SIDBI

• Small Industrial Development Bank of India (SIDBI) is a development financial organization in India, with headquarters in Lucknow and offices around the nation. Its mission is to offer refinancing and short-term loans to industries while also serving as the primary financial institution in the Micro, Small, and Medium Enterprises (MSME) sector. SIDBI also manages the operations of organizations that participate in similar tasks. It was formed on April 2, 1990, by an Act of Parliament. It is based in Lucknow. The Department of Financial Services, Government of India, oversees SIDBI operations.
• SIDBI is one of four All India Financial Institutions controlled and overseen by the Reserve Bank of India, the other three being India Exim Bank, NABARD, and NHB. However, the government recently took control of NHB, acquiring more than 51% of the company. They serve a statutory function in financial markets by extending credit and refinancing operations and meeting the industrial sector’s long-term financing requirements.
• SIDBI is involved in the creation of Micro Finance Institutions via the SIDBI Foundation for Micro Credit and helps to expand microfinance through the Micro Finance Institution (MFI) approach. Its promotion and development program is centered on rural business promotion and entrepreneurship development.
• It runs a refinancing program called Institutional Finance to boost and sustain the money supply to the MSE sector. Under this program, SIDBI provides Term Loans to Banks, Small Finance Banks, and Non-Banking Financial Companies. Aside from refinancing activities, SIDBI also loans directly to MSMEs.
• SIDBI’s biggest individual stakeholder is State Bank of India, which owns 16.73% of the company, followed by the Government of India and Life Insurance Corporation of India.
• SIDBI was tasked with managing the Small Industries Development Fund and the National Equity Fund, which were formerly overseen by IDBI. SIDBI is the primary financial institution that promotes, develops, and finances the MSME (Micro, Small, and Medium Enterprise) sector.
• SIDBI encourages greener manufacturing and energy efficiency in addition to Micro, Small, and Medium Enterprise growth. SIDBI assists MSMEs in obtaining the funding needed to expand, market, develop, and commercialize their technology and innovative goods. The bank offers a variety of plans, as well as financial services and products to fulfill the needs of individuals and enterprises.
• Other Activities
• SIDBI has established many more companies for comparable operations, including:
• SIDBI Venture Capital Limited (SVCL): Provides Venture Capital (VC) support to MSMEs.
• The Micro Units Development & Refinance Agency (MUDRA) aims to fund unfunded micro enterprises in the country, while the Receivable Exchange of India Ltd. (RXIL) helps MSMEs quickly realise receivables. SMERA Ratings Limited (SMERA), now Acuite Ratings & Research Limited, provides credit ratings for MSMEs.
• India SME technological Services Ltd (ISTSL) provides technological consulting and consultation services, whereas India SME Asset Reconstruction Company Ltd. (ISARC) helps resolve Non-Performing Assets (NPAs) in the MSME sector.

Benefits of SIDBI

1. Custom-made

SIDBI policies loans as per the requirements of your businesses. If your requirement doesn’t fall into the ordinary and usual category, Small Industries Development Bank of India would assist funding you in the right way.

1. Dedicated Size

Credit and loans are modified as per the size of the business. So, MSMEs could avail different types of loans custom-made for suiting their business requirement.

1. Attractive Interest Rates

It has a tie-up with several banks and financial institutions world over and could offer concessional interest rates. The SIDBI has tie-ups with World Bank and the Japan International Cooperation Agency.

1. Assistance

It not just give provides a loan, it also offers assistance and much-required advice. It’s relationship managers assist entrepreneurs in making the right decisions and offering assistance till loan process ends.

1. Security Free

Businesspersons could get up to INR 100 lakhs without providing security.

1. Capital Growth

Without tempering the ownership of a company, the entrepreneurs could acquire adequate capital for meeting their growth requirements.

1. Equity and Venture Funding

It has a subsidiary known as SIDBI Venture Capital Limited which is wholly owned that offers growth capital as equity through the venture capital funds which focusses on MSMEs.

1. Subsidies

SIDBI offers various schemes which have concessional interest rates and comfortable terms. SIDBI has an in-depth knowledge and a wider understanding of schemes and loans available and could help enterprises in making the best decision for their businesses.

1. Transparency

Its processes and the rate structure are transparent. There aren’t any hidden charges.

Functions of SIDBI (Small Industries Development Bank of India)

1. Small Industries Development Bank of India refinances loans that are extended by the PLIs to the small-scale industrial units and also offers resources assistance to them
2. It discounts and rediscounts bills
3. It also helps in expanding marketing channels for the products of SSI (Small Scale Industries) sector both in the domestic as well as international markets
4. It offers services like factoring, leasing etc. to the industrial concerns in the small-scale sector
5. It promotes employment-oriented industries particularly in semi-urban areas for creating employment opportunities and thus checking relocation of people to the urban areas
6. It also initiates steps for modernisation and technological up-gradation of current units
7. It also enables the timely flow of credit for working capital as well as term loans to Small Scale Industries in cooperation with commercial banks
8. It also co-promotes state level venture funds

Finance Facilities Offered by SIDBI

Small Industries Development Bank of India, offers the following facilities to its customers:

1. Direct Finance

SIDBI offers Working Capital Assistance, Term Loan Assistance, Foreign Currency Loan, Support against Receivables, equity support, Energy Saving scheme for the MSME sector, etc.

1. Indirect Finance

SIDBI offers indirect assistance by providing Refinance to PLIs (Primary Lending Institutions), comprising of banks, State Level Financial Institutions, etc. with an extensive branch network across the country. The key objective of the refinancing scheme is to raise the resource position of Primary Lending Institutions that would ultimately enable the flow of credit to the MSME sector.

1. Micro Finance

Small Industries Development Bank of India offers microfinance to small businessmen and entrepreneurs for establishing their business.