SIDBI - Addressing Both Financial And Developmental gaps In The MSME Ecosystem

Sarika Anand Sarika Anand
Jun 2, 2021 8 min read
SIDBI - Addressing Both Financial And Developmental gaps In The MSME Ecosystem

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Small business owners and entrepreneurs in India's underdeveloped areas can get loans, credit, insurance, access to savings accounts, and money transfers via microfinance. Many who do not have conventional financial capital profit from microfinance.

Small Industries Development Bank of India (SIDBI) is a non-profit financial institution dedicated to assisting India's micro, small, and medium-sized businesses in their growth and development.

SIDBI - Company Highlights

Startup Name Small Industries Development Bank of India
Headquarters Lucknow, Uttar Pradesh, India
Industry Commercial Bank, Regulatory Body
Jurisdiction Ministry of Finance, Government of India
Formed April 1990
Agency Executive Siva S Ramann
Website www.sidbi.in

Sidbi - Latest News
About Sidbi and How it Works?
Sidbi - Mission and Vision
Sidbi - Name, Logo and Tagline
Sidbi - Founder and History
Sidbi - Products and Services
Sidbi - Revenue and Growth
Sidbi - Investments
Sidbi - Competitors
Sidbi - Awards and Achievements
Sidbi - Future Plans
Sidbi - FAQs

Sidbi - Latest News

As of May 2021, SIDBI is hiring IT experts, including a Chief Technology Officer.

SIDBI, which panders to the funding needs of micro, small, and medium enterprises, stated that it aims to promote and improve the flow of credit to such businesses and resolve both economic and technological gaps in the MSME ecosystem. The Small Industries Development Bank of India (SIDBI) will employ information technology professionals on a contract basis, including a chief technology officer (CTO), to improve customer service in the face of technology's growing importance.

About Sidbi and How it Works?

The Small Industries Development Bank of India (SIDBI) is India's apex regulatory authority for microfinance institution regulation and certification. It is governed by the Ministry of Finance of the Government of India, which is based in Lucknow and has offices around the country. SIDBI is a commercial bank established in Lucknow, Uttar Pradesh, India.

Small Industries Development Bank of India is a wholly-owned subsidiary of the Industrial Development Bank of India, which was founded under a special Act of Parliament in 1988 and went into effect on April 2, 1990. The bank provides services such as promoting, financing, and developing the micro, small, and medium-sized firm sector, as well as coordinating the functions of institutions involved in similar activities.

Its objective is to provide refinancing and short-term lending to businesses, and it is the MSME sector's primary financial institution. SIDBI also manages the functioning of organizations that do similar tasks. The bank provides debt funding to small and medium-sized businesses in the form of loans. Beverages, meals, banking institutions, financial institutions, industrial, mechanical, and electrical parts, database software, cloud computing, E-commerce, and many more industries are served by the bank.

Through the SIDBI Foundation for Micro Credit, SIDBI is actively involved in the creation of Micro Finance Institutions and assists in the extension of microfinance through the MFI method. Its promotion and development program focuses on the promotion of rural businesses and the development of entrepreneurship.

It runs a refinance program called Institutional Finance with the aim to expand and support money supply to the MSE sector. SIDBI assists Banks, Small Finance Banks, and Non-Banking Financial Companies with Term Loans through this program. SIDBI lends directly to MSMEs, in addition to refinancing operations.

Functions of SIDBI :

  • The SIDBI refinances loans made to small businesses by banking institutions.
  • Assists in the expansion of marketing channels for Small Scale Industries' products.
  • It provides small-scale businesses with services like factoring and leasing.
  • In semi-urban areas, promotes employment prospects in small-scale industries.
  • Starts the process of upgrading technology.
  • Allows credit to flow to Small Scale Industries as working capital or term loans.

Sidbi - Mission and Vision

SIDBI's mission statement says "To facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system"

SIDBI's vision statement says, "To emerge as a single window for meeting the financial and developmental needs of the MSME sector to make it strong, vibrant and globally competitive, to position SIDBI Brand as the preferred and customer - friendly institution and for enhancement of share - holder wealth and highest corporate values through modern technology platform."

Sidbi - Name, Logo and Tagline

SIDBI stands for Small Industries Development Bank of India.

Sidbi' s Company Logo
Sidbi' s Company Logo

Sidbi - Founder and History

The Small Industries Development Bank of India (SIDBI), established on April 2, 1990, by an Act of the Indian Parliament, serves as the primary financial institution for the promotion, financing, and development of the Micro, Small, and Medium Enterprise (MSME) sector, as well as for the coordination of functions of institutions engaged in similar activities. Β 

SIDBI's activities have stayed committed to the national goals of poverty reduction, job creation, and entrepreneurial development in the MSME sector. The following are significant landmarks in SIDBI's history:

  • Founded in 1990;
  • Microfinance foundation built-in 1994;
  • Technology bureau for small enterprise (TBSE) established in 1995, which later became India SME technology services.
  • SIDBI venture capital limited;
  • Credit guarantee fund trust for micro and small enterprises;
  • SMERA rating ltd.
  • India SME Asset Reconstruction Company Ltd., founded in 2008. (ISARC)
  • Setup MUDRA in 2015
  • 2016 - Trade receivables discounting system (TReDS)
  • In 2017, a certified credit counselor was established (CCC)
  • Launch of MSME pulse and CriSidEx in 2018

Sidbi - Products and Services

SIDBI is a non-profit organization that manages and finances the different organizations involved in the development of small businesses. SIDBI runs a refinance program in which it provides term loan assistance to banks, small finance banks, and non-banking financial firms in order to sustain the money supply.

SIDBI's 16.73 percent holding, which is the largest individual holding, is held by the State Bank of India. The following are some of SIDBI's additional services:

  • Small-scale industry refinancing (SSI)
  • It provides aid with SSI import and export.
  • It offers SSI with seed cash and low-interest loans.
  • SIDBI assists with factoring, leasing, and HP financing, among other things.

Sidbi - Revenue and Growth

Sidbi, increased its net profit by 9% to INR 630 crore in the quarter ended December 20 from INR 578 crore the year before.

SIDBI received a liquidity support of INR 15000 crore from the Reserve Bank of India in April as a special refinance facility at the repo rate in April 2021 to deal with MSME funding during the pandemic, in addition to the government's drive for MSME financing. From INR 816 crore in Q3'FY'20 to INR 840 crore in Q3'FY'21, the company's net interest income increased by 3% .

β€œThe credit growth to the MSME sector has been strong despite the impact of the COVID-19 pandemic and this has helped us to achieve encouraging financial performance with a boost to our loan book" said, V Satya Venkata Rao, deputy managing director, Sidbi. "We have also managed to keep our asset quality under check by. Our focus will be on sustaining the growth and scalability with various measures targeted towards recovery and strengthening of the MSME ecosystem.”

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Sidbi - Investments

Date Organization Name Round Amount
Mar 30, 2021 Annapurna Microfinace Private Equity Round $30M
Jul 10, 2019 Capital Small Finance Bank Private Equity Round β‚Ή430M
Aug 24, 2018 Fincare Private Equity Round β‚Ή950M
Oct 18, 2017 Capital Small Finance Bank Venture Round β‚Ή243.5M
Aug 28, 2017 FieldAssist Debt Financing -
Aug 1, 2017 Clusterzap Seed Round $150K
Mar 7, 2017 Fincare Private Equity Round β‚Ή5B
Sep 30, 2016 Utkarsh Micro Finance Venture Round β‚Ή4B
Dec 22, 2015 RCI Cash Management Series A -
Jul 30, 2015 Pragmatix Services Venture Round $2.4M

Sidbi - Competitors

The top 10 competitors in SIDBI's competitive set are moolya, LetsVenture, ah! Ventures, Startups.co, GREX Alternative Investments Market Pvt. Ltd., BitGiving, Applyifi , Equity Crest, TermSheet, Smergers, Startify, Catapooolt and Gust.

Sidbi - Awards and Achievements

From time to time, SIDBI has received a number of international prizes and honors. Several of SIDBI's models are being copied more and more these days (i.e. MFI led inclusive growth, community linked financing model, Industry Association-BMO- led financing model, participatory development approach, cluster development - both hard infrastructure development support as also Making Market Work For MSMEs through business development service).

SIDBI was named the winner of the SABERA – Social and Business Enterprise Responsible Award 2020 in two categories: "Most Innovative Development Sector Project" and "Responsible Business of the Year."

SIDBI's responsive, inclusive, and impact-oriented activities for instilling entrepreneurship culture under Mission Swavalamban were recognized with this award. It also looked at creative approaches/initiatives that enhance the enterprise ecosystem and ease access to financial and non-financial services for entrepreneurs in India via digital bouquet offers.


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Sidbi - Future Plans

In light of the growing role of technology, the Small Industries Development Bank of India would engage information technology specialists on a contract basis, including a chief technology officer (CTO). SIDBI, which provides funding for micro, small, and medium-sized businesses (MSMEs), stated that its goal is to improve and enhance credit flow to MSMEs while also addressing financial and developmental gaps in the MSME ecosystem.

Sidbi - FAQs

What does SIDBI do?

The bank provides services such as promoting, financing, and developing the micro, small, and medium-sized firm sector, as well as coordinating the functions of institutions involved in similar activities.

When was SIDBI founded?

The Small Industries Development Bank of India (SIDBI) was established on April 2, 1990.

What are the objectives of SIDBI?

To boost the marketing of small-scale industry products. Upgrade technologies while also doing small-scale unit upgrading. To provide additional financial help to the ancillary and smaller industry on a small scale. To promote sectors that provide jobs.

What companies do SIDBI compete with?

The top 10 competitors in SIDBI's competitive set are moolya, LetsVenture, ah! Ventures, Startups.co, GREX Alternative Investments Market Pvt. Ltd., BitGiving, Applyifi , Equity Crest, TermSheet, Smergers, Startify, Catapooolt and Gust.

Is SIDBI a subsidiary of IDBI?

Yes, SIDBI is a subsidiary of IDBI.

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