The Small Industries Development Bank of India (SIDBI) is India's apex regulatory organization for licensing and regulating micro, small, and medium enterprise finance firms.
It is governed by the Ministry of Finance of the Government of India, which is headquartered in Lucknow and has offices all around the country.
Its mission is to provide refinance facilities to banks and financial organizations, as well as engage in term lending and working capital finance to industries, and it serves as the MSME sector's primary financial institution.
SIDBI – is led by Shri Sivasubramanian Ramann as Chairman and Managing Director.
SIDBI was given the task of administering the Small Industries Development Fund and the National Equity Fund, which were formerly overseen by IDBI.
SIDBI is the primary financial institution for the MSME (Micro, Small, and Medium Enterprise) sector’s promotion, development, and financing. SIDBI encourages cleaner production and energy efficiency in addition to focusing on the development of the Micro, Small, and Medium Enterprise sector.
SIDBI assists MSMEs in obtaining the funding they need to expand, market, develop, and commercialize their innovative products and technology. The bank offers a variety of programs as well as financial services and products to satisfy the needs of individuals and businesses.
Small Industries Development Bank of India (SIDBI) is an autonomous financial institution dedicated to assisting the growth and development of Micro, Small, and Medium Enterprises (MSMEs), which make important contributions to the national economy in terms of output, employment, and exports.
SIDBI was founded with the goal of facilitating and increasing the flow of credit to Micro, Small, and Medium Enterprises, as well as solving developmental and financial gaps in the MSMEs ecosystem
It was formed by an Act of Parliament on April 2, 1990
Finance facilities offered by SIDBI
Customers of the SIDBI can take advantage of the following services:
Direct Finance Under its different direct finance credit programs, SIDBI provides Working Capital Assistance, Term Loan Assistance, Foreign Currency Loan, Support against Receivables, equity support, and an Energy Saving Scheme for the MSME sector, among others.
Indirect Finance SIDBI provides indirect aid by refinancing PLIs (Primary Lending Institutions), which include banks, State Level Financial Institutions, and other financial institutions with a large branch network throughout the country. The refinancing scheme’s main goal is to improve Primary Lending Institutions’ resource position, allowing credit to flow to the MSME sector in the long run.
Micro Finance The SIDBI provides microfinance to small business owners and entrepreneurs.
Functions of SIDBI
SIDBI refinances loans made by PLIs to small-scale industrial enterprises and provides them with resources
Bills are discounted and rediscounted by it
It also aids in the expansion of marketing channels for SSI (Small Scale Industries) sector products in both domestic and foreign markets
It provides factoring, leasing, and other services to small-scale industrial businesses
It encourages employment-oriented industries, particularly in semi-urban areas, in order to create jobs and prevent people from moving to cities
It also makes attempts to modernize and upgrade current units technologically
In collaboration with commercial banks, it also ensures the timely flow of credit for working capital as well as term loans to Small Scale Industries
It also works with state-level venture funds to promote them
Non-Financial Interventions
SIDBI had previously adopted numerous non-financial measures in the MSME sector as part of its non-financial intervention. It recently launched “CriSidEx” and “MSME Pulse” in collaboration with credit rating agency CRISIL and credit information company TransUnion CIBIL.
CRISIL and SIDBI collaborated to create CriSidEx, India’s first sentiment index for micro and small businesses (MSEs). It is a composite index that represents MSE business sentiment on a scale of 0 to 200 and is based on an 8-parameter diffusion index. CriSidEx’s most important benefit is that its readings will alert you to prospective headwinds and changes in production cycles, allowing you to increase market efficiency. It would also provide actionable indicators on foreign trade by recording the sentiment of exporters and importers.
SIDBI, in collaboration with TransUnion CIBIL, launched “MSME Pulse” and Equifax launched Microfinance Pulse, a quarterly report on MSME credit activities, to track and monitor the MSME segment in the country. The research is based on a survey of more than five million active MSMEs in India who have access to formal credit and live credit facilities through the banking system.
SIDBI has launched the “Udyami Mitra” Portal to make loans and handholding services more accessible to MSMEs. Through this portal, they can choose and apply for preferred banks. Entrepreneurs can use the portal to apply for a loan without having to physically visit a bank branch. They can choose from over 1 lakh bank branches, follow their application status, and take advantage of a variety of lending incentives. It also allows you to upload all of your relevant paperwork. MSMEs can also seek assistance in obtaining financing through the portal. SIDBI has also reached an agreement with CSC e-governance Services (CSCeGS) to bring the Udyami Mitra portal to MSMEs who are unserved or underserved. CSCeGS is a special purpose vehicle (SPV) established by the Ministry of Electronics and Information Technology to connect villages around the country to various digitally aligned services.
SIDBI’s major goal is to give financial support to all SSIs in India via SFCs and SSIDCs.
SIDBI’s goal is to promote India’s industrial development by focusing on small-scale industries rather than large-scale industries.
SIDBI’s profits are funneled into reserves to the utmost extent possible. It has greater borrowed capital; therefore, a big amount of income is used to pay long-term securities interest.
SIDBI’s activities, as they have grown over time, currently satisfy practically all of the needs of small-scale companies, which span a broad range from modern and technologically advanced units on one end to traditional units on the other.
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