The Small Industries Development Bank of India (SIDBI) focusses primarily on the development of the MSME sector and promotes energy efficiency and cleaner production. The bank has contributed significantly in making India greener and cleaner. The bank helps micro, small and medium enterprises acquire the funds they need in order to grow, develop, market and commercialize their innovative products and technologies. The bank offers varied schemes and also tailors financial products and services to meet the individual's needs of different businesses.
Tailor-made - SIDBI designs loans according to the needs of your enterprise. If your needs do not fall into the usual and ordinary category, SIDBI will help fund you in the right way.
Specialised Size - Loans are altered according to the size of the enterprise. So micro, small and medium enterprises can get different loans tailored to suit their business.
Attractive Rates - SIDBI has a tie-up with many banks and international financial institutions and can get concessional rates of interest. The tie-ups include KfW, World Bank and Japan International Cooperation Agency.
Assistance - SIDBI doesn’t just give you a loan, it also gives your assistance and much needed advice. Relationship managers help entrepreneurs make the right decisions and provide assistance till the end of the loan process.
Collateral Free - Entrepreneurs can get up to Rs. 100 lakhs without offering collateral. This is done through the establishment of a Trust called Fund Trust for Micro and Small Enterprises (CGTMSE).
Risk and Growth Capital - Without diluting the ownership of the company, entrepreneurs can acquire sufficient capital to meet growth requirements.
Venture and Equity Funding - SIDBI has a wholly owned subsidiary called SIDBI Venture Capital Limited that can provide growth capital in the form of equity through venture capital funds that are focussed on MSMEs.
Government Subsidies - Take advantage of various schemes that have concessional rates and relaxed terms offered by the Government. SIDBI has a wider understanding and in-depth knowledge of loans and schemes available and can help you make the best decision for your company.
Transparency - The process and rate structure is transparent. There are no hidden charges.
SIDBI offers a loan facilitation and syndication service through partnerships with banks, accredited consultants and rating agencies. SIDBI helps existing manufacturing and service sector units get loans from banks through a structured mechanism. The process is transparent and strives for timely loan sanction or consideration of these loan applications. This initiative helps business avoid delays in the loan application process. It enhances the flow of financial assistance to the MSME sector.
The accredited consultants provide a number of useful services for the purpose of loans.
To process a loan through SIDBI, the entrepreneur will have to go through the following process.
Step 1: Accredited consultants empanelled with SIDBI will prepare the documents required. Based on the information and requirements indicated by the MSMEs, the ACs will draft a Basic Information Memorandum (BIM). This document will contain all information relevant to the banks and rating agencies.
Step 2: The BIM is approved by the MSME entrepreneur. The ACs will then submit the BIM to SIDBI.
Step 3: If needed, the proposal will be rated by a rating agency approved by the RBI.
Step 4: SIDBI will directly handle the following cases:
Step 5: For any other case, the loan application will be submitted to Public Sector Banks. SIDBI has a memorandum of understanding (MOU) with public sector banks for the purpose of loans.
SIDBI will assist the entrepreneur through every stage till the loan is processed. MSMEs have a much better chance of getting their loan sanctioned in time and can avoid unnecessary delays.
These schemes are aimed at helping companies and manufacturers who deal with saving energy, facilitating cleaner production and the like. These schemes strive to provide attractive rates of interest to encourage energy saving projects. Companies can reduce their energy costs and enhance their profit. The schemes help achieve waste reduction, control pollution, recover valuable by-products during production and participate in sustainable growth.
Purpose
Funding
The schemes are funded in the following ways:
Usage
The financing received through these schemes are intended for the following use:
Eligibility
Schemes
The aim of this project is to encourage and improve energy efficiency through commercial investments. The target of this scheme is the small and medium enterprises that invest and deal with energy efficiency goods and services that help reduce greenhouse gases. MSMEs can apply for finance under such grants by submitting an application to SIDBI with a brief about the business and requirements.
Under this initiative, World Bank and Global Environment Facility (GEF) are helping MSME clusters in India through SIDBI and the Bureau of Energy Efficiency (BEE) to reduce greenhouse gases and improve energy efficiency through better financing. On September 13th, 2010, the grant agreement was signed and was effected on 28th October, 2010. SIDBI was granted $9.05 million under this grant to be utilized over a period of four years. GEF also granted $2.25 million to BEE to be utilized for the implementation of energy efficiency in MSMEs in India.
Project Management
SIDBI set up a Project Management Unit at New Delhi to coordinate the disbursement of the grant to the target group which consists of five energy intensive clusters.
Activities under the grant
SIDBI played a major role in this project providing the following services.
Growth Capital & Equity Assistance
SIDBI helps existing small and medium business meet their needs for capital in order to grow.
Under this scheme, SIDBI provides assistance in form of mezzanine or convertible instruments, subordinated debt and equity to deserving enterprises.
Objectives
Benefits
Security
For debt-based instruments, SIDBI requires the following security to be provided when applying for finance under this scheme.
Eligibility
Many MSMEs face the problem of delayed payments for the credit sales made to larger purchaser companies. SIDBI recognises the problems that can arise out of this situation for the MSME and how it can significantly affect the financial health of the company. Therefore, it devised a scheme under which these companies can acquire finance against the bills or invoices that the MSME holds against the credit purchase made by the purchaser company.
Objectives
To help MSMEs maintain their financial health which depends greatly on how quickly their receivables are realised. This scheme helps reduce the issues suppliers face with receivables belonging to MSMEs. It aims to help them improve their liquidity and cash flow. The scheme’s objectives are to help the MSMEs in the following activities.
Usage of Funds
Eligibility
There is a need for constant upgrading when dealing with technology. Companies need to modernize and upgrade their technological processes to stay on par with the current conditions. Companies also need to expand their capacity every now and then. SIDBI plays an important role in these situations to help companies meet their financial needs. SIDBI has been marked as a Nodal Agency to help in assisting and monitoring the interface and coordination with banks, financial institutions and the Government.
Schemes
Under this scheme, SIDBI provides financial assistance to MSMEs who want to invest in development and upscaling. It also helps out in the demonstration of innovative technology based projects and the need for commercialization.
Funding
SIDBI provides assistance in the form of early stage “debt” funding. The terms are relaxed to help the MSME in developing, demonstrating and commercializing new innovations. The scheme supports emerging technology, new products, unproven technology and new processes that have not been commercialized yet. Assistance granted is usually 80% of the cost of the project. The maximum funding granted per project is Rs. 100 lakhs. It could exceed this limit in special cases based on the innovative factor of the project.
Process
Usage of funds
Interest Rate
The Project Approval Committee is in charge of approving the interest rate granted under this scheme. The interest rate offered does not exceed 5% per annum.
Other Charges
An upfront fee of 0.5% of the sanctioned amount + taxes is charged.
Repayment
The loan should be repaid within 6 years from the date of project completion. This 6-year period includes the moratorium period granted. In special cases, this period can be extended.
Security
Eligibility
New and existing MSME units are eligible to apply for finance under this scheme.
SIDBI has a lot to offer to MSMEs and has been identified as a Nodal Agency when it comes to Government Schemes for this sector. Enterprises can secure finance more conveniently. SIDBI will provide assistance to go about it the right way and get the most which will benefit the company and ultimately benefit the country.
A GST rate of 18% will be applicable on banking services and products from 01 July, 2017.
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Yes Bank and Small Industries Development Bank of India (SIDBI) has recently drafted a memorandum of understanding (MoU) that will help channel the right financing solution to the micro, small, and medium enterprise (MSME) industry. As per the agreement, Yes Bank will act as the preferred lender when it comes to offering loans to the MSME customers of SIDBI. The Chairman and Managing Director of SIDBI, Mohammad Mustafa, stated that this partnership is expected to help the MSME industry get access to the right financing product whenever they need with the help of efficient service and cutting-edge technology offered by Yes Bank. These MSME borrowers will also be able to avail various banking services offered by Yes Bank such as current accounts, cash management services (CMS), digital banking across different channels, etc. This move aims to help the MSME sector grow and become a globally competitive industry.
13 June 2018
Small Industries Development Bank of India (SIDBI) has decided to help with the growth of micro enterprises in 115 districts far and wide across the country. To this end, the bank has proposed to run a micro enterprises promotion program (MEPP) in the backward districts of the country in collaboration with Common Service Centre (CSC). These districts were chosen from all states by the Prime Minister, Mr. Narendra Modi, under the ‘Transformation of Aspirational Districts’ Program launched on 5 January 2018.
Under MEPP, the parameters will be implemented by the Prabhari officers, i.e. the District Magistrates of the selected areas, while additional secretaries of the Central Government are designated to assist them. This program has been launched to promote potential rural entrepreneurs while helping them secure a financial tie-up with the banking sector. Since its introduction, MEPP has facilitated over 41,500 enterprises along with generating employment opportunities for approximately 1.07 lakh underprivileged individuals.
20 April 2018
The Small Industries Development Bank of India (SIDBI) recently released its virtual assistant known as Samridhhi, which can be accessed on the bank’s universal loan portal. The virtual assistant has been launched to clarify doubts or questions that loan applicants may have. SIDBI also released a ‘bankability kit’ by collaborating with IDBI Bank and Bank of Baroda. This particular facility intends to provide financial literacy to salaried applicants as well as entrepreneurs. SIDBI commemorated its foundation day recently with the chairman of the organisation introducing a new set of programmes and projects.
16 April 2018
Corporatedge, a Gurgaon-based company that offers serviced office infrastructure for a wide range of organisations, aims to expand its operations at more than 6 locations across the length and breadth of India. To this end, the company has received funds of an undisclosed amount from SIDBI - the venture capital arm of the Small Industries Development Bank of India. SIDBI has invested in multiple startups along with the Rs 10,000 crore worth of funds that has aided various capital funds that are invested in startups.
Corporatedge has left its mark in the Business Center industry with its serviced offices, coworking spaces, meeting rooms, and virtual offices at premier locations in Gurgaon. In 2013, the company introduced its first center complete with 40 office suites and 178 workstations covering an area of 16,000 sq. ft. at DLF Cyber City in Gurgaon. Thereafter, the company launched another business center in 2016 with 60 suites and 280 workstations at DLF Two Horizon spread across 25,000 sq. ft.
22 January 2018
IDBI Bank, leading public sector bank, looked out for bids in order to sell 13.71% stake in Small Industries Development Bank of India (SIDBI). The bank has found a buyer for the outstanding 2.54% that it owns in SIDBI. In the month of August, the bank had asked SBI Capital Markets (SBI Caps) to search for a buyer for its stake of 16.25%. However, the bank had to stretch the submission deadline since there were not too many investors who were interested in this stake. The bank has to take care of a few more formalities in order to sell the remaining stake in the upcoming round of sales.
8 September 2017
“Make in India Soft Loan Fund” was recently launched by the Small Industries Development Bank of India to help micro business units to take part in “Make in India” initiative. Anil Kulkarni, General Manager of SIDBI, stated that going forward entrepreneurs will be provided with loans in nature of term loan and quasi equity, encouraging them to set up new units. This initiative also provide funds for existing units for technical upgradation and expansion purposes. Reserve Bank of India has come up with a corpus of Rs. 10, 000 crore that will be distributed as soft loans. A presentation on interest rates on the loan was presented by PK Nath, Deputy General Manager of SIDBI, stated that the interest rate for the soft loans will range from 9.15% to 9.35% and the interest rate for term loan varies from 9.45% to 9.95%.
29 August 2017
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Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.
