions and finance corporations at a rate of 10.5 per cent per annum for an amount upto Rs 2 lakhs and at rate of 12 per cent beyond that, Narain said.

The bank has involved itself in this upgradation business after analysing a proposal submitted by Telecom Industry and Service Association of India (Tisa) for upgradation of PCOs. Initially, about 3,600 PCOs in and around Delhi would be taken up for the job by Delhi Finance Corporation (DFC) selected from a total 18,000 telephone booths running in the National Capital Region (NCR).

Total requirement of funds for upgrading PCOs in the capital would be about Rs 72 crore out of which about Rs 24 crore would be given by Sidbi, Narain said. Till today, about 500 applicants have applied for loans in the Delhi region and 75 cases have already been cleared, he said.

Thebank plans to organise about 25 seminars in the capital and the states to popularise the concept and identify financial institutions to take up the job in various states. It intends to notify eligible institutions so that individual customers could approach these institutions for getting loans, Narain said.