The Small Industries and Development Bank of India-SIDBI aims to increase cash flow through the MSME Sector by promoting and developing it to benefit society and the national economy. This bank promotes, commercializes, and markets new ideas and develops small-scale businesses by funding and tailoring loans to improve the functioning of MSMEs. In this blog, let us delve deep into various aspects of SIDBI MSME schemes.
Everything You Need to Know About SIDBI
Mission and vision
The mission and vision of the SIDBI, which was founded on 2nd April 1990, is to close the growth and financial gaps of small and medium-sized enterprises and to facilitate their cash flow. It emerges as a single point of contact for meeting the financial needs of MSMEs, making them customer-friendly and globally competitive organizations. As a result they are helpful in coordinating operations and enhancing wealth creation of businesses thereby promoting technological advances in the business sector.
Objectives
SIDBI emphasizes the four main goals and purposes listed below:
- Promotion of customer service and sector viability
- Development of the SME sector
- Management and coordination
- Offering various tailored loans to assist MSMEs’ growth
Benefits
Numerous advantages are linked to SIDBI. They are:
- SIDBI satisfies the specific loan requirements of any business.
- The loans are granted depending on the size of the business.
- SIDBI provides concessionary and attractive interest rates through lucrative partnerships with banks and numerous other financial institutions, such as the Japan International Cooperation Agency and the World Bank.
- It assists MSMEs with loan applications and provides financial advice.
- It supplies up to 100 lakhs in unsecured financing.
- It contributes to enterprises’ overall growth and development.
- SIDBI Venture Funding is a subsidiary focusing on developing micro, small, and medium-sized enterprises (MSMEs) via equity and venture capital funds.
- Financial and decision-making support for micro, small, and medium-sized enterprises (MSMEs) is provided through various SIDBI schemes with relaxed terms and reduced interest rates.
- There are no hidden fees, and the entire procedure is transparent.
Functions
SIDBI provides service sectors, MSMEs, as well as other small-scale industries (SSI) with loans and financial assistance. It offers finance plans for sustainable development. This involves the conservation of energy in SMBs. The other functions of SIDBI are:
- Receivable Financing Programme
- SIDBI Revolving Fund for TIFAC
- SIDBI Funding for Modernization or Upgradation
- It offers loan options through regularized banks, like NBFCs – Non-Banking Financial Corporations, SFCs – State Finance Corporations, and various other financial institutions
- It improves credit flows and develops skills across MSMEs
- It also assists banks in ensuring the financial health of industries
- Extensive advertising and marketing initiatives are implemented
- Supports employment by offering numerous employment opportunities.
- Finances for development, expansion, reorganization, maintenance, renovation, and other purposes
- Ensures the rigorous and thorough financial stability of different industries, thereby improving and consolidating the economy of the state and nation and, ultimately, increasing the people’s living standards
Elaborating on the SIDBI Schemes for MSME
SIDBI offers direct loans that have been extensively available to SMEs. They are:
- SMILE – SIDBI Make in India Soft Loan Fund for Micro, Small, and Medium Enterprises
- SEF – Smile Equipment Finance
- Loans under Partnership with OEM
- STFS – SIDBI Trader Finance Scheme
- Cash Credit (Working Capital)
- TULIP – Top-up Loan for Immediate Purposes
- SPEED – Loan for Purchase of Equipment for Enterprise’s Development
- SPEED PLUS – Loan for Purchase of Equipment for Enterprise’s Development PLUS
- RLS – SIDBI – Retail Loan Scheme for Trade Finance
- STAR – SIDBI Term-loan Assistance for Rooftop Solar PV Plants
- SAFE – SIDBI Assistance to Facilitate Emergency Response Against Coronavirus
- SAFE PLUS – SIDBI Assistance to Facilitate Emergency Response Against Coronavirus Plus
Comprehending these things thoroughly:
SMILE – Make in India Soft Loan Fund provides loans for new enterprises with an initial loan amount of Rs. 10 lakhs for equipment financing and Rs. 25 lakhs for other purposes. The repayment period is ten years, including the thirty-six-month moratorium.
SEF – SMILE Equipment Finance provides competitive interest rates, a repayment period of 72 months, and a minimum loan amount of Rs. 10 Lakhs for the procurement of new equipment.
Loans under Partnership with OEM – The scheme can help MSMEs acquire instruments and equipment from OEMs with a loan of up to Rs. 1 crore. The minimum business duration is three years, and the loan repayment period is sixty months.
STFS – SIDBI Trader Finance Scheme is available to MSMEs with a minimum tenure of three years, satisfactory financial performance of 10 lakhs, and a maximum of 1 crore. It has a maximum repayment tenure of sixty months.
Provides cash credit or working capital to SMEs based on their requirements.
SPEED – SIDBI provides 100% financing options of Rs 1 crore to new businesses and Rs 2 crore to existing businesses with a minimum 3-year working tenure. This loan’s repayment period ranges from two to five years and a moratorium of 3 to 6 months. The range of the yearly interest rate is 9.25 to 10%.
Also Read: Will Fintech Lending Dominate Traditional Business?
Learn How to Apply Loans to Get SIDBI MSME Schemes
The step-by-step guide to the SIDBI loan scheme application process is as follows:
- Visit the SIDBI website at sidbi.in.
- Click the ‘Borrower’s Corner’ on the page or in the menu bar.
- Visit the sidbi.in/en/borrowers-corner website.
- Click on ‘Online Loan Application’. You will be led to the enrollment page: onlineloanappl.sidbi.in/OnlineApplication/
- Select ‘Login’ or ‘Register’ and fill out the form with your information.
- Specify the loan scheme you desire to utilize and the necessary information.
- Complete the verification procedure, provide the requested information, and expect a response.
Otherwise, you also can click “Apply Now” beside each loan on the homepage. This link will take you to the online registration and authentication page, where the procedure is identical.
The takeaway
By providing tailored loans, financial assistance, and support services, SIDBI schemes for MSME contribute to the growth of the economy. They also aid with the creation of jobs, and the enhancement of living conditions. Furthermore, it functions as a dependable partner for MSMEs, enabling them to thrive and succeed in the competitive environment.
MSMEBlog advises MSMEs on how to obtain proper financing and provides information on available funding sources. Find out more about MSME financing at https://www.msmeblog.com/.
