Small Industries Development Bank of India
Small Industries Development Bank of India is an independent financial institution aimed to aid the growth and development of micro, small and medium-scale enterprises (MSME) in India. Set up on April 2, 1990 through an act of parliament, it was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India. Currently the ownership is held by 34 Government of India owned / controlled institutions. Beginning as a refinancing agency to banks and state level financial institutions for their credit to small industries, it has expanded its activities, including direct credit to the SME through 100 branches in all major industrial clusters in India. Besides, it has been playing the development role in several ways such as support to micro-finance institutions for capacity building and onlending. Recently it has opened seven branches christened as Micro Finance branches, aimed especially at dispensing loans up to ₹5 lakh.
It is the Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector and for Co-ordination of the functions of the institutions engaged in similar activities.
SIDBI has also floated several other entities for related activities. Credit Guarantee Fund Trust for Micro and Small Enterprises () provides guarantees to banks for collateral-free loans extended to SME. SIDBI Venture Capital Ltd.() is a venture capital company focussed at SME. SME Rating Agency of India Ltd. (SMERA - ) provides composite ratings to SME. Another entity founded by SIDBI is ISARC - India SME Asset Reconstruction Company in 2009, as specialized entities for NPA resolution for SME.
The purpose is to provide refinance facilities and short term lending to industries. It is headquartered in Lucknow. Former Deputy Managing Director is Shri N.K. Maini. Dr. Kshatrapati Shivaji is the new Chairman and Managing Director of the organisation.
Small Industries Development Bank of India (SIDBI), set up on April 2, 1990 under small industries development bank of India act, is the Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector and for Co-ordination of the functions of the institutions engaged in similar activities. The Charter establishing it, The Small Industries Development Bank of India Act, 1989 envisaged SIDBI to be "the principal financial institution for the promotion, financing and development of industry in the small scale sector and to co-ordinate the functions of the institutions engaged in the promotion and financing or developing industry in the small scale sector and for matters connected therewith or incidental thereto.
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 Assets.[updation needed]
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 disbursements of SIDBI amounted to ₹10,904 crore and ₹6,789 crore respectively. SIDBI has been permitted to raise finances up to ₹2,730 crore the year 2013 onward by the Reserve Bank of India.
Business Domain of SIDBI
The business domain of SIDBI consists of Micro, Small and Medium Enterprises (MSMEs), which contribute significantly to the national economy in terms of production, employment and exports. MSME sector is an important pillar of Indian economy as it contributes greatly to the growth of Indian economy with a vast network of around 3 crore units, creating employment of about 7 crore, manufacturing more than 6,000 products, contributing about 45% to manufacturing output and about 40% of exports, directly and indirectly. In addition, SIDBI's assistance also flows to the service sector including transport, health care, tourism sectors etc.
SIDBI Among Top 30 Development Banks of the World
SIDBI retained its position in the top 30 Development Banks of the World in the ranking of The Banker, London. As per the May 2001 issue of The Banker, London, SIDBI ranked 25th both in terms of Capital and Assets.
In its endeavour towards holistic development of the MSME sector, SIDBI adopts a ‘Credit Plus’ approach wherein, besides credit, the Bank also provides grant support for the Promotion and Development (P&D) of the sector to make it strong, vibrant and competitive. The P&D activities of the bank include Micro Enterprise Promotion, Entrepreneurship Development, Cluster Development, Capacity Building of the MSME Sector, promoting Responsible Finance among Micro Finance Institutions, Sustainable Finance to MSMEs including Energy Efficiency, Environment Protection, etc.
Cumulative disbursements as at end March 2014 have crossed ` 3260 trillion (€ 40.75 trillion) benefiting more than 32 million persons in the MSME sector. The total outstanding portfolio as at end March 2014 aggregated ` 612.71 billion (€7.66 billion).
SIDBI also functions as a Nodal/ Implementing Agency to various ministries of Government of India viz., Ministry of MSME, Ministry of Textiles, Ministry of Commerce and Industry, Ministry of Food Processing and Industry, etc.
SIDBI has taken the initiative to promote several institutions viz., Credit Guarantee Fund Trust for Micro and Small Enterprises, SIDBI Venture Capital, SME Rating Agency of India Ltd and India SME Technology Services Ltd., for the benefit of the MSME sector.
Micro Units Development & Refinance Agency (MUDRA) Bank, an initiative by Government of India to support non-corporate small business, is proposed to initiate it as a unit of SIDBI to benefit from SIDBI’s initiatives and expertise.