The term SIDBI stands for Small Industries Development Bank of India. It is an apex financial institution to support small, mid-sized businesses in India. SIDBI is a wholly owned subsidiary of IDBI, is geared for helping and financially assisting various micro and small businesses. SIDBI is a regulatory body that operates under the purview of the Ministry of Finance, Government of India. SIDBI runs the ‘Institutional Financial Program’ which in turn provides financial assistance to the MSME sector and thus help in setting up e-commerce platforms for these enterprises that further facilitate MSME Exports. It’s main hallmark is in providing Venture Capital funding to MSME’s. The loans that are given under the ‘Ubharte Sitaare’ programme, which started on 21 August 2021. All this has been accomplished due to the Trade Facilitation Agreement approved by WTO which proved to be instrumental in helping the local brands to meet the demands for MSME Exports. SIDBI Initiatives for 2022 has been lately in focusing on Cluster Development initiatives for SME Development.
It has now setup a separate Cluster Development Vertical to attend both soft and hard infrastructure. SIDBI has now setup it’s Cluster Development Fund (SCDF) with support from the Reserve Bank of India. The funds extends support to various State Governments to create infrastructure for development of both greenfield (induced clusters) and brownfield (existing clusters) MSME Clusters. It is currently planning for thematic engagements in Clusters that help SME Development.
The following are the various segments for lending and promotion that fall under SIDBI Vision 2.0 for MSME’s for 2022 :
A.) Institutional Finance –To eligible Prime Lending Institutions (PLIs) such as Banks, Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs) for facilitating onward lending to MSMEs.
For more information also read – https://smeventure.com/best-practices-for-msmes-to-grow-business/
B.) Direct Finance – To provide medium/short term financial assistance to eligible MSME’s or to execute urgent confirmed orders.
C.) Promotion and Development – SIDBI plays a proactive role in promotion and development of MSMEs to address various non- financial related challenges faced by them.
D.) Subsidiary Network – SIDBI has adopted a SIDBI PLUS Approach and instigated institutions by way of formation of a network of strong associates and subsidiaries that have become instrumental in realising the inclusive growth targets.
E.) Aggregator Platforms – SIDBI has setup www.udyamimitra.in, an interactive portal as an universal loan portal easing access to credit and handholding services for MSMEs.
F.) Fund of Funds – In order to encourage the Government’s agenda for flourishing entrepreneurship by providing indirect funding to those in a startup ecosystem to create e-commerce platforms through the provision of funds to VC funds.
G.) Structural Interventions – SIDBI along with various stakeholders of MSME space has made interventions for the growth & development of MSME ecosystem. Industry spotlight, MSME pulse, Microfinance Pulse and Fintech Pulse are some of its highlight reports published quarterly.
Do watch – https://www.youtube.com/watch?v=tNGHpEfCj5E
Special SIDBI Initiatives for 2022 :
1.) Dedicated funds : Swavalamban Resource Facility, Inclusive MSME Development Fund, Swavalamban Challenge Fund, Swavalamban Divyangjan ATMA Fund, Samridhhi and Neev Fund.
2.) Bank Sakhi : Support to State Rural Livelihoods Mission. Under the project, SIDBI trained over 1600 Bank Sakhis and ensured monitoring in all 38 districts of Bihar to ensure access to financial services at the far corners. SIDBI also provided capacity building support, training, monitoring and handholding support to 250 kirana store owners. It has plans for further replication of the successful Bihar project to expand into areas of Assam and Jharkhand.
3.) Swavalamban Assistance for Financial literacy,Adoption of villages credit & market Linkages (SAFAL) : Society for advancement of village economy (SAVE) was supported for 120 villages in Bihar and Jharkhand providing Financial Literacy Training to over 2400 livelihood Entrepreneurs and Micro Entrepreneurs. Highlights include 121 villages adopted during this intervention. Credit Linkages of 1965 participants and Market Linkages of 1467 partcipants were completed. This program is being scaled upto 700 villages spanning 10 states and ensuring Financial Literacy to over 15000 plus small and medium entrepreneurs.
4.) Swavalamban Connect Kendras (SCK’S) : It adopts digital approach to enterprise promotion for setting up 10000+ enterprises through 100 SCK’S. SCKs are working as counselling centers in 100 districts of UP, Bihar, Jharkhand, Telangana and Odisha. Aspirants seeking help have to dial toll free number 1800-200-1265 (in UP) and 1800-121-1265 (in other states). The central hub identifies the caller’s origin from STD code fed and directs the lead to SCK in the concerned district. So far, a total number of 4601 aspirants have been facilitated, 1893 enterprises have since been organised and credit connect provided to 936 beneficiaries.
5.) Project Management Units (PMU’s) : Project Management Units in 11 states were planned for strengthening the MSME ecosystem and transferring the good practices through learning sessions. Under PMU full time experts are alloted with nodal connect departments. At state level while SIDBI’s local offices maintain close cooperation and monitoring, there is a central unit of expert agency which collaborates with Promotion and Development Vertical at Head Office.
1St Phase – The 11 states marked in the first phase are Assam, Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh & Uttarakhand, initially for a period of 2 years. MoUs with all the 11 state governments have been signed and PMUs have started operations in these states.
2nd Phase – Project Management Units in 8 additional states and 1 Union Territory viz. Telangana, J&K/Ladakh, Madhya Pradesh, Jharkhand, Punjab, Bihar, West Bengal, Odisha and Chhattisgarh have been completed in the second phase in FY 2022. MoU with State/UT government viz. West Bengal, Telangana, Bihar J&K have already been finalized.
A lot has been done at the grass-root level by SIDBI. These were some of the recent initiatives undertaken by SIDBI for the role of development of MSME’s in India. The Trade Facilitation Agreement approved by WTO has been paramount in facilitating MSME Exports. Alternatively, these strategies proved to provide for marketing strategies for MSME’s and thus leading to create an healthy environment for growth of SME’s in India.