Small Industries Development Bank of India

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Small Industries Development Bank of India (SIDBI)
SIDBI LOGO.png
Agency overview
Formed2 April 1990;34 years ago (1990-04-02)
Type Regulatory Body
Jurisdiction Ministry of Finance , Government of India
Headquarters Lucknow, Uttar Pradesh, India
Agency executive
Website www.sidbi.in

Small Industries Development Bank of India (SIDBI) is the apex regulatory body for overall licensing and regulation of micro, small and medium enterprise finance companies in India. It is under the jurisdiction of Ministry of Finance , Government of India headquartered at Lucknow and having its offices all over the country.The SIDBI was established on April 2, 1990, by Government of India, as a wholly owned subsidiary of IDBI Bank . It was delinked from IDBI w.e.f. March 27, 2000. Its purpose is to provide refinance facilities to banks and financial institutions and engage in term lending and working capital finance to industries, and serves as the principal financial institution in the Micro, Small and Medium Enterprises (MSME) sector. SIDBI also coordinates the functions of institutions engaged in similar activities. It was established in 1990, [2] through an Act of Parliament. [3]

Contents

SIDBI is one of the five All India Financial Institutions regulated and supervised by the Reserve Bank of India; other four are Exim Bank Of India, NABARD,NABFID and NHB. But recently NHB came under government control by taking more than 51% stake. They play a statutory role in the financial markets through credit extension and refinancing operation activities and cater to the long-term financing needs of the industrial sector. [4]

SIDBI is active in the development of Micro Finance Institutions through SIDBI Foundation for Micro Credit, and assists in extending microfinance through the Micro Finance Institution (MFI) route. [5] Its promotion & development program focuses on rural enterprises promotion and entrepreneurship development. [6] [7]

In order to increase and support money supply to the MSE sector, it operates a refinance program known as Institutional Finance program. Under this program, SIDBI extends Term Loan assistance to Banks, Small Finance Banks and Non-Banking Financial Companies. Besides the refinance operations, SIDBI also lends directly to MSMEs. [8] [9]

Non-Financial Intervention

As part of non-financial intervention in the MSME sector, SIDBI had also undertaken various measures in the past. Recently, in association with credit rating agency CRISIL and Credit Information Company TransUnion CIBIL it has introduced "CriSidEx" and "MSME Pulse". [10]

CriSidEx, India's first sentiment index for micro and small enterprises (MSEs) has been developed jointly by CRISIL & SIDBI. It is a composite index based on a diffusion index of 8 parameters and measures MSE business sentiment on a scale of 0 (extremely negative) to 200 (extremely positive). The crucial benefit of CriSidEx is that its readings will flag potential headwinds and changes in production cycles and thus help improve market efficiencies. And by capturing the sentiment of exporters and importers, it will also offer actionable indicators on foreign trade. [11] [12]

SIDBI in association with TransUnion CIBIL launched "MSME Pulse" and Microfinance Pulse launched by Equifax, a quarterly report on MSME credit activity, for closely tracking and monitoring the MSME segment in the country. The report is based on a study done on over five million active MSMEs who have access to formal credit, with live credit facilities in the Indian banking system. [13]

SIDBI has launched the ‘Udyami Mitra’ Portal to improve accessibility of credit and handholding services to MSMEs. They can select and apply for preferred banks through this portal. Under the portal entrepreneurs can apply for loan without physically visiting any bank branches and can select from over 1 lakh bank branches, track their application status and avail multiple loan benefits. It also has facility for uploading all necessary documents. Through the portal the MSMEs can also seek handholding support for getting finance. [14] [15] SIDBI has also entered into an arrangement with CSC e-governance Services (CSCeGS) to take Udyami Mitra portal to the unserved and the underserved MSMEs. CSCeGS is a special purpose vehicle (SPV) set up by ministry of electronics and IT (MeitY) which acts as connect point for various digitally aligned services to villages in the country. [16]

In May 2024, The Small Industries Development Bank of India (SIDBI) signed a MoU with Airbus Helicopters to finance civil helicopter purchases in India. [17] [18]

Other activities

SIDBI has floated several other entities for related activities, including:

SIDBI supports the Government of India in its initiatives and work as a nodal agency for some of the schemes related to development of MSMEs, such as Make in India and Startup India.

Related Research Articles

Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel and revenue numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the World Bank, the OECD, European Union, the United Nations, and the World Trade Organization (WTO).

<span class="mw-page-title-main">ICICI Bank</span> Indian private sector bank

ICICI Bank Limited is an Indian multinational bank and financial services company headquartered in Mumbai with a registered office in Vadodara. It offers a wide range of banking and financial services for corporate and retail customers through various delivery channels and specialized subsidiaries in the areas of investment banking, life, non-life insurance, venture capital and asset management.

<span class="mw-page-title-main">CRISIL</span> Indian company providing analytical services

CRISIL Limited, formerly Credit Rating Information Services of India Limited, is an Indian analytical company providing ratings, research, and risk and policy advisory services and is a subsidiary of American company S&P Global.

The IDBI Bank Limited is a Scheduled Commercial Bank under the ownership of Life Insurance Corporation of India (LIC) and Government of India. It was established by Government of India as a wholly owned subsidiary of Reserve Bank of India in 1964 as Industrial Development Bank of India, a Development Finance Institution, which provided financial services to industrial sector. In 2005, the institution was merged with its subsidiary commercial division, IDBI Bank, and was categorised as "Other Development Finance Institution" category. Later in March 2019, Government of India asked LIC to infuse capital in the bank due to high NPA and capital adequacy issues and also asked LIC to manage the bank to meet the regulatory norms. Consequent upon LIC acquiring 51% of the total paid-up equity share capital, the bank was categorised as a 'Private Sector Bank' for regulatory purposes by Reserve Bank of India with effect from 21 January 2019. IDBI was put under Prompt Corrective Action of the Reserve Bank of India and on 10 March 2021 IDBI came out of the same. At present direct and indirect shareholding of Government of India in IDBI Bank is approximately 95%, which Government of India (GoI) vide its communication F.No. 8/2/2019-BO-II dated 17 December 2019, has clarified and directed all Central/State Government departments to consider IDBI Bank for allocation of Government Business. Many national institutes find their roots in IDBI like SIDBI, EXIM, National Stock Exchange of India, SEBI, National Securities Depository Limited. Presently, IDBI Bank is one of the largest Commercial Banks in India.

Friends of Women's World Banking, India, often shortened to Friends of WWB, India, or just FWWB, is an Indian APEX organization that assists microfinance and microenterprise organizations. Founded in 1982 by Ela Bhatt, it is located in Ahmedabad, Gujarat, India.

<span class="mw-page-title-main">Ministry of Micro, Small and Medium Enterprises</span> Government of India Ministry

The Ministry of Micro, Small and Medium Enterprises is the ministry in the Government of India. It is the apex executive body for the formulation and administration of rules, regulations and laws relating to micro, small and medium enterprises in India. The Minister of Micro, Small and Medium Enterprises is Jitan Ram Manjhi.

TransUnion CIBIL Limited is a credit information company operating in India. It maintains credit files on 600 million individuals and 32 million businesses. TransUnion is one of four credit bureaus operating in India and is part of TransUnion, an American multinational group.

All India Financial Institutions (AIFI) is a group composed of financial regulatory bodies that play a pivotal role in the financial markets. Also known as "financial instruments", the financial institutions assist in the proper allocation of resources, sourcing from businesses that have a surplus and distributing to others who have deficits - this also assists with ensuring the continued circulation of money in the economy. Possibly of greatest significance, the financial institutions act as an intermediary between borrowers and final lenders, providing safety and liquidity. This process subsequently ensures earnings on the investments and savings involved. In Post-Independence India, people were encouraged to increase savings, a tactic intended to provide funds for investment by the Indian government. However, there was a huge gap between the supply of savings and demand for the investment opportunities in the country.

SMERA, widely known as ‘The SME Rating Agency’, is a credit rating agency in India that provides credit ratings primarily of small and medium-sized enterprises.

The SIDBI foundation for Microcredit (SFMC) is an Indian financial division that provides bulk loans to microfinance institutions (MFIs) in India. It is a division of Indian governments Small Industries Development Bank of India (SIDBI). In practice, it acts as an oversight over MFIs which are the intermediaries between the retail borrowers consisting of poor people and individual borrowers living in rural areas or urban slums and the public sector development finance institutions.

Priority sector lending is lending to those sectors of the economy which may not otherwise receive timely and adequate credit. This role is assigned by the Reserve Bank of India to the banks for providing a specified portion of the bank lending to few specific sectors like agriculture and allied activities, micro- and small enterprises, education, housing for the poor, and other low-income groups and weaker sections. This is essentially meant for an all-round development of the economy as opposed to focusing only on the financial sector.

<span class="mw-page-title-main">National Small Industries Corporation</span> Government of India Enterprise to promote and aid small companies (Founded 1955)

National Small Industries Corporation Limited (NSIC) is a Mini Ratna government agency established by the Ministry of Micro, Small and Medium Enterprises, Government of India in 1955 It falls under Ministry of Micro, Small & Medium Enterprises of India. NSIC is the nodal office for several schemes of Ministry of MSME such as Performance & Credit Rating, Single Point Registration, MSME Databank, National SC ST Hub, etc.

<span class="mw-page-title-main">Sankar Chakraborti</span> An expert in credit ratings, ESG assessments and Indias MSME sector

Sankar Chakraborti is the Group Chief Executive Officer of Acuité Ratings & Research Limited, a credit rating agency, accredited by Reserve Bank of India as an External Credit Assessment Institution under New Capital Adequacy Framework, and registered with Securities and Exchange Board of India,. He is also the Chairman of SMERA Ratings Private Limited, and Chairman of ESG Risk Assessments & Insights Limited, India's first ESG Rating Agency.

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Dr. Sailendra Narain is a development finance specialist born in Nawadah, Bihar Province, India. For over 40 years, Narain has been a pioneer in developing the global SME sector. His specialities include: designing policy frameworks for SME Growth, establishing SME financing programs in banking and development financial institutions, and capacity building for SMEs with a focus on Entrepreneurship.

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References

  1. ↑ . Accessed December 2020.
  2. ↑ The Small Industries Development Bank of India act. 1989 Archived 2021-10-28 at the Wayback Machine
  3. ↑ "Small Industries Development Bank of India(SIDBI) | Department of Financial Services | Ministry of Finance | Government of India". Financialservices.gov.in. Retrieved 14 October 2018.
  4. ↑ "Reserve Bank of India - Publications". Rbi.org.in. Retrieved 14 October 2018.
  5. ↑ "IDFC". www.idfc.org.
  6. ↑ "SIDBI's Financial Inclusion Program covers 'Poorest of the Poor' - ADFIAP".
  7. ↑ "Poorest States Inclusive Growth Programme - SIDBI UKAID DFID RFP". indiamicrofinance.com. 5 November 2022.
  8. ↑ "Establishment of Fund of Funds for funding support to Start-ups". pib.nic.in.
  9. ↑ "Shareholding :: Small Industries Development Bank of India". www.sidbi.in.
  10. ↑ "Fixed Deposits, MSME borrowing becomes easier in Indian Overseas Bank; here's how". Zee Business. 7 April 2018. Retrieved 17 March 2023.
  11. ↑ Gupta, Komal (3 February 2018). "Jaitley launches CriSidEx, says economy witnessing a phase of consolidation".
  12. ↑ "CRISIL, SIDBI Launch India's First MSE Sentiment Index". pib.nic.in.
  13. ↑ "MSME's most attractive segment in commercial credit with fastest growth, low NPAs: Report". The Economic Times. 12 March 2018.
  14. ↑ "Udyami Mitra Portal".
  15. ↑ Network, Knn India - Knowledge & News. "SIDBI launches 'Udyami Mitra' portal to improve accessibility of credit for MSMEs". knnindia.co.in.
  16. ↑ "Sidbi, CSC partner to offer MSMEs better credit access". Press Trust of India. 6 March 2018 – via Business Standard.
  17. ↑ "SIDBI Takes Flight: Signs MoU with Airbus Helicopters to Finance Civil Aviation in India". Bru Times News.
  18. ↑ "Airbus Helicopters and SIDBI sign an MoU for helicopter financing in India". The Times of India. 24 May 2024.
  19. 1 2 3 4 "Small Industries Development Bank of India(SIDBI) | Department of Financial Services | Ministry of Finance | Government of India". financialservices.gov.in. Retrieved 17 February 2018.
  20. ↑ "Guidelines for setting up of and operating the Trade Receivables Discounting System (TReDS)" (PDF). Guidelines for Setting up of and Operating the Trade Receivables Discounting System (TReDS).
  21. ↑ "Acuité Ratings & Research". www.acuite.in.
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