Small Industries Development Bank of India

The Small Industries Development Bank of India (SIDBI) was established on April 2, 1990, under an Act of the Indian Parliament. It serves as the Principal Financial Institution dedicated to the promotion, financing, and development of the Micro, Small, and Medium Enterprises (MSME) sector in India. Additionally, SIDBI coordinates the functions of institutions engaged in similar activities, ensuring a cohesive approach to MSME support.

Mandate and Functions

SIDBI's mandate encompasses a triple agenda:

• Promotion: Fostering the growth of MSMEs through various initiatives.
• Financing: Providing financial assistance tailored to the diverse needs of MSMEs.
• Development: Implementing programs aimed at the holistic development of the MSME sector.

To execute this mandate effectively, SIDBI operates through multiple channels:

Indirect Lending

This approach leverages a multiplier effect, reaching a broader MSME audience by collaborating with Banks, Small Finance Banks (SFBs), Non-Banking Financial Companies (NBFCs), Microfinance Institutions (MFIs), and Fintech companies.

Direct Lending

Addressing specific credit gaps in the MSME sector, SIDBI offers innovative lending products that can be scaled by the broader credit delivery ecosystem.

Fund of Funds

Encouraging an entrepreneurial culture by supporting emerging startups through dedicated funding channels.

Promotion and Development

Beyond financial support, SIDBI engages in activities that promote entrepreneurship and provide guidance to budding entrepreneurs, ensuring the MSME sector's holistic development.

Facilitation

Acting as a facilitator, SIDBI serves as the Nodal Agency for various MSME-oriented schemes initiated by the Government, ensuring effective implementation and coordination.

Financial Products and Services

SIDBI offers a diverse range of financial products tailored to meet the varying needs of MSMEs:

• Machinery Loan: Assistance for purchasing machinery, ensuring MSMEs have access to the latest technology.
• Green Finance Loan: Financial support for projects that adopt environmentally friendly practices, promoting sustainable development.
• Project Loan: Funding for new projects or expansion of existing ones, facilitating business growth.
• Working Capital: Assistance to meet daily operational expenses, ensuring smooth business operations.
• PRAYAAS: A scheme designed to provide financial support to micro-entrepreneurs, promoting grassroots entrepreneurship.
• Fund of Funds for Startups: Investments aimed at boosting the startup ecosystem, providing necessary capital for innovative ventures.

Role in Government Programs

SIDBI plays a pivotal role in implementing various government programs aimed at industrial and sectoral development:

• Production Linked Incentive (PLI) Scheme for Telecom & Networking Products: Oversees this scheme launched by the Department of Telecommunications, aiming to boost domestic manufacturing.
• PLI Scheme for Pharmaceuticals: Manages this initiative to enhance domestic pharmaceutical manufacturing capabilities.
• Strengthening of Pharmaceutical Industries (SPI): Supports pharma clusters and MSMEs to improve productivity, quality, and sustainability.

Subsidiary Network and Ecosystem Development

To create a supportive financial infrastructure for MSME growth, SIDBI has established a network of subsidiaries and associates:

• SIDBI Venture Capital Limited (SVCL): Provides venture capital assistance to MSMEs.
• Micro Units Development & Refinance Agency (MUDRA): Focuses on funding micro-enterprises.
• Receivable Exchange of India Ltd. (RXIL): Enables faster realization of receivables by MSMEs.
• SMERA Ratings Limited (now Acuite Ratings & Research Limited): Offers credit rating services to MSMEs.
• India SME Technology Services Ltd. (ISTSL): Provides technology advisory and consultancy services.
• India SME Asset Reconstruction Company Ltd. (ISARC): Focuses on the resolution of non-performing assets in the MSME sector.

Non-Financial Interventions and Knowledge Initiatives

Beyond financial services, SIDBI engages in several non-financial interventions to support the MSME sector:

• CriSidEx: India's first sentiment index for micro and small enterprises, measuring business sentiment.
• MSME Pulse: A quarterly report on MSME credit activity, providing insights into credit trends.
• Udyami Mitra Portal: Improves accessibility of credit and handholding services to MSMEs.

Leadership and Governance

SIDBI operates under the jurisdiction of the Ministry of Finance, Government of India, and is headquartered in Lucknow, Uttar Pradesh. As of December 2020, Shri Manoj Mittal serves as the Chairman and Managing Director, leading the institution towards achieving its mission of empowering MSMEs.