Small
Industries Development Bank of India (SIDBI)
SIDBI was set up by an Act of Parliament, as an apex institution
for promotion, financing and development of industries in small scale
sector and for coordinating the functions of other institutions engaged
in similar activities. It commenced operations on April 2, 1990. SIDBI
extends direct/indirect financial assistance to SSIs, assisting the
entire spectrum of small and tiny sector industries on All India basis.
The range of assistance comprising financing, extension support and
promotional, are made available through appropriate schemes of direct
and indirect assistance for the following purposes:-
- Setting up of new projects
- Expansion, diversification, modernisation, technology
upgradation, quality improvement, rehabilitation of existing units
- Strengthening of marketing capabilities of SSI units.
- Development of infrastructure for SSIs and
- Export promotion.
Direct
Assistance Schemes
SIDBI directly assists SSIs under Project Finance Scheme, Equipment
Finance Scheme, Marketing Scheme, Vendor Development Scheme,
Infrastructural Development Scheme, ISO-9000, Technology Development &
Modernisation Fund, Venture Capital Scheme, assistance for leasing to
NBFCs, SFCs, SIDCs and resource support to institutions involved in the
development and financing of small scale sector.
These Schemes are mainly targeted at addressing some of the major
problems of SSIs in areas such as high tech project, marketing,
infrastructural development, delayed realisation of bills, obsolescence
of technology, quality improvement, export financing and venture capital
assistance.
Indirect
Assistance Schemes
Under its indirect schemes, SIDBI extends refinance of loans to small
scale sector by Primary Lending Institutions (PLIs) viz. SFCs, SIDCs and
Banks. At present, such refinance assistance is extended to 892 PLIs and
these PLIs extend credit through a net work of more than 65,000 branches
all over the country.
All the Schemes of SIDBI both direct and indirect assistance are in
operation in all the States of the country through 39 regional/branch
offices of SIDBI.
Promotional
and Development Activities
SIDBI is actively involved in promoting tiny and small scale industries
by means of its promotional and developmental activities through
suitable professional agencies for organising Entrepreneurship
Development Programmes, Technology Upgradation & Modernisation
Programmes, Micro Credit Schemes and assistance under Mahila Vikas Nidhi
to bring about economic empowerment of women specially the rural poor by
providing them avenues for training and employment opportunities.
SIDBI's assistance to:
(i) Tiny Units - about 89.2 per cent of the number of projects
assisted under Refinance Scheme during 1996-97 were tiny, receiving
assistance upto Rs. 5 lakh per project. The sanctions for such projects
accounted for 39.6% of the total amount of sanctions in 1996-97 as
against 36.0% during the previous year.
(ii) Women entrepreneurs - under various schemes assistance
amounting to Rs. 19.07 crores was given to 1067 women entrepreneurs
during 1996-97.
(iii) Backward areas - during 1996-97, projects enanating from
backward areas received assistance to the tune of Rs. 775 crores of
sanction which accounted for 37% of total assistance under Refinance
Scheme of SIDBI.
Measures to
simplify Rules/Regulations
- To fill the gaps in the existing structure of credit delivery
mechanism to the small scale sector, Small Industries Development Bank
of India (SIDBI) keeps on effecting simplification of procedures,
liberalisation of new schemes and introduction of new schemes.
- Endeavour of SIDBI is to ensure that no worthwhile proposal is denied
credit for want of funds.
- Norms laid down by Reserve Bank of India and Government of India are
followed by SIDBI for granting assistance to SSI units.
Liberalisation
effected
(i) Enhancement in the ceiling on loan amount of the Composite Loan
Scheme to Rs. 2 lakh from the earlier ceiling of Rs. 50,000/- to ensure
timely availability of term loan and working capital to the small units.
The scheme was also liberalised to include units in all areas other than
metropolitan areas.
(ii) Scope of Technology Development & Modernisation Fund Scheme
and Refinance Scheme for Technology Development & Modernisation has
been expanded to cover non-exporting SSIs/ancillary units graduating out
of SSI sector for assistance under the scheme.
(iii) Scope of Single Window Scheme has been enlarged to cover
modernisation, technology upgradation in addition to new SSI units.
Project outlay under the scheme has been gradually raised from s. 30
lakhs to Rs. 100 lakhs. Simultaneously, the sub-limits for working
capital and term loan components has been done away with.
Main Schemes of SIDBI
A brief summary of the Schemes available with SIDBI.
More details are available under the Section
Policies & Schemes.
National Equity Fund Scheme which provides equity support to
small entrepreneurs setting up projects in Tiny Sector.
Technology Development & Modernisation Fund Scheme for
providing finance to existing SSI units for technology
upgradation/modernisation.
Single Window Scheme to provide both term loan for fixed assets
and loan for working capital capital through the same agency.
Composite Loan Scheme for equipment and/or working capital and
also for worksheds to artisans, village and cottage industries in Tiny
Sector.
Mahila Udyam Nidhi (MUN) Scheme provides equity support to women
entrepreneurs for setting up projects in Tiny Sector.
Scheme for financing activities relating to marketing of SSI
products which provides assistance for undertaking various marketing
related activities such as marketing research, R&D, product
upgradation, participation in trade fairs and exhibitions, advertising
branding, establishing distribution networks including show room, retail
outlet, wears-housing facility, etc.
Equipment Finance Scheme for acquisition of machinery/equipment
including Diesel Generator Sets which are not related to any specific
project.
Venture Capital Scheme to encourage SSI ventures/sub-
contracting units to acquire capital equipment, as also requisite
technology for building up of export capabilities/import substitution
including cost of total quality management and acquisition of ISO-9000
certification and for expansion of capacity.
ISO 9000 Scheme to meet the expenses on consultancy,
documentation, audit, certification fee, equipment and calibrating
instruments required for obtaining ISO 9000 certification.
Micro Credit Scheme to meet the requirement of well managed
Voluntary Agencies that are in existence for at least 5 years; have a
good track record and have established network and experience in small
savings-cum-credit programmes with Self Help Groups (SHGs) individuals.
New Schemes
(i) To enhance the export capabilities of SSI units.
(ii) Scheme for Marketing Assistance.
(iii) Infrastructure Development Scheme.
(iv) Scheme for acquisition of ISO 9000 certification.
(v) Factoring Services and
(vi) Bills Re-discounting Scheme against inland supply bills of SSIs.
Major schemes
Technology Development & Modernisation Fund
SIDBI has set up Technology Development & Modernisation Fund (TDMF)
scheme for direct assistance of small sale industries to encourage
existing industrial units in the sector, to modernise their production
facilities and adopt improved and updated technology so as to strengthen
their export capabilities. Assistance under the scheme is available for
meeting the expenditure on purchase of capital equipment acquisition of
technical know-how, upgradation of process technology and products with
thrust on quality improvement, improvement in packaging and cost of TQM
and acquisition of ISO-9000 series certification.
SIDBI in July 1996 had permitted SFCs and promotional banks to grant
loans for modernisation projects costing upto Rs. 50 lakhs. The Coverage
of the TDMF scheme has been enlarged w.e.f. 1.9.1997. Non-exporting
units and units which are graduating out of SSI sector are now eligible
to avail assistance under this scheme.
National Equity Fund
National Equity Fund (NEF) under Small Industries Development Bank of
India (SIDBI) provides equity type assistance to SSI units, tiny units
at one per cent service charges. The scope of this scheme was widened in
1995-96 to cover all areas excepting Metropolitan areas, raising the
limit of loan from Rs. 1.5 lakhs to Rs. 2.5 lakhs and covering both
existing as well as new units:
(a) The following are eligible for assistance under the scheme:-
- New projects in tiny and small scale sectors for manufacture,
preservation or processing of goods irrespective of the location
(except for the units in Metropolitan areas).
- Existing tiny and small scale industrial units and service
enterprises as mentioned above (including those which have availed
of NEF assistance earlier), undertaking expansion, modernisation,
technology upgradation and diversification irrespective of location
(except in Metropolitan areas).
- Sick units in the tiny and small scale sectors including service
enterprises as mentioned above, which are considered potentially
viable, irrespective of the location of the units (except for the
units in Metropolitan areas).
- All industrial activities and service activities (except Road
Transport Operators).
(b) Project cost (including margin money for working capital)
should not exceed Rs. 10 lakhs in the case of new projects in the case
of existing units and service enterprises, the outlay on
expansion/modernisation/technology upgradation or diversification or
rehabilitation should not exceed Rs. 10 lakh per project.
(c) There is no change in the existing level of promoters' contribution
at 10% of the project cost. However, the ceiling on soft loan assistance
under the Scheme has been enhanced from the present level of 15% lakh
per project to 25% of the project cost subject to a maximum of Rs. 2.5
lakh per project.
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