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Small Industries Development Bank of India (SIDBI) is the apex
regulatory body A regulatory agency (regulatory body, regulator) or independent agency (independent regulatory agency) is a government authority that is responsible for exercising autonomous dominion over some area of human activity in a licensing and regulati ...
for overall licensing and regulation of micro, small and medium enterprise finance companies in India. It is under the
jurisdiction Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. Ju ...
of
Ministry of Finance A ministry of finance is a part of the government in most countries that is responsible for matters related to the finance. Lists of current ministries of finance Named "Ministry" * Ministry of Finance (Afghanistan) * Ministry of Finance and E ...
,
Government of India The Government of India ( ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, ...
headquartered at
Lucknow Lucknow (, ) is the capital and the largest city of the Indian state of Uttar Pradesh and it is also the second largest urban agglomeration in Uttar Pradesh. Lucknow is the administrative headquarters of the eponymous district and divisio ...
and having its offices all over the country.The SIDBI was established on April 02, 1990 by Government of India, as a wholly owned subsidiary of IDBI Bank . It was delinked from IDBI w.e.f. March 27, 2000. Its purpose is to provide refinance facilities to banks and financial institutions and engage in term lending and working capital finance to industries, and serves as the principal financial institution in the Micro, Small and Medium Enterprises (MSME) sector. SIDBI also coordinates the functions of institutions engaged in similar activities. It was established in 1989, through an
Act of Parliament Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the legislative body of a jurisdiction (often a parliament or council). In most countries with a parliamentary system of government, acts of parliamen ...
. SIDBI is one of the four
All India Financial Institutions All India Financial Institutions (AIFI) is a group composed of financial regulatory bodies that play a pivotal role in the financial markets. Also known as "financial instruments", the financial institutions assist in the proper allocation of reso ...
regulated and supervised by the
Reserve Bank of India The Reserve Bank of India, chiefly known as RBI, is India's central bank and regulatory body responsible for regulation of the Indian banking system. It is under the ownership of Ministry of Finance, Government of India. It is responsible f ...
; other three ar
India Exim Bank
NABARD National Bank for Agriculture and Rural Development (NABARD) is an apex regulatory body for overall regulation of regional rural banks and apex cooperative banks in India. It is under the jurisdiction of Ministry of Finance, Government of India ...
and NHB. But recently NHB came under government control by taking more than 51% stake. They play a statutory role in the financial markets through credit extension and refinancing operation activities and cater to the long-term financing needs of the industrial sector. SIDBI is active in the development of Micro Finance Institutions through SIDBI Foundation for Micro Credit, and assists in extending microfinance through the Micro Finance Institution (MFI) route. Its promotion & development program focuses on rural enterprises promotion and entrepreneurship development. In order to increase and support money supply to the MSE sector, it operates a refinance program known as Institutional Finance program. Under this program, SIDBI extends Term Loan assistance to Banks, Small Finance Banks and Non-Banking Financial Companies. Besides the refinance operations, SIDBI also lends directly to MSMEs.


Non-Financial Intervention

As part of non-financial intervention in the MSME sector, SIDBI had also undertaken various measures in the past. Recently, in association with credit rating agency CRISIL and Credit Information Company TransUnion CIBIL it has introduced "CriSidEx" and "MSME Pulse". CriSidEx, India's first sentiment index for micro and small enterprises (MSEs) has been developed jointly by CRISIL & SIDBI. It is a composite index based on a diffusion index of 8 parameters and measures MSE business sentiment on a scale of 0 (extremely negative) to 200 (extremely positive). The crucial benefit of CriSidEx is that its readings will flag potential headwinds and changes in production cycles and thus help improve market efficiencies. And by capturing the sentiment of exporters and importers, it will also offer actionable indicators on foreign trade. SIDBI in association with TransUnion CIBIL launched "MSME Pulse" and Microfinance Pulse launched by Equifax, a quarterly report on MSME credit activity, for closely tracking and monitoring the MSME segment in the country. The report is based on a study done on over five million active MSMEs who have access to formal credit, with live credit facilities in the Indian banking system. SIDBI has launched the ‘Udyami Mitra’ Portal to improve accessibility of credit and handholding services to MSMEs. They can select and apply for preferred banks through this portal. Under the portal entrepreneurs can apply for loan without physically visiting any bank branches and can select from over 1 lakh bank branches, track their application status and avail multiple loan benefits. It also has facility for uploading all necessary documents. Through the portal the MSMEs can also seek handholding support for getting finance. SIDBI has also entered into an arrangement with CSC e-governance Services (CSCeGS) to take Udyami Mitra portal to the unserved and the underserved MSMEs. CSCeGS is a special purpose vehicle (SPV) set up by ministry of electronics and IT ( MeitY) which acts as connect point for various digitally aligned services to villages in the country.


Other activities

SIDBI has floated several other entities for related activities, including: *
The SIDBI Foundation for Microcredit The SIDBI foundation for Microcredit (SFMC) Background The SIDBI Foundation for microcredit (SFMC) is a department of Small Industries Development Bank of India (SIDBI) and a non-governmental organization that provides bulk loans to Microfinance i ...
* SIDBI Venture Capital Limited (SVCL) - for providing Venture Capital (VC) assistance to MSMEs; * Micro Units Development & Refinance Agency (MUDRA) - for ‘funding the unfunded’ micro enterprises in the country; * Receivable Exchange of India Ltd. (RXIL) to enable faster realisation of receivables by MSMEs; * SMERA Ratings Limited (SMERA) - for credit rating of MSMEs, renamed as Acuite Ratings & Research Limited.; * India SME Technology Services Ltd (ISTSL) - for technology advisory and consultancy services and * India SME Asset Reconstruction Company Ltd. (ISARC) for speedier resolution of Non-Performing Assets (NPA) in the MSME sector. SIDBI supports the Government of India in its initiatives and work as a nodal agency for some of the schemes related to development of MSMEs, such as Make in India and
Startup India Startup India is an initiative of the Government of India. The campaign was first announced by Indian Prime Minister, Narendra Modi during his speech on 15 August 2015. The action plan of this initiative is focussing on three areas: # Simplif ...
.


References


External links

*
Mudra Bank website
{{Banking in India Financial services companies of India Small-scale industry in India Microfinance in India Development finance institutions 1990 establishments in Uttar Pradesh Government agencies established in 1990