Loan from Financial Institutions (SIDBI)

1. Direct Finance

SIDBI offers Working Capital Assistance, Term Loan Assistance, Foreign Currency Loan, Support against Receivables, equity support, Energy Saving scheme for the MSME sector, etc.

2. Indirect Finance

SIDBI offers indirect assistance by providing Refinance to PLIs (Primary Lending Institutions), comprising of banks, State Level Financial Institutions, etc. with an extensive branch network across the country. The key objective of the refinancing scheme is to raise the resource position of Primary Lending Institutions that would ultimately enable the flow of credit to the MSME sector.

3. Micro Finance

Small Industries Development Bank of India offers microfinance to small businessmen and entrepreneurs for establishing their business.

• Small Industries Development Bank of India supports eligible MSME units through refinance, credit support, and development assistance routed through participating financial institutions.
• It discounts and rediscounts bills
• It also helps expand market access for MSME products in both domestic and international markets.
• It supports MSME-oriented financial services such as factoring, leasing, and allied credit solutions, where applicable.
• It promotes employment oriented industries particularly in semi-urban areas for creating employment opportunities and thus checking relocation of people to the urban areas
• It also initiates steps for modernisation and technological up-gradation of current units
• It also facilitates the flow of working-capital and term-loan support for MSMEs in coordination with banks and other lending institutions.
• It also co-promotes state level venture funds

Step 1: Recognized consultants empanelled with the SIDBI would prepare the documents needed. Depending on the requirements and information specified by the MSMEs, the consultants would prepare a BIM (Basic Information Memorandum). This document would include all the information related to the rating agencies and banks.

Step 2: The Basic Information Memorandum is approved by MSME entrepreneur. The accredited consultants would then submit the Basic Information Memorandum to Small Industries Development Bank of India.

Step 3: In case required, the proposal would be rated by the rating agency which is approved by the Reserve Bank of India.

Step 4: SIDBI would directly handle the below-mentioned cases:

• SIDBI would offer equity or quasi-equity to the existing units that are growth-oriented
• The bank would finance units which are in the service sector
• It would offer credit to MSMEs for Cleaner Production Processes and Energy Efficient.

Step 5: For other cases, the application for the loan would be submitted to the Public-Sector Banks. SIDBI (Small Industries Development Bank of India) has an MOU (memorandum of understanding) with the public-sector banks for the issuing loans. Small Industries Development Bank of India would help the entrepreneur at each stage until the loan is finally processed. MSMEs stands a better chance of availing the loan in time and also could avoid needless delays.