SIDBI
Small Industries Development Bank of India
Group Members- MAYANK RAJ
(18SCSE1010336)
SHASHANK SINGH
(18SCSE1010417)
INTRODUCTION
Small Industries Development Bank of India (SIDBI), set up on April 2,
1990 under an Act of Indian Parliament, is the Principal Financial
Institution for the Promotion, Financing and Development of the Micro,
Small and Medium Enterprise (MSME) sector and for Co-ordination of the
functions of the institutions engaged in similar activities.
It was incorporated initially as a wholly owned subsidiary of Industrial
Development Bank of India.
It is an apex body and nodal agency for formulating coordination and
monitoring the policies and programmes for promotion and development of
small scale industries.
AIMS OF SIDBI
Expansion of small scale sector and increase its share in
industrial output.
Development of rural areas where more than 70%of the
population resides.
Increase the efficiency of SSIs.
Increase the contribution of SSIs in export.
More employment generation in rural areas of rural
India.
ROLE OF SIDBI
Direct Financial Assistances
Venture capital/development scheme
Equipment Finance Scheme
Integrated Infrastructural Development Scheme
Project Finance Scheme
Schemes related to Marketing of SSI's Product
ISO 9000 Scheme
Short term & long term loan schemes
Direct Discounting of bill
INDIRECT FINANCE BY SIDBI
Refinance Assistance
a)Composite loan scheme for cottage, Village & tiny Industries
b)Scheme for women entrepreneurs Mahila Udyam Nidhi
c)Scheme for ST/SC & Physically Challenged
Other support through various institutions
a) SFC's, SIDC, SSIDC, Bank to Intermediacies
b) To leasing / hire purchase companies.
c) To factoring companies
d) To special corporate entities and institutions which are
engaged in the business of development of SSIs
FUNCTION
SIDBI refinances loans extended by the primary lending institutions to
small scale industrial units, and also provides resources support to them.
SIDBI discounts and rediscounts bills arising from sale of machinery to or
manufactured by industrial units in the small scale sector.
To expand the channels for marketing the products of Small Scale
Industries (SSI) sector in domestic and international markets.
It provides services like leasing, factoring etc. to industrial concerns in the
small scale sector.
To promote employment oriented industries especially in semi-urban areas
to create more employment opportunities and thereby checking migration
of people to urban areas.
To initiate steps for technological up-gradation and modernisation of
CONT...
SIDBI facilitates timely flow of credit for both term loans and
working capital to SSI in collaboration with commercial banks.
SIDBI Co-Promotes state level venture funds in association with
respective state government.
It grants direct assistance and refinance loans extended by primary
lending institutions for financing exports of products manufactured
by small scale units
SIDBI SUBSIDIARIES
SIDBI provides direct, indirect and micro finance facilities.
Direct Finance: In the form of Term Loan Assistance, Working Capital
Assistance, Support against Receivables, Foreign Currency Loan,
Scheme of Energy Saving for MSME sector, equity support etc.
Indirect Finance: The Indirect assistance in the form of Refinance is
provided to Primary Lending Institutions (PLIs), comprising banks,
State Level Financial Institutions, etc. having a wide network of
branches all over the country. The main objective of Refinance Scheme
is to increase the resource position of PLIs which would ultimately
facilitate the flow of credit to MSME sector.
Micro Finance: SIDBI provides micro finance i.e. credit to small
entrepreneurs and businessmen for establish their business.
Mission: To empower the Micro, Small and Medium
Enterprises (MSME) sector with a view to contributing to the
process of economic growth, employment generation and
balanced regional development.
Vision: To emerge as a single window for meeting the
financial and developmental needs of the small scale sector to
make it strong, vibrant and globally competitive, to position
SIDBI Brand as the preferred and customer - friendly institution
and for
enhancement of share - holder wealth and highest corporate
values through modern technology platform.
PRODUCTS AND SERVICES
Direct finance
Bills finance
Refinance
International finance
Promotional & Development activities.
Technology Upgradation & Modernisation Fund Scheme
{TDMF}
Venture Capital Fund Scheme
Seed Money Schemes
National Equity Fund Scheme
DIRECT FINANCE
Since its beginning, SIDBI had been providing refinance to State Level
Finance Corporations / State Industrial Development Corporations /
Banks etc., against their loans granted to small scale units.
SIDBI’s direct finance schemes are:
Scheme for expansion / diversification of small scale units.
Scheme for specialised marketing agencies.
Scheme for ancilaring / subcontract units.
Scheme for existing Export Oriented Units(EOUs) to enable them to
acquire ISO 9000 series certification.
BILLS FINANCE SCHEMES
Bills Finance Scheme involves provision of medium and
short-term finance for the benefit of the small-scale
sector.
Bills Finance seeks to provide finance, to manufacturers
of indigenous machinery, capital equipment, components
sub-assemblies etc, based on compliance to the various
eligibility criteria, norms etc as applicable to the
respective schemes.
To be eligible under the various bills schemes, one of the
parties to the transactions to the scheme has to be an
industrial unit in the small-scale sector within the
meaning of Section 2(h) of the SIDBI Act, 1989.
REFINANCE SCHEME
Refinance scheme is introduced for catering to the need of
funds of Primary Lending Institutes {PLI} for financing
small scale sector.
Under the scheme, SIDBI grants refinance against term loans
granted by the eligible PLI’s to industrial concerns for setting
up industrial projects in the small scale sector as also for their
expansion / modernization / diversification.
Schemes of re-finance assistance:
Scheme for SC-ST & physically handicraft persons
Composite loan scheme
Equipment refinance schemes.
Schemes for small road transport operators.
Special assistance to ex-servicemen.
INTERNATIONAL FINANCE SCHEMES
The main objective of the various International Finance schemes is to
enable small-scale industries to raise finance at internationally
competitive rates to fulfill their export commitments.
The financial assistance is being offered in US Dollars and Euro
currencies. Assistance in Rupees is also provided to the needy
borrowers.
The international finance is available from pre-shipment & post
shipment credit.
Need based limit, depending on the normal trade terms and credit
period given to overseas buyers by exporters not exceeding 180 days.
PROMOTIONAL AND
DEVELOPMENT ACTIVITIES
As an apex financial institution for promotion, financing and
development of industry in the small scale sector, SIDBI
meets the varied developmental needs of the Indian SSI
sector by its wide-ranging Promotional and Developmental
(P&D) activities.
The activities are as follows:
Entrepreneurship Development Programmes.
Management Development Programmes.
Technology Upgradation Programmes.
TECHNOLOGY UPGRADATION
& MODERNIZATION FUND
SCHEME
This fund was setup in the year 1996 by the SIDBI with an
initial capital of 200 million.
It was setup for the purpose of encouraging the existing
small scale industrial units to modernize production facilities
and adopt improved and updated technology for
strengthening export capabilities.
For availing benefits under this scheme the unit have to
prepare an estimate for modernization & submit it to SIDBI.
The sanction of funds is made depending upon the estimate
submitted.
VENTURE CAPITAL FUND SCHEME
SIDBI is participating in the Venture capital fund set by
public sector institutions as well as private companies to
the extent of Rs,50,00,000 of total capital of the fund
required.
The fund should be dedicated to financing small industry
preferably the most risky one.
SEED MONEY SCHEMES
One of the constraints faced by Entrepreneurs is the lack
of own resources to promote the minimum promoter
contribution.
Hence, SIDBI introduced seed money scheme for the
benefit of entrepreneurs.
Seed money is available through DIC { Direct Industry
Centre } to those entrepreneur who are technically
qualified but lack of own capital.
NATIONAL EQUITY FUND
SCHEME
In order to provide equity type assistance, SIDBI is
operation a National Equity Fund Scheme.
The equity capital loan to the extent of 2.5lakh is
sanctioned to each project provided the protect qualities
under this scheme.
