The Small Industries Development Bank of India (SIDBI) was set up as a subsidiary of the IDBI by a special Act of the Parliament in October, 1989.
SIDBI ensures larger flow of financial and non-financial assistance to the small scale sector.
The SIDBI commenced its functioning from April 2, 1990
Head office: Lucknow
The SIDBI performs the following seven important functions:
1. Refinancing of loans and advances extended by primary lending institutions.
2. Granting direct assistance and refinance for financing exports of SSI sector.
3. Discounting and rediscounting of bills
4. Providing of factoring and leasing services
5. Extending the seed capital / soft loan assistance under National Equity Fund, Seed Capital under Mahila Udyam Nidhi Scheme.
6. Extending financial support to National Small Industries Corporation
7. Extending financial support to State Small Industries Development Corporation.
Thrust areas of SIDBI
A. Technological up gradation and modernization of SSI sector.
B. Extending the channels for marketing the products of the SSI sector, and
C. Promotion of employment oriented industries especially in semi-urban areas.
Role of SIDBI
1. Introduction of new schemes:
During 2008-09 and 2009-10, the IDBI has disbursed Rs. 2301 crores and Rs. 2685 crores respectively as direct finance for modernization and technology up gradation.
2. Working Capital Finance:
It is a new scheme launched by SIDBI.
Under this scheme, the finance is provided against the bills receivable by the SSI units for the credit sales made to big or large scale industries.
3. Refinancing :
When the banks and financial institutions provide finance to SSI sector, the SIDBI refinance it to them.
4. Resources Support to Institutions:
It is a kind of refinance provided to the organizations/ institutions which provide the resources to SSI sector on credit such as machinery, equipment, technology, raw material, technical consultancy, managerial consultancy, financial assistance, factoring etc.
5. Non-fund based facilities :
The SIDBI also provides special facility of providing Credit Guarantee Letter to SSIs to facilitate them to avail credit (loan) from banks and buy goods/ materials on credit.
6. Venture Capital Fund:
The SIDBI has launched another new scheme of Venture Capital Fund exclusively for small-scale units, with an initial corpus of Rs. 10 crores.
7. Financial Support to NSIC:
The SIDBI provides the financial support to National Small Industries Corporation for providing leasing, hire-purchase and marketing support to the industrial units in the small scale sector.
8. Disbursements to backward areas:
The SIDBI also provides the financial assistance to the SSIs established in the backward areas of the country.
The micro- finance is provided to the artisans belonging to the lowest strata of the society.