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- 4. intro missio n vision objecti ve functio n success • The Government of India set up the SIDBI under the special Act of the Parliament in October 1989. • SIDBI commenced its operations from April 2, 1990 with its head office in Lucknow. • SIDBI has 73 branches and 5 regional offices across the country. • SIDBI has been set up as a wholly owned subsidiary of IDBI (Industrial Development Bank Of India). • Its authorized capital is 1000 crore comprising equity capital of Rs. 750 crore and preference share of Rs. 250 crore. • It has been Established with a issued capital of 450 crore. • It is the Apex Institution which overseas, co-odinates and further strengthens various arrangement for providing financial and non financial assistances to small scale, Tiny and cottage Industries.
- 5. intro missio n vision objecti ve functio n success • Mission: “To empower the Micro, Small & Medium Enterprises(MSME) sector with view to contributing to the process of economic growth, employment generation and balance regional development.”
- 6. intro missio n ā vision objecti ve functio n success • 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 heighest corporate values through modern technology platform.”
- 7. intro missio n ā vision objecti ve functio n success Objective 1 Financing Objective 2 Promotion Objective 3 Development Objective 4 coordination 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.
- 8. intro missio n ā vision objecti ve functio n success • SIDBI refinance loans and advances to Small Scale Industrial Units and also provide sources support to them. • SIDBI grant direct assistance as well as refinance loan for financing export of products manufactured by Industrial concerns in the Small Scale Sectors. • SIDBI provides services like leasing, factoring etc. to industrial concerns in Small Scale Sectors. • SIDBI extends financial support to State Small Industries Development Corporation (SSIDCs) for providing source raw materials to and marketing the end products of Industrial units in Small Scale Units. • SIDBI provides support to National Small Industries Corporation (NSIC) for providing leasing, hire-purchase, and marketing support to industrial units in the Small Scale Units.
- 9. intro missio n ā vision objecti ve functio n success • SIDBI retained its position in the top 30 Development Banks of the World in the latest ranking of the Banker, London. • As per the May 2001 issue of the Banker, London, SIDBI ranked 25th both in terms of Capital and Asset. • Credit Guarantee Fund Trust for Micro and Small Enterprises popularly known as CGTMSE is widely being used by many PSU Banks and Private Sector Banks to fund MSME sector. • During the year 2002-03 the aggregate sanction and Disbursement of SIDBI amounted to Rs. 10904 crore and Rs. 6789 crore respectively.
- 10. Direct Finance1 Direct Finance Direct Finance Direct Finance Direct Finance Direct Finance Direct Finance Direct Finance Direct Finance Direct Finance 2 3 4 9 8 7 5 6 Bills Finance Re-Finance International Finance Promotional & Development activities Fixed Deposits Schemes Seed Money Schemes Venture Capital Fund Schemes National Equity Fund Scheme Product service &
- 11. 43.62% Others 15.4% Government Of India 10% NABARD 14.25% LIC 16.73% State Bank of India Rs. Subsidiary
- 13. intro Financial resources functio n Prohibite d function objecti ve workin g A Central Industrial Finance Corporation was set up under the Industrial Finance Corporations Act. 1948 in order to provide medium and long term credit to Industrial credit to Industrial undertakings which fall outside normal activities of commercial Banks. The state governments expressed their desire that similar corporations be set up in states to supplement the work of the Industrial Finance Corporation. State government also expressed that the state corporations be established under a special statue in order to make it possible to incorporate in the constitutions necessary provisions in regard to majority control by the government, guaranteed by the state government in regard to payment principal. In order to implement the views expressed by the state governments the State Financial Corporation bill was introduced in the parliament.
- 14. intro Financial resources functio n Prohibite d function objecti ve workin g The SFCs mobilize their financial resources from the following sources : • Their own share Capital • Income from Investment and repayment of loan. • Sale of Bonds. • Loans from the IDBI (to some extent) • Borrowing from the Reserve Bank of India. • Deposites from the public • Loans form the State Government.
- 15. intro Financial resources ā functio n Prohibite d function objecti ve workin g • The SFCs grant loans mainly for acquisition of fixed assets like land, building, plant and machinery. • The SFCs provide financial assistance to industrial units whose paid-up capital and reserves do not exceed Rs. 3 crore (or such higher limit up to Rs. 30 crore as may be specified by the central government). • The SFCs underwrite new stocks, shares, debentures etc., of industrial concerns. • The SFCs provide guarantee loans raised in the capital market by scheduled banks, industrial concerns, and state co-operative banks to be repayable within 20 years.
- 16. intro Financial resources functio n Prohibite d function objecti ve workin g Not to give loans to an Industrial unit exceeding 10% of its paid-up capital or RS. 60000 whichever is lower. Not to accept public deposits for a period exceeding 5 years. Not to accept deposits exceeding the paid up capital. Not to give loans on the security of its share. Not to declare dividend on its shares without sanction of the Central Government. Not to purchase share and stocks directly of an Industrial unit or limited public company.
- 17. intro Financial resources functio n Prohibite d function Objectiv e workin g • To establish uniformity in regional industry. • To provide incentive to new industries. • To bring efficiency in Regional Industrial Units. • To provide finance to small scale, medium sized and cottage industries in the state. • To develop regional financial resources.
- 18. intro Financial resources functio n Prohibite d function Objectiv e workin g The government of India passed the State Financial Corporation Act in 1951 and made it applicable to all the States. The authorised Capital of a State Financial Corporation is fixed by the State government within the minimum and maximum limits of Rs. 50 lakh and Rs. 5 crore and is divided into shares of equal value which were taken by the respective State Governments, the Reserve Bank of India, scheduled banks, co-operative banks, other financial institutions such as insurance companies, investment trusts and private parties. The shares are guaranteed by the State Government. The SFCs can augment its fund through issue and sale of bonds and debentures, which should not exceed five times the capital and reserves at Rs. 10 Lakh.
- 20. intro objective functio n Work performan ce State Industrial Investment Corporations (SIICs) also known as State Industrial Development Corporations (SIDCs) were set up under company Act, 1956. SIICs were set up as a wholly owned state government undertakings for promotion and development of medium and large industries. At present there are approx. 29 SIICs functioning in India. SIICs are not merely financing agencies, but are intended to act as instruments for accelerating the pace of Industrialization in respective states. SIICs were set up mainly to cater to the financial requirenment of medium and large scale industries.
- 21. intro objective functio n Work performan ce • To liaise with and to represent to the Central and State Governments, term lending and other financial institutions on the common problems and issues of member corporations • To promote co-ordination, collaboration, joint participation and general understanding among the member corporations etc. • To render assistance to member corporations in their efforts to improve efficiency of operations of their assisted and sponsored units. • To organize common service facilities, training courses, seminars, meetings and study tours for the benefit of the member corporations. • To sponsor studies, surveys, research and development projects pertaining to industries. • To establish and maintain at the Registered Office a commercial and technical library and information Centre for use of member corporations.
- 22. intro objective function Work performan ce • SIICs provide financial assistance to private and cooperative sectors for establishment, expansion and modernisation of industrial enterprises. • It develop infrastructural facilities so that new industrial enterprises may be promoted. • It identify and develop industrial areas for the establishment of industrial enterprises. • It make necessary arrangement for providing entrepreneurship training to new entrant. • SIICs promote and manage new industrial units particularly in backward areas.
- 23. intro objective functio n Work performanc e 0 500 1000 1500 2000 2500 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2003-04 Financial Assistance Sanctioned and Disbursed by SIICs Ltd. Amount Sanctioned (Rs.) Amount Disbursed (Rs.)