SIDBI

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  • 1. ASSIGNMENT – IECONOMIC ENVIRONMENT-SIDBIMADE BY : RISHEBH CLEMENTBBA-IBSEMESTER IISUBMITTED TO:Mrs. SUPRIYA LAMBA
  • 2. IntroductionIntroduction Small Industries Development Bank of India (SIDBI), set up onSmall Industries Development Bank of India (SIDBI), set up onApril 2, 1990 under an Act of Indian Parliament, is the PrincipalApril 2, 1990 under an Act of Indian Parliament, is the PrincipalFinancial Institution for the Promotion, Financing andFinancial Institution for the Promotion, Financing andDevelopment of the Micro, Small and Medium EnterpriseDevelopment of the Micro, Small and Medium Enterprise(MSME) sector and for Co-ordination of the functions of the(MSME) sector and for Co-ordination of the functions of theinstitutions engaged in similar activities.institutions engaged in similar activities. It was incorporated initially as a wholly owned subsidiary ofIt was incorporated initially as a wholly owned subsidiary ofIndustrial Development Bank of India.Industrial Development Bank of India.
  • 3.  Beginning as a refinancing agency to banks and state levelBeginning as a refinancing agency to banks and state levelfinancial institutions for their credit to small industries, it hasfinancial institutions for their credit to small industries, it hasexpanded its activities, including direct credit to the SMEexpanded its activities, including direct credit to the SMEthrough 100 branches in all major industrial clusters in India.through 100 branches in all major industrial clusters in India. Recently it has opened seven branches christened as MicroRecently it has opened seven branches christened as MicroFinance branches, aimed especially at dispensing loans up toFinance branches, aimed especially at dispensing loans up toRs. 5 lakh.Rs. 5 lakh. It is an apex body and nodal agency for formulatingIt is an apex body and nodal agency for formulatingcoordination and monitoring the policies and programmes forcoordination and monitoring the policies and programmes forpromotion and development of small scale industries.promotion and development of small scale industries. SIDBI has also floated several other entities for relatedSIDBI has also floated several other entities for relatedactivities. Credit Guarantee Fund Trust for Micro and Smallactivities. Credit Guarantee Fund Trust for Micro and SmallEnterprises provides guarantees to banks for collateral-freeEnterprises provides guarantees to banks for collateral-freeloans extended to SME.loans extended to SME.
  • 4. Business Domain of SIDBIBusiness Domain of SIDBI The business domain of SIDBI consists of small scaleThe business domain of SIDBI consists of small scaleindustrial units, which contribute significantly to the nationalindustrial units, which contribute significantly to the nationaleconomy in terms of production, employment and exports.economy in terms of production, employment and exports. Small scale industries are the industrial units in which theSmall scale industries are the industrial units in which theinvestment in plant and machinery does not exceed Rs.10investment in plant and machinery does not exceed Rs.10million .million . About 3.1 million such units, employing 17.2 million personsAbout 3.1 million such units, employing 17.2 million personsaccount for a share of 36 per cent of Indias exports and 40 peraccount for a share of 36 per cent of Indias exports and 40 percent of industrial manufacture.cent of industrial manufacture. In addition, SIDBIs assistance flows to the transport, healthIn addition, SIDBIs assistance flows to the transport, healthcare and tourism sectors and also to the professional and self-care and tourism sectors and also to the professional and self-employed persons setting up small-sized professional ventures.employed persons setting up small-sized professional ventures.
  • 5. AchievementsAchievements SIDBI retained its position in the top 30 Development BanksSIDBI retained its position in the top 30 Development Banksof the World in the latest ranking of The Banker, London.of the World in the latest ranking of The Banker, London. As per the May 2001 issue of The Banker, London, SIDBIAs per the May 2001 issue of The Banker, London, SIDBIranked 25th both in terms of Capital and Assets.ranked 25th both in terms of Capital and Assets. Credit Guarantee Fund Trust for Micro and Small EnterprisesCredit Guarantee Fund Trust for Micro and Small Enterprisespopularly known as CGTMSE is widely being used by manypopularly known as CGTMSE is widely being used by manyPSU Banks and Private sector banks to fund MSME sector.PSU Banks and Private sector banks to fund MSME sector. During the year 2002-03 the aggregate sanction andDuring the year 2002-03 the aggregate sanction anddisbursements of SIDBI amounted to Rs 10904crore and Rsdisbursements of SIDBI amounted to Rs 10904crore and Rs6789crore respectively.6789crore respectively.
  • 6. Mission & VisionMission & Vision Mission:Mission:““To empower the Micro, Small and MediumTo empower the Micro, Small and MediumEnterprises (MSME) sector with a view toEnterprises (MSME) sector with a view tocontributing to the process of economic growth,contributing to the process of economic growth,employment generation and balanced regionalemployment generation and balanced regionaldevelopmentdevelopment”” Vision:““To emerge as a single window for meeting theTo emerge as a single window for meeting thefinancial and developmental needs of the MSMEfinancial and developmental needs of the MSMEsector to make it strong, vibrant and globallysector to make it strong, vibrant and globallycompetitive, to position SIDBI Brand as thecompetitive, to position SIDBI Brand as thepreferred and customer - friendly institution and forpreferred and customer - friendly institution and forenhancement of share - holder wealth and highestenhancement of share - holder wealth and highestcorporate values through modern technologycorporate values through modern technologyplatformplatform”
  • 7. ObjectivesObjectives Four basic objectives are set out in the SIDBI Charter. They are:Four basic objectives are set out in the SIDBI Charter. They are: FinancingFinancing PromotionPromotion DevelopmentDevelopment Co-ordinationCo-ordinationfor orderly growth of industry in the small scale sector. Thefor orderly growth of industry in the small scale sector. TheCharter has provided SIDBI considerable flexibility in adoptingCharter has provided SIDBI considerable flexibility in adoptingappropriate operational strategies to meet these objectives.appropriate operational strategies to meet these objectives.
  • 8. Products And ServicesProducts And Services Direct finance.Direct finance. Bills financeBills finance RefinanceRefinance International financeInternational finance Promotional & Development activities.Promotional & Development activities. Fixed deposit schemeFixed deposit scheme Technology Upgradation & Modernisation Fund SchemeTechnology Upgradation & Modernisation Fund Scheme{TDMF}{TDMF} Venture Capital Fund SchemeVenture Capital Fund Scheme Seed Money SchemesSeed Money Schemes National Equity Fund SchemeNational Equity Fund Scheme
  • 9. Direct FinanceDirect Finance Since its beginning, SIDBI had been providing refinance toSince its beginning, SIDBI had been providing refinance toState Level Finance Corporations / State IndustrialState Level Finance Corporations / State IndustrialDevelopment Corporations / Banks etc., against their loansDevelopment Corporations / Banks etc., against their loansgranted to small scale units.granted to small scale units. SIDBI’s direct finance schemes are:SIDBI’s direct finance schemes are: Scheme for expansion / diversification of small scale units.Scheme for expansion / diversification of small scale units. Scheme for specialised marketing agencies.Scheme for specialised marketing agencies. Scheme for ancilaring / subcontract units.Scheme for ancilaring / subcontract units. Scheme for existing Export Oriented Units(EOUs) toScheme for existing Export Oriented Units(EOUs) toenable them to acquire ISO 9000 series certification.enable them to acquire ISO 9000 series certification.
  • 10. Bills Finance SchemesBills Finance Schemes Bills Finance Scheme involves provision of medium and short-Bills Finance Scheme involves provision of medium and short-term finance for the benefit of the small-scale sector.term finance for the benefit of the small-scale sector. Bills Finance seeks to provide finance, to manufacturers ofBills Finance seeks to provide finance, to manufacturers ofindigenous machinery, capital equipment, components sub-indigenous machinery, capital equipment, components sub-assemblies etc, based on compliance to the various eligibilityassemblies etc, based on compliance to the various eligibilitycriteria, norms etc as applicable to the respective schemes.criteria, norms etc as applicable to the respective schemes. To be eligible under the various bills schemes, one of theTo be eligible under the various bills schemes, one of theparties to the transactions to the scheme has to be an industrialparties to the transactions to the scheme has to be an industrialunit in the small-scale sector within the meaning of Section 2(h)unit in the small-scale sector within the meaning of Section 2(h)of the SIDBI Act, 1989.of the SIDBI Act, 1989.
  • 11. Refinance SchemesRefinance Schemes Refinance scheme is introduced for catering to the need ofRefinance scheme is introduced for catering to the need offunds of Primary Lending Institutes {PLI} for financing smallfunds of Primary Lending Institutes {PLI} for financing smallscale sector.scale sector. Under the scheme, SIDBI grants refinance against term loansUnder the scheme, SIDBI grants refinance against term loansgranted by the eligiblegranted by the eligible PLI’sPLI’s to industrial concerns for settingto industrial concerns for settingup industrial projects in the small scale sector as also for theirup industrial projects in the small scale sector as also for theirexpansion / modernization / diversification.expansion / modernization / diversification. Schemes of re-finance assistance:Schemes of re-finance assistance: Scheme for SC-ST & physically handicraft personsScheme for SC-ST & physically handicraft persons Composite loan schemeComposite loan scheme Equipment refinance schemes.Equipment refinance schemes. Schemes for small road transport operators.Schemes for small road transport operators. Special assistance to ex-servicemen.Special assistance to ex-servicemen.                            
  • 12. International Finance SchemesInternational Finance Schemes The main objective of the various International FinanceThe main objective of the various International Financeschemes is to enable small-scale industries to raise finance atschemes is to enable small-scale industries to raise finance atinternationally competitive rates to fulfill their exportinternationally competitive rates to fulfill their exportcommitments.commitments. The financial assistance is being offered in US Dollars andThe financial assistance is being offered in US Dollars andEuro currencies. Assistance in Rupees is also provided to theEuro currencies. Assistance in Rupees is also provided to theneedy borrowers.needy borrowers. The international finance is available from pre-shipment &The international finance is available from pre-shipment &post shipment credit.post shipment credit. Need based limit, depending on the normal trade terms andNeed based limit, depending on the normal trade terms andcredit period given to overseas buyers by exporters notcredit period given to overseas buyers by exporters notexceeding 180 days.exceeding 180 days.
  • 13. Promotional and DevelopmentPromotional and DevelopmentActivitiesActivities As an apex financial institution for promotion, financing andAs an apex financial institution for promotion, financing anddevelopment of industry in the small scale sector, SIDBI meetsdevelopment of industry in the small scale sector, SIDBI meetsthe varied developmental needs of the Indian SSI sector by itsthe varied developmental needs of the Indian SSI sector by itswide-ranging Promotional and Developmental (P&D)wide-ranging Promotional and Developmental (P&D)activities.activities. The activities are as follows:The activities are as follows: Entrepreneurship Development Programmes.Entrepreneurship Development Programmes. Management Development Programmes.Management Development Programmes. Technology Upgradation Programmes.Technology Upgradation Programmes.
  • 14. Fixed Deposit SchemeFixed Deposit SchemeTime periodTime periodRevised Annual InterestRevised Annual InterestRate %p.a. * w.e.f AugustRate %p.a. * w.e.f August10, 200910, 2009Interest (% p.a.)Interest (% p.a.)12 months - 13 months12 months - 13 months 6.506.5014 months - 36 months14 months - 36 months 7.007.0014 months - 36 months14 months - 36 months 7.507.50For SeniorFor SeniorCitizensCitizens7.07.07.57.58.08.0The Interest Rate Structure for SIDBI Fixed Deposit Schemeof SIDBI are as under:
  • 15. Technology Upgradation &Technology Upgradation &Modernization Fund SchemeModernization Fund Scheme This fund was setup in the year 1996 by the SIDBI with anThis fund was setup in the year 1996 by the SIDBI with aninitial capital of 200 million.initial capital of 200 million. It was setup for the purpose of encouraging the existing smallIt was setup for the purpose of encouraging the existing smallscale industrial units to modernize production facilities andscale industrial units to modernize production facilities andadopt improved and updated technology for strengtheningadopt improved and updated technology for strengtheningexport capabilities.export capabilities. For availing benefits under this scheme the unit have toFor availing benefits under this scheme the unit have toprepare an estimate for modernization & submit it to SIDBI.prepare an estimate for modernization & submit it to SIDBI. The sanction of funds is made depending upon the estimateThe sanction of funds is made depending upon the estimatesubmitted.submitted.
  • 16. Venture Capital Fund SchemeVenture Capital Fund Scheme SIDBI is participating in the Venture capital fund set by publicSIDBI is participating in the Venture capital fund set by publicsector institutions as well as private companies to the extent ofsector institutions as well as private companies to the extent ofRs,50,00,000 of total capital of the fund required.Rs,50,00,000 of total capital of the fund required. The fund should be dedicated to financing small industryThe fund should be dedicated to financing small industrypreferably the most risky one.preferably the most risky one.
  • 17. Seed Money SchemesSeed Money Schemes One of the constraints faced by Entrepreneurs is the lack ofOne of the constraints faced by Entrepreneurs is the lack ofown resources to promote the minimum promoterown resources to promote the minimum promotercontribution.contribution. Hence, SIDBI introduced seed money scheme for the benefitHence, SIDBI introduced seed money scheme for the benefitof entrepreneurs.of entrepreneurs. Seed money is available through DIC { Direct IndustrySeed money is available through DIC { Direct IndustryCentre } to those entrepreneur who are technically qualifiedCentre } to those entrepreneur who are technically qualifiedbut lack of own capital.but lack of own capital.
  • 18. National Equity Fund SchemeNational Equity Fund Scheme In order to provide equity type assistance, SIDBI is operation aIn order to provide equity type assistance, SIDBI is operation aNational Equity Fund Scheme.National Equity Fund Scheme. The equity capital loan to the extent of 2.5lakh is sanctioned toThe equity capital loan to the extent of 2.5lakh is sanctioned toeach project provided the protect qualities under this scheme.each project provided the protect qualities under this scheme.
  • 19. THANK YOU