Small Industries Development Bank of India (SIDBI)
The SIDBI was established as a wholly owned subsidiary of Industrial Development Bank of India (IDBI) under a special Act of the Parliament 1988 and started its operations on April 2, 1990. It took over the responsibility of administering Small Industries Development Fund and National Equity Fund which were earlier administered by IDBI. It 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 is managed by a team of 10 Board of Directors. The authorised capital of the Bank is Rs. 1000 crore and the Paid up capital is Rs. 450 crore.
- CREDIT GUARANTEE FUND TRUST FOR MICRO AND SMALL ENTERPRISES (CGTMSE)
- INDIA SME TECHNOLOGY SERVICES LTD. (ISTSL)
- SME RATING AGENCY OF INDIA LTD. (SMERA)
- INDIA SME ASSET RECONSTRUCTION COMPANY LTD
- SIDBI TRUSTEE COMPANY LIMITED (STCL)
- RECEIVABLES EXCHANGE OF INDIA LTD (RXIL)
- SIDBI VENTURE CAPITAL LIMITED (SVCL)
- MICRO UNITS DEVELOPMENT & REFINANCE AGENCY LTD (MUDRA)
Modes of Finance
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.
Functions of SIDBI
- 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 existing units.
- 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.
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