The Small Industries Development Bank of India (SIDBI) is a financial institution established under an Act of Parliament in 1990. It is a wholly-owned subsidiary of IDBI (Industrial Development Bank of India).
It is the principal financial institution engaged in the promotion, financing, and development of the Micro, Small, and Medium Enterprises (MSME) sector in India.
Some of the key features and functions of SIDBI are:
Promotion and Development: SIDBI focuses on the promotion and development of the MSME sector, which plays a significant role in the Indian economy in terms of employment and exports.
Financial Support: It provides financial support to MSMEs, helping them acquire the funds they require to grow, market, develop, and commercialize their technologies and innovative products.
Tie-ups with International Agencies: SIDBI has tie-ups with the World Bank and the Japan International Cooperation Agency, which further enhances its ability to support the MSME sector.
Advisory Services: It offers assistance and advice to entrepreneurs, helping them make the right decisions and offering assistance in acquiring adequate capital for meeting their growth requirements.
Subsidiaries: SIDBI has subsidiaries such as SIDBI Venture Capital Limited, which offers growth capital to MSMEs.
Cleaner Production and Energy Efficiency: In addition to its focus on the MSME sector, SIDBI also promotes cleaner production and energy efficiency.
Finance Facilities Offered by SIDBI: Small Industries Development Bank of India, offers the following facilities to its customers:
Direct Finance: SIDBI offers Working Capital Assistance, Term Loan Assistance, Foreign Currency Loans, Support against Receivables, equity support, an Energy Saving scheme for the MSME sector, etc. under its various direct finance loan schemes.
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.
Micro Finance: Small Industries Development Bank of India offers microfinance to small businessmen and entrepreneurs for establishing their businesses.
Recent initiatives taken by the Small Industries Development Bank of India (SIDBI) to support MSMEs:
MSME Cluster Development Initiatives: SIDBI has set up a Cluster Development Vertical to attend to cluster development from both soft and hard infrastructure. It has also established the SIDBI Cluster Development Fund (SCDF) with support from the Reserve Bank of India.
Financial Support: SIDBI has undertaken several new initiatives and supported new financial intermediaries to better serve the MSME sector.
Dedicated Funds: SIDBI has introduced dedicated funds such as the Swavalamban Resource Facility, Inclusive MSME Development Fund, Swavalamban Challenge Fund, Swavalamban Divyangjan ATMA Fund, Samridhhi, and Neev Fund to provide financial support to MSMEs.
Trade Facilitation: SIDBI has been focusing on cluster development initiatives for SMEs and has set up a separate Cluster Development Vertical to attend to both soft and hard infrastructure. It has also established the Cluster Development Fund (SCDF) with support from the Reserve Bank of India.
Overall, SIDBI plays a crucial role in the Indian economy by providing financial support and advisory services to the MSME sector, contributing to economic growth, job creation, and technological innovation in the country. The bank has tie-ups with the World Bank and the Japan International Cooperation Agency.
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