SMALL INDUSTRIES

DEVELOPMENT BANK
OF INDIA
Presented By
Mr. Naveen S.D
9019471564
The Oxford College of Business
Management, Bangalore
 Introduction
• The Government of India set up the SIDBI under a special
Act of the Parliament in October 1989.

• SIDBI commenced its operations from April 2, 1990 with its

head office in Lucknow.

• SIDBI has been setup as a wholly owned subsidiary of

IDBI.

• Its authorised capital is Rs.250 crore with an enabling

provision to increase it to Rs.1000 crore.

• It is the apex institution which oversees, co-ordinates &

further strengthens various arrangements for providing
financial and non-financial assistance to small-scale, tiny,
and cottage industries.
 Mission & Vision
• Mission:
“To empower the Micro, Small and Medium Enterprises
(MSME) sector with a view to contributing to the process
of economic growth, employment generation and balanced
regional development”

• Vision:
“To emerge as a single window for meeting the financial
and developmental needs of the MSME sector to make it
strong, vibrant and globally competitive, to position SIDBI
Brand as the preferred and customer - friendly institution
and for enhancement of share - holder wealth and highest
corporate values through modern technology platform”
 Objectives
• Four basic objectives are set out in the SIDBI
Charter. They are:
– Financing
– Promotion
– Development
– Co-ordination

for orderly growth of industry in the small scale sector. The

Charter has provided SIDBI considerable flexibility in
adopting appropriate operational strategies to meet these
objectives.
 Products & Services
• Direct finance.
• Bills finance
• Refinance
• International finance
• Promotional & Development activities.
• Fixed deposit scheme
• Technology Upgradation & Modernisation Fund
Scheme {TDMF}
• Venture Capital Fund Scheme
• Seed Money Schemes
• National Equity Fund Scheme
 Direct Finance
• Since its beginning, SIDBI had been providing
refinance to State Level Finance Corporations /
State Industrial Development Corporations /
Banks etc., against their loans granted to small
scale units.

• SIDBI’s direct finance schemes are:

– Scheme for expansion / diversification of small scale
units.
– Scheme for specialised marketing agencies.
– Scheme for ancilaring / subcontract units.
– Scheme for existing Export Oriented Units(EOUs) to
enable them to acquire ISO 9000 series certification.
 Bills Finance Schemes
• Bills Finance Scheme involves provision of medium
and short-term finance for the benefit of the small-
scale sector.

• Bills Finance seeks to provide finance, to

manufacturers of indigenous machinery, capital
equipment, components sub-assemblies etc, based on
compliance to the various eligibility criteria, norms etc
as applicable to the respective schemes.

• To be eligible under the various bills schemes, one of

the parties to the transactions to the scheme has to be
an industrial unit in the small-scale sector within the
meaning of Section 2(h) of the SIDBI Act, 1989.
 Refinance Schemes
• Refinance scheme is introduced for catering to the need of funds of
Primary Lending Institutes {PLI} for financing small scale sector.

• Under the scheme, SIDBI grants refinance against term loans granted
by the eligible PLIs to industrial concerns for setting up industrial
projects in the small scale sector as also for their expansion /
modernisation / diversification.

• PLIs are SIDC, SFC. Banks like commercial banks, Co-operative

Banks, Regional Rural Banks

• Schemes of re-finance assistence:

– Scheme for SC-ST & physically handicraft persons
– Composite loan scheme
– Equipment refinance schemes.
– Schemes for small road transport operators.
– Special assistence to ex-servicemen.
              
 International Finance Schemes
• The main objective of the various International Finance schemes
is to enable small-scale industries to raise finance at
internationally competitive rates to fulfill their export
commitments.

• The financial assistance is being offered in US Dollars and Euro

currencies. Assistance in Rupees is also provided to the needy
borrowers.

• The international finance is available from pre-shipment & post

shipment credit.

• Need based limit, depending on the normal trade terms and

credit period given to overseas buyers by exporters not exceeding
180 days.
 Fixed Deposit Scheme
The Interest Rate Structure for SIDBI Fixed Deposit Scheme of SIDBI are
as under:

Revised Annual Interest For Senior

Rate %p.a. * w.e.f August Citizens
Time period
10, 2009

Interest (% p.a.)
12 months - 13 months 6.50 7.0

14 months - 36 months 7.00 7.5

14 months - 36 months 7.50 8.0

 Promotional and Development
Activities
• As an apex financial institution for promotion,
financing and development of industry in the small
scale sector, SIDBI meets the varied
developmental needs of the Indian SSI sector by its
wide-ranging Promotional and Developmental
(P&D) activities.

• The activities are as follows:

– Enterpreneurship Development Programmes.
– Management Development Programmes.
– Technology Upgradation Programmes.
 Technology Upgradation &
Modernisation Fund Scheme
{TDMF}
• This fund was setup in the year 1996 by the SIDBI with an
initial capital of 200 crores.

• It was setup for the purpose of encouraging the existing

small scale industrial units to modernise production
facilities and adopt improved and updated technology for
strengthning export capabalities.

• For availing benefits under this scheme the unit have to

prepare an estimate for modernisation & submit it to
SIDBI.

• The sanction of funds is made depending upon the

estimate submited.
 Venture Capital Fund Scheme
• SIDBI is participating in the Venture capital
fund set by public sector institutions as well
as private companies to the extent of
Rs,50,00,000 of total capital of the fund
required.

• The fund should be didicated to financing

small industry preferabally the most risky
one.
 National Equity Fund Scheme
• In order to provide equity type assistance,
SIDBI is operation a National Equity Fund
Scheme.

• The equity capital loan to the extent of

2.5lakh is sanctioned to each project
provided the profect qualities under this
scheme.
 Seed Money Schemes
• One of the constraints faced by Entrepreneurs is
the lack of own resources to promote the minimum
promoter contribution.

• Hence, SIDBI introduced seed money scheme for

the benefit of entrepreneurs.

• Seed money is available through DIC { Direct

Industry Centre } to those entrepreneur who are
technically qualified but lack of own capital.
THANK YOU