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WE EMPOWER MSME
COMPANY PROFILE
SIDBI (small industrial development bank of India) was started with the motto
of refinancing as the sole business. RBI considers SIDBI and NABARD as two
refinancing institutions. As the mainfocus always has been this rather than
direct financing, the brand image of SIDBI has not changed in so many years.
In the banking sector as a whole, there are too many middle level banks that
come in direct contact with the customer and this has been the main reason
SIDBI is considered as the last resort for financing. SIDBI almost had a
monopoly in refinancing the small scale units but now there have been
competition from other commercial banks as well that have started initializing
the SME finance like ICICI and SBI. SIDBI has also started tying up with
other nationalized and commercial banks in this regard that can help it gain
some more visibility and selling the products that need aggressive marketing.
SIDBI has a special corporate status because it has got an expertise since 1964
and has been an agent in government schemes and finance is provided
considering all expenses related to the project from conceptualization of the
project to the successful execution of the project. They target the SME as they
are serving the niche market. It is also synonym to developmental banking as
they have soft corner for the SMEs and for this section of industry they have
liberal policies, promote and develop small scale industries. Helping entrepreneur
is also one of the functions and duties of SIDBI.
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WE EMPOWER MSME
AIM AND ESTABLISHMENT
HISTORY
Small Industries Development Bank of India (SIDBI), set up on April 2, 1990
under an Act of Indian Parliament, 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.
PROVISION OF CHARTER
SIDBI was established on April 2, 1990. 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.
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
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WE EMPOWER MSME
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.
MANDATORY 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. The activities of SIDBI, as they have
evolved over the period of time, now meet almost all the requirements of
small scale industries which fall into a wide spectrum constituting modern and
technologically superior units at one end and traditional units at the other.
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WE EMPOWER MSME
DEVELOPMENT OUTLOOK
The major issues confronting MSMEs are identified to be:
Technology obsolescence Managerial inadequacies Delayed Payments Poor Quality Incidence of Sickness Lack of Appropriate Infrastructure and Lack of Marketing Network
There can be many more similar issues hindering the orderly growth of
MSMEs. Over the years, SIDBI has put in place financing schemes either
through its direct financing mechanism or through indirect assistance mechanism
and special focus programmes under its P&D initiatives. In its approach, SIDBI
has struck a good balance between financing and providing other support
services.
CO-ORDINATION AND UNDERSTANDING
As an apex institution, SIDBI makes use of the network of the banks and
state level financial Institutions, which have retail outlets. SIDBI supplements
the efforts of existing institutions through its direct assistance schemes to reach
financial assistance to the ultimate borrowers in the small scale sector.
Refinancing, bills rediscounting, lines of credit and resource support
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WE EMPOWER MSME
mechanisms have evolved over the period of time to route SIDBI's assistance
through the network of other retail institutions in the financial system.
Improved levels of co-ordination for development of the small scale sector is
also achieved through a system of dialogue and obtaining feedback from the
representatives of institutions of small scale industries who are on the SIDBI's
National Advisory Committee and Regional Advisory Committees.
SIDBI has entered into Memoranda of Understanding with many banks ,
governmental agencies, international agencies, research & development
institutions and industry associations to facilitate a co-ordinated approach in
dealing with the issues for development of small scale industries.
SIDBI's MOUs
Swiss Agency for Development and Co-operation Small Industries Development Organisation Auto Components Manufactures Association Council for Scientific and Industrial Research Asia and Pacific Centre for Transfer of Technology United Nations Industrial Development Organisation Confederation of Indian Industry National Research Development Organisation Government of India for channelizing TREAD assistance Small Enterprise Assistance Funds (SEAF) For setting up of SEAF India
SME Equity Fund and for other capacity building initiatives for SMEs
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MISSION AND VISSION