Small Industries Development Bank of India (SIDBI)

The Small Industries Development Bank of India (SIDBI) is a financial institution that was established on April 2, 1990, under an Act of the Indian Parliament. It was set up with the aim of promoting and developing small-scale industries in the country.

SIDBI’s main objective is to facilitate the growth and development of micro, small, and medium-sized enterprises (MSMEs) in India. The bank provides various financial and non-financial services to MSMEs, including term loans, working capital finance, bill discounting, and equipment finance, among others.

In addition to providing financial assistance, SIDBI also helps MSMEs in other ways, such as providing training and counseling, promoting technology upgradation, and encouraging entrepreneurship.

SIDBI is a wholly-owned subsidiary of the Reserve Bank of India (RBI) and has its headquarters in Lucknow, Uttar Pradesh. The bank operates through a network of branches and regional offices across the country. It also has tie-ups with various state governments, financial institutions, and other organizations to promote MSME development.

Working:

• Providing Financial Assistance: SIDBI provides various financial products and services to MSMEs, such as loans, working capital finance, equipment finance, and bill discounting, among others. The bank also provides support to startups and early-stage ventures through various schemes.
• Promoting Innovation and Technology Adoption: SIDBI facilitates the promotion and adoption of new technologies in the MSME sector. The bank also provides equity support to MSMEs through various schemes, including the SIDBI Venture Capital Limited.
• Supporting Entrepreneurship: SIDBI supports the creation of new MSMEs and the expansion of existing ones. The bank provides training and counseling services to MSMEs to enhance their skills and capabilities.
• Developing Linkages: SIDBI develops linkages between MSMEs and other institutions such as banks, financial institutions, and state governments. The bank also promotes sustainable development and environmental conservation in the MSME sector.
• Monitoring and Evaluation: SIDBI continuously monitors and evaluates the performance of its schemes and programs to ensure that they are meeting their objectives. The bank also provides feedback to MSMEs and other stakeholders to improve the effectiveness of its interventions.

Objectives:

• To facilitate the development and growth of micro, small, and medium-sized enterprises (MSMEs) in India.
• To provide financial assistance to MSMEs for various purposes, including term loans, working capital finance, and equipment finance, among others.
• To promote entrepreneurship and innovation in the MSME sector.
• To provide non-financial services, such as training and counseling, to MSMEs to help them enhance their skills and capabilities.

Functions:

• Providing various financial products and services to MSMEs, such as loans, working capital finance, and bill discounting, among others.
• Providing financial assistance to startups and early-stage ventures through various schemes.
• Facilitating the promotion and adoption of new technologies in the MSME sector.
• Providing equity support to MSMEs through various schemes, including the SIDBI Venture Capital Limited.
• Providing support for the creation of new MSMEs and the expansion of existing ones.
• Promoting sustainable development and environmental conservation in the MSME sector.
• Developing linkages between MSMEs and other institutions such as banks, financial institutions, and state governments.
• Providing training and counseling services to MSMEs to enhance their skills and capabilities.

Here are some of the key schemes launched by SIDBI:

SIDBI Make in India Soft Loan Fund for MSMEs (SMILE): This scheme provides soft loans to micro, small and medium enterprises (MSMEs) in the manufacturing and services sectors for the purpose of modernization, upgradation, and expansion. The loans are provided at a concessional rate of interest with a long repayment period.

SIDBI Stand-Up India Scheme: This scheme was launched to promote entrepreneurship among women, Scheduled Castes (SCs) and Scheduled Tribes (STs). Under this scheme, loans are provided to eligible individuals for starting a new enterprise in manufacturing, trading, or services sector. The loans can be up to Rs. 1 crore and collateral-free.

SIDBI Swavalamban Crisis Responsive Fund: This scheme provides support to micro and small enterprises affected by natural calamities, such as floods, earthquakes, and droughts. The fund provides working capital support and loan restructuring to affected MSMEs.

SIDBI Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): This scheme provides collateral-free credit to MSMEs. The scheme covers credit facilities up to Rs. 2 crore without any collateral security or third-party guarantee. The loans are provided by member lending institutions, and the CGTMSE provides a guarantee cover of up to 75% of the credit facility.

SIDBI Swavalamban Health Insurance Scheme: This scheme provides health insurance cover to entrepreneurs and their family members. The scheme covers medical expenses for hospitalization due to illness or accident, and provides coverage for pre-existing conditions after a waiting period of one year.

SIDBI Startup Mitra: This scheme provides hand-holding support to startup entrepreneurs. Under this scheme, SIDBI provides assistance in areas such as market research, business planning, legal and financial services, and mentorship.