SIDBI, Hyderabad Regional Office

Small Industries Development Bank of India has been established under an Act of the Parliament in 1990. SIDBI is mandated to serve as the Principal Financial Institution for executing the triple agenda of promotion, financing and development of the Micro, Small and Medium Enterprises (MSME sector) and co-ordination of the functions of the various Institutions engaged in similar activities. Over the years, through its various financial and developmental measures, the Bank has touched the lives of people across various strata of the society, impacted enterprises over the entire MSME spectrum and engaged with many credible institutions in the MSME ecosystem.

Keeping in sync with the evolving MSME landscape, SIDBI embraced SIDBI Vision 2.0, to redefine its role as an All India Financial Institution that can create an integrated credit and development support ecosystem for MSMEs, by being a Thought Leader, adopting a creditplus approach, creating a multiplier effect and serving as an aggregator, in the MSME space.

To serve the sector, the Banks footprint spreads across the country, indirectly through various partner institutions and directly through 10 Regional Offices, 82 Branch Offices and Resident Representative Offices, 6 Express Loan Service Centres and 7 Specialized Asset Recovery Branches.

The MSME financing agenda of the Bank is discharged through the twin interventions of –

(i) Direct Lending, disseminated through demonstrative lending products to fill existing credit gaps, which could be further scaled up by banking eco-system. Direct Lending operations have been reinvigorated by introducing new credit delivery models, enlarging product bouquet, simplification of processes and ensuring faster credit delivery to serve MSMEs in a more effective manner.

(ii) Indirect Lending is done through Banks, NBFCs, New Age Fintechs, SFBs and MFIs, which creates a multiplier effect and provides a larger reach. Under Indirect Lending, the Bank is focusing on high quality NBFCs, MFIs, SFBs and Public sector Banks, who are also champions of MSME credit, so as to have a quality multiplier effect in coverage of MSMEs.

The Bank supports the entrepreneurship promotion agenda by extending venture capital assistance to start-ups through its Fund-of-Funds operations.

Worth mentioning is the widely acknowledged pioneering role of SIDBI in furthering the inclusive agenda through supporting the Micro Finance movement. The debt and equity support to MFIs is well complemented by capacity building support to these institutions and imbibing the corporate governance culture by supporting Compliance Assessmen Tools etc. Apart from handholding the Micro Finance industry from fragile moorings to a full-fledged industry segment, culminating in the transition of 9 of our partner MFIs into SFBs/ Universal Banks. A path breaking initiative in Micro Lending is PRAYAAS scheme, under which the Bank provides small loans directly (through partnership arrangements), at interest rates which are substantially lower than the market rates.

Being the DFI for the MSME sector, the Bank furthers the agenda by channelizing the benefits of various Govt schemes. Various National Missions like Make in India, Stand-up India etc. are bolstered by the Bank, by dovetailing them through its own products and initiatives. The Bank has been assigned the nodal agency role by the Government of India for implementing various Government subsidy schemes viz Interest Subvention Scheme, Partial Credit Guarantee, CLCSS, TUFS, IDLSS, FPTUFS and TEQUP.

Promotional and Developmental initiatives of the Bank are undertaken under the four guiding themes of Sampark, Samwad, Suraksha, Sampreshan (4S), under umbrella mission Swavalamban, to address various non-financial challenges of the MSME sector. Under mission Swavalamban, the Bank has undertaken a slew of initiatives to handhold and support aspiring entrepreneurs in their journey to become job creators and has deeply engaged with stakeholders to connect micro-entrepreneurs to formal channels of inclusive growth.

Information Asymmetry in the sector is an area where SIDBI has spearheaded various structural initiatives like “MSME Pulse”, the health tracker of MSMEs and “CriSidEx”, for gauging the MSE sentiments and aspirations, “Fintech Pulse” which aims to bring out how emerging technologies are causing disruption in the financial sector, “Industry Spotlight”, to name a few. The initiatives also aim at providing directional support to policy makers.

To provide robust financial infrastructure, thereby leading to increase in financial inclusiveness, SIDBI along with five other PSBs has developed online lending portal “psbloansin59minutes”, which provides in-principal approvals to eligible loans within 59 minutes. “Udyamimitra portal” of the Bank is a comprehensive digital platform for MSME aspirants to access credit has 380+ lenders and 8.75 lakh+ registrations. Further, to address the issue of delayed payments to MSMEs, RXIL was established in 2016, as SIDBINSE joint venture for operating the MSME online Trade Receivables Discounting Platform (TReDS). RXIL has registered base of 1,787 MSME Vendors, 489 Buyers and 35 financiers as on March 31, 2020. Other key notable digital initiatives include Asset Restructuring Module- ARM-MSME, automated/ online Do-it-Yourself web-portal for MSMEs to self-create their restructuring proposal/ financial viability projections and MSME Saksham, Joint credit awareness initiative of SIDBI & TransUnion CIBIL to enable the MSMEs to be loan-ready.

Over the years, SIDBI has emerged as an ‘Institution builder’ to strengthen the MSME ecosystem and to address their varied needs. Accordingly, It has set up SVCL to provide Venture Capital & Growth Capital to promote knowledge-based MSMEs, MUDRA for upscaling of ‘funding the unfunded’, ACUITE Ratings & Research to provide comprehensive and transparent ratings to MSMEs, ISARC for quicker resolution of NPAs in MSME sector, CGTMSE now branded as UDAAN to provide credit guarantee for MSE borrowers and ISTSL to offer technology, advisory and consultancy services for Energy Efficiency and other projects.