We empower MSMEs 1

Small Industries Development Bank of India

welcomes

The Participants for

The 1st Indian Railways – SIDBI – MSME Vendor Development Programme

August 29, 2017

SME Development Centre

Micro and Small Enterprises (MSE) in India

More than 2.6 crore units Registered / Unregistered MSEs

Provide employment to more than 6 Crore persons

Largest employment generating sector after agriculture

Employment potential at low capital cost

Constitute 95% of industrial units

Key contributors to national economy

33% of manufacturing output

45% of total exports

6% of Gross Domestic Product

We empower MSMEs

MSME Definition - MSMED Act 2006 MSMED Act 2006 – Definition of MSMEs

Investment in plant & machinery $

Micro enterprise --- Upto Rs 25 lakh

Manufacturing Small enterprise --- Above Rs 25 lakh upto Rs 5 cr

Medium enterprise --- Above Rs 5 cr upto Rs 10 cr

Enterprises

Investment in equipment #

Micro enterprise --- Upto Rs 10 lakh

Services Small enterprise --- Above Rs 10 lakh upto Rs 2 cr

Medium enterprise --- Above Rs 2 cr upto Rs 5 cr

$ original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No.S.O.1722(E) dated October 5, 2006

# original cost excluding land, building and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006

We empower MSMEs

About SIDBI

Constitution

• Set up under an Act of Parliament - April 1990

Shareholding

• Authorised – `1000 crore / Paid-up – ` 450 crore

• 34 shareholders – 33 (Banks, FIs and Insurance Companies in Public Sector) and Government of India.

Structure

• 15 Regional Offices,

• 81 Branches

Mandate

• Promotion, financing and development of MSME

• Co-ordinating the functions of institutions serving the sector.

Mission - To facilitate and strengthen credit flow to MSMEs

and address both financial and developmental gaps in the

MSME eco-system

We empower MSMEs

SIDBI – Apex institution for MSMEs

Addressing gaps in the MSME eco

system

Aligning with the National Agenda

Capacity building of and trying out new

financial intermediaries

to ensure outreach Innovating new

products / processes

Agency of the Govt for MSME

oriented schemes

Fulfils the objectives as Development Financial Institution (DFI) Through Credit and Credit plus services

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SIDBI – An Institution to Empower MSMEs

We empower MSMEs

SIDBI - Apex institution for MSME in India

Credit

Indirect Finance

Direct Finance

Micro finance

Credit Plus

Enterprise promotion/ skill development

Management Development

Cluster Development

Marketing Support

Policy advocacy

Credit Advisory

Institutional solutions

SVCL- Venture Capital

SMERA- SME Rating

CGTMSE – Collateral Free

Lending

ISTSL-Technology Transfer

ISARC – Asset Reconstruction

MUDRA – Funding the Unfunded

We empower MSMEs

Indirect Intervention :

through subsidiaries / associates

SIDBI

ISTSL (1995) Energy Efficiency - project reports,

Carbon credit for MSMEs

SVCL (1999)

Managing 7 VC funds of

Rs.1902 crore,

CGTMSE (2000)

23 lakh guarantees : Loans about Rs.1

lakh crore

SMERA (2006)

Over 38000 MSME ratings

INDIA’s first and only rating agency

for MSMEs

ISARC (2009)

Portfolio under management over

Rs.381 crore

NCGTC (2014) - to provide credit guarantee for loans for skill development, education, factoring, PMMY and Stand-up India.

MUDRA (2015) to fund the unfunded – Corpus Rs 20,000 cr & Credit Guarantee Cover – Rs 3000 cr

We empower MSMEs

Climate change / Cleaner Environment

• Sustainable Finance - Special Schemes on Energy Efficiency / Cleaner

environment - Zero Defect and Zero effect solutions

Start Up India / Stand up India

• Piloted Start Up Assistance Scheme – Direct intervention

• Funding Start ups through Venture Funds

• Supported Incubation Centres (IIT-K, KIT etc.)

• TIFAC –SIDBI Technology Innovation programme

Make in India

• SMILE scheme and Make in India Fund

Digital India

• Initiatives up for Web based platforms / solutions connecting stakeholders

• www.standupmitra.in & www.udyamimitra.in

Financial Inclusion – Funding the unfunded

• MUDRA and Micro Finance Initiatives

• Poorest State Inclusive Programme [PSIG]

SIDBI : Innovative Initiatives

We empower MSMEs 9

SIDBI provides for various types of Fund Based schemes like:-

• SMILE Scheme

• Financing Schemes for Sustainable Development

• Growth Capital & Equity Assistance Scheme

• Service Sector Assistance

• Privilege Customer Schemes (for existing customers with

excellent track record)

• Secured Business Loan

• Receivable Finance Scheme

Schemes may be viewed on SIDBI Website (www.sidbi.in ).

SIDBI : Schemes for MSMEs

SME Development Centre

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Purpose A corpus of Rs.10000 crore to provide soft loan in the nature of quasi

equity and term loan relatively on soft terms to MSMEs to meet the

required debt–equity ratio for establishment of MSME.

Form of assistance Term Loan & Soft Loan (in form of quasi equity)

Tenure Upto 10 years

Interest rate

(for initial 3 years)

Soft Loan : 8.95% p.a.

Term Loan : 9.45% to 9.60% p.a. (Depending on Internal Rating)

For Women/

SC/ST/PWD

Soft Loan : 8.90% p.a.

Term Loan : 9.45% to 9.55% p.a.

Security Flexible, including collateral free lending for loans up to Rs. 1 crore

under CGTMSE

Benefits • Lower Promoter’s Contribution required : 15% of project cost for

projects up to Rs. 1 crore and 20% for the rest subject to DER of 2.5

:1

• Reduced Rate of Interest and Lower Upfront Fee : 0.50%

SIDBI Make in India Fund for

Micr, Small and Medium Enterprises (SMILE)

SME Development Centre 11

Automobiles Automobile Components Aviation

Biotechnology Chemicals Construction

Defence Manufacturing Electrical machinery Electronic systems

Food Processing IT and BPM Leather

Media and entertainment Mining Oil and Gas

Pharmaceuticals Ports Railways

Renewable Energy Roads and Highways Space

Textile and Garments Thermal Power Tourism and Hospitality

Wellness Others

Make in India – 25 Sectors

We empower MSMEs

TIFAC- SIDBI Revolving Fund for Technology Innovation

(Srijan Scheme)

Fund TIFAC –SIDBI Revolving Technology Innovation Fund - Rs 30 cr

Scheme

Objective

Development, up-scaling, demonstration and commercialization of innovative

technology based projects by MSMEs. The Scheme will provide developmental

loan at flexible terms & interest rate to encourage / promote development /

innovation of new technology / process / product and its commercialization.

Eligible

customers

New / existing MSME units.

Quantum of

assistance

Upto 80% of the project cost subject to maximum of Rs.100 lakh.

Higher assistance could be considered selectively based on innovation content

in the projects.

Rate of Interest Not more than 5% p.a.

Repayment

Period

Not more than 6 years. Repayment flexible & would depend on Cash Flow

We empower MSMEs 13

Eligible

Project Cost

• Capital expenditure [land, building, plant & machinery, MFA, etc.]

• Intangibles– patents/ copy rights / R&D / purchase of technology

• Pre-op. expenses / IDC period / Working capital margin

• Marketing / brand building expenses

• Contingencies /Any other head required for the project

Operational

Methodology

Prospective customer to submit preliminary information about the

project / innovative technology in the format given

Info to be considered by a Project Recommending Committee (PRC).

PRC will carry out technical & financial screening and would

recommend the project to SIDBI for carrying out the detailed

financial appraisal.

Projects cleared by PRC shall be taken up for detailed financial

appraisal.

Project Approval Committee (PAC) to sanction proposals.

(Srijan Scheme…….contd.)

We empower MSMEs

Risk Capital Scheme Objective & Purpose –

• To provide growth capital to deserving MSMEs for:

• Bridging the gap in the means of finance for expansion/ modernization/ scaling up.

• New businesses/ diversification by entrepreneurs with established track record can be considered, selectively.

• Intangibles or non-asset creating investments, viz, product development, marketing related expenditure, R&D, investments in quality control, energy efficiency equipment, etc.

• Margin money for working capital or working capital on selective basis

• Any other bonafide expenditure required for growth of the business

Non Participative debt based products

Subordinated Debt

Fixed coupon

7 yr repayment

3 yr moratorium

Participative debt products

Sub debt/ debt or debentures with

Conversion options

Royalty features

Equity kickers

Equity based products

Optionally Convertible

Cumulative Preference

Shares

Equity

We empower MSMEs

Receivable Finance (Physical discounting to TReDS)

SIDBI – Pioneered the product

• MSMEs (particularly Ancillaries) face cash flow problems due to delayed

sales realization and collections from large corporate buyers

• Scheme enables MSMEs get payment immediately at competitive rate

based on the credit profile of the corporate buyers.

• More than 22000 MSMEs registered / Cumulative disbursements more

than Rs. 1 lakh crore.

SIDBI – set up NTREES platform (Web based platform)

– [Trade Receivables Engine for E discounting –Prefix N for NSE and suffix

S for SIDBI] Set up based on ‘Nafin’, Mexico model

– Reverse factoring Technology platform with multiple banking

– 15 corporates initially with >200 MSMEs on the platform

We empower MSMEs

TReDS • TReDS is a digital platform for MSMEs to auction their trade receivables at

competitive rates through online bidding by Financiers

• Settlement through NPCI’s “National Automated Clearing House” supports many-to-

many situation. Reversal of unsettled transactions handled automatically and resolves

issues related to reconciliation of payments.

• RXIL setup as a joint venture of SIDBI & NSE to operate TReDS Exchange

• Received in-principle approval from RBI on December 2, 2015

• Exchange started operations on January 09, 2017 after final approval from RBI

• Successfully executed financing of trade receivables of MSMEs

• NPCI NACH Debit & Credit Settlement processed successfully for both financing and

repayment legs

About RXIL

We empower MSMEs

www.standupmitra.in - The platform acts as a single window for application filling and tracking under Stand Up India Loans as well as provides the facility for choice of branches/ banks for credit assistance. The portal tracks individual applications and also facilitates the overall handholding process.

www.udyamimitra.in - The portal provides access to 1.32 lakh bank branches and 17,500 plus hand-holding agencies who assist in filing of applications, financial training, skill training, mentoring, access to margin money, subsidy, etc.

www.sidbistartupmitra.in - The main objective is to bring all the stakeholders in the startup eco system viz; start up entrepreneurs, incubators, investors (angels/ Venture Capital Funds), advisors, industry bodies and Banks together through the electronic platform and to serve as a single window for providing solutions to the early stage and start ups.

www.smallB.in – The portal is a virtual mentor and handholding forum for the potential / budding and even existing entrepreneurs to set up new units and grow the existing ones.

SIDBI’s Fintech Interventions

SME Development Centre

Stand Up India Scheme

www.standupmitra.in

We empower MSMEs

Stand Up India - Inclusive Credit Access

Collateral free credit - NCGTC

Credit Dispensation through Banks

Credit Ready Potential

entrepreneurs

Support for Monitoring

Credit Facilitation through Connect

centres

Non financial- Handholding

support

www.standupmitra.in

We empower MSMEs

Amount

• Between Rs.10 lakh and upto Rs.100 lakh (Composite Loan)

Eligibility

• SC/ST and/or woman entrepreneurs, above 18 years of age.

• Loans to green field project.

• In case of non-individual enterprises, 51% of the shareholding

and controlling stake should be held by either SC/ST and/or WE.

• Borrower should not be in default to any bank/FI

Size of loan • Composite loan of 75% of the project cost inclusive of term loan

and working capital.

• Cap would not apply if the PC along with convergence support

from any central/state margin/subsidy schemes exceeds 25% of

the project cost.

Security

• Besides primary security, the loan may be secured by collateral

security or guarantee of NCGTC as decided by the banks.

Repayment

• The loan is repayable in 7 years with a maximum moratorium

period of 18 months.

Stand Up India

www.standupmitra.in

We empower MSMEs

SIDBI UdyamiMitra

• One Stop Solution: Unique match making platform to MSME loan seekers, lenders as also handholding

agencies

• Apply and Track - Online application and real time tracking system

• Access to Finance - Any type of enterprise loans – MUDRA (upto Rs. 10 lakh) Stand-Up India Scheme

for SC/ST and Women- Rs.10 lakh to Rs.100 lakh, SME loans (presently upto Rs.100 lakh)

www.udyamimitra.in

We empower MSMEs

SIDBI is one of the Nodal Agencies implementing the subsidy schemes

launched by various Ministries of GOI. Brief details are :

1. CLCSS / Special CLCSS - Credit Linked Capital Subsidy Schemes for MSEs by Ministry

of MSME

2. TUFS - Technology Upgradation Fund Scheme for Textile units by Ministry of Textile.

3. IDLSS - Integrated Development of Leather Sector Scheme for leather sector units by

Department of Industrial Policy & Promotion & Policy under the aegis of Ministry of

Commerce and Industry.

4. FPTUFS - Scheme of Technology Upgradation /Setting up/ Modernisation /Expansion

of Food Processing Industries [FPTUFS] by Ministry of Food Processing Industries.

5. TEQUP - Technology and Quality Upgradation Programme to MSME by Ministry of MSME

Government sponsored subsidy Schemes

We empower MSMEs 23

Thank You