Small Industries Development Bank of Indiardso.indianrailways.gov.in/works/uploads/File/SIDBI Presentation.pdfCGTMSE (2000) 23 lakh guarantees : Loans about Rs.1 lakh crore SMERA (2006)
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We empower MSMEs 1
Small Industries Development Bank of India
welcomes
The Participants for
The 1st Indian Railways – SIDBI – MSME Vendor Development Programme
August 29, 2017
SME Development Centre
Micro and Small Enterprises (MSE) in India
More than 2.6 crore units Registered / Unregistered MSEs
Provide employment to more than 6 Crore persons
Largest employment generating sector after agriculture
Employment potential at low capital cost
Constitute 95% of industrial units
Key contributors to national economy
33% of manufacturing output
45% of total exports
6% of Gross Domestic Product
We empower MSMEs
MSME Definition - MSMED Act 2006 MSMED Act 2006 – Definition of MSMEs
Investment in plant & machinery $
Micro enterprise --- Upto Rs 25 lakh
Manufacturing Small enterprise --- Above Rs 25 lakh upto Rs 5 cr
Medium enterprise --- Above Rs 5 cr upto Rs 10 cr
Enterprises
Investment in equipment #
Micro enterprise --- Upto Rs 10 lakh
Services Small enterprise --- Above Rs 10 lakh upto Rs 2 cr
Medium enterprise --- Above Rs 2 cr upto Rs 5 cr
$ original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No.S.O.1722(E) dated October 5, 2006
# original cost excluding land, building and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006
We empower MSMEs
About SIDBI
Constitution
• Set up under an Act of Parliament - April 1990
Shareholding
• Authorised – `1000 crore / Paid-up – ` 450 crore
• 34 shareholders – 33 (Banks, FIs and Insurance Companies in Public Sector) and Government of India.
Structure
• 15 Regional Offices,
• 81 Branches
Mandate
• Promotion, financing and development of MSME
• Co-ordinating the functions of institutions serving the sector.
Mission - To facilitate and strengthen credit flow to MSMEs
and address both financial and developmental gaps in the
MSME eco-system
We empower MSMEs
SIDBI – Apex institution for MSMEs
Addressing gaps in the MSME eco
system
Aligning with the National Agenda
Capacity building of and trying out new
financial intermediaries
to ensure outreach Innovating new
products / processes
Agency of the Govt for MSME
oriented schemes
Fulfils the objectives as Development Financial Institution (DFI) Through Credit and Credit plus services
5
SIDBI – An Institution to Empower MSMEs
We empower MSMEs
SIDBI - Apex institution for MSME in India
Credit
Indirect Finance
Direct Finance
Micro finance
Credit Plus
Enterprise promotion/ skill development
Management Development
Cluster Development
Marketing Support
Policy advocacy
Credit Advisory
Institutional solutions
SVCL- Venture Capital
SMERA- SME Rating
CGTMSE – Collateral Free
Lending
ISTSL-Technology Transfer
ISARC – Asset Reconstruction
MUDRA – Funding the Unfunded
We empower MSMEs
Indirect Intervention :
through subsidiaries / associates
SIDBI
ISTSL (1995) Energy Efficiency - project reports,
Carbon credit for MSMEs
SVCL (1999)
Managing 7 VC funds of
Rs.1902 crore,
CGTMSE (2000)
23 lakh guarantees : Loans about Rs.1
lakh crore
SMERA (2006)
Over 38000 MSME ratings
INDIA’s first and only rating agency
for MSMEs
ISARC (2009)
Portfolio under management over
Rs.381 crore
NCGTC (2014) - to provide credit guarantee for loans for skill development, education, factoring, PMMY and Stand-up India.
MUDRA (2015) to fund the unfunded – Corpus Rs 20,000 cr & Credit Guarantee Cover – Rs 3000 cr
We empower MSMEs
Climate change / Cleaner Environment
• Sustainable Finance - Special Schemes on Energy Efficiency / Cleaner
environment - Zero Defect and Zero effect solutions
Start Up India / Stand up India
• Piloted Start Up Assistance Scheme – Direct intervention
• Funding Start ups through Venture Funds
• Supported Incubation Centres (IIT-K, KIT etc.)
• TIFAC –SIDBI Technology Innovation programme
Make in India
• SMILE scheme and Make in India Fund
Digital India
• Initiatives up for Web based platforms / solutions connecting stakeholders
• www.standupmitra.in & www.udyamimitra.in
Financial Inclusion – Funding the unfunded
• MUDRA and Micro Finance Initiatives
• Poorest State Inclusive Programme [PSIG]
SIDBI : Innovative Initiatives
We empower MSMEs 9
SIDBI provides for various types of Fund Based schemes like:-
• SMILE Scheme
• Financing Schemes for Sustainable Development
• Growth Capital & Equity Assistance Scheme
• Service Sector Assistance
• Privilege Customer Schemes (for existing customers with
excellent track record)
• Secured Business Loan
• Receivable Finance Scheme
Schemes may be viewed on SIDBI Website (www.sidbi.in ).
SIDBI : Schemes for MSMEs
SME Development Centre
10
Purpose A corpus of Rs.10000 crore to provide soft loan in the nature of quasi
equity and term loan relatively on soft terms to MSMEs to meet the
required debt–equity ratio for establishment of MSME.
Form of assistance Term Loan & Soft Loan (in form of quasi equity)
Tenure Upto 10 years
Interest rate
(for initial 3 years)
Soft Loan : 8.95% p.a.
Term Loan : 9.45% to 9.60% p.a. (Depending on Internal Rating)
For Women/
SC/ST/PWD
Soft Loan : 8.90% p.a.
Term Loan : 9.45% to 9.55% p.a.
Security Flexible, including collateral free lending for loans up to Rs. 1 crore
under CGTMSE
Benefits • Lower Promoter’s Contribution required : 15% of project cost for
projects up to Rs. 1 crore and 20% for the rest subject to DER of 2.5
:1
• Reduced Rate of Interest and Lower Upfront Fee : 0.50%
SIDBI Make in India Fund for
Micr, Small and Medium Enterprises (SMILE)
SME Development Centre 11
Automobiles Automobile Components Aviation
Biotechnology Chemicals Construction
Defence Manufacturing Electrical machinery Electronic systems
Food Processing IT and BPM Leather
Media and entertainment Mining Oil and Gas
Pharmaceuticals Ports Railways
Renewable Energy Roads and Highways Space
Textile and Garments Thermal Power Tourism and Hospitality
Wellness Others
Make in India – 25 Sectors
We empower MSMEs
TIFAC- SIDBI Revolving Fund for Technology Innovation
(Srijan Scheme)
Fund TIFAC –SIDBI Revolving Technology Innovation Fund - Rs 30 cr
Scheme
Objective
Development, up-scaling, demonstration and commercialization of innovative
technology based projects by MSMEs. The Scheme will provide developmental
loan at flexible terms & interest rate to encourage / promote development /
innovation of new technology / process / product and its commercialization.
Eligible
customers
New / existing MSME units.
Quantum of
assistance
Upto 80% of the project cost subject to maximum of Rs.100 lakh.
Higher assistance could be considered selectively based on innovation content
in the projects.
Rate of Interest Not more than 5% p.a.
Repayment
Period
Not more than 6 years. Repayment flexible & would depend on Cash Flow
We empower MSMEs 13
Eligible
Project Cost
• Capital expenditure [land, building, plant & machinery, MFA, etc.]
• Intangibles– patents/ copy rights / R&D / purchase of technology
• Pre-op. expenses / IDC period / Working capital margin
• Marketing / brand building expenses
• Contingencies /Any other head required for the project
Operational
Methodology
Prospective customer to submit preliminary information about the
project / innovative technology in the format given
Info to be considered by a Project Recommending Committee (PRC).
PRC will carry out technical & financial screening and would
recommend the project to SIDBI for carrying out the detailed
financial appraisal.
Projects cleared by PRC shall be taken up for detailed financial
appraisal.
Project Approval Committee (PAC) to sanction proposals.
(Srijan Scheme…….contd.)
We empower MSMEs
Risk Capital Scheme Objective & Purpose –
• To provide growth capital to deserving MSMEs for:
• Bridging the gap in the means of finance for expansion/ modernization/ scaling up.
• New businesses/ diversification by entrepreneurs with established track record can be considered, selectively.
• Intangibles or non-asset creating investments, viz, product development, marketing related expenditure, R&D, investments in quality control, energy efficiency equipment, etc.
• Margin money for working capital or working capital on selective basis
• Any other bonafide expenditure required for growth of the business
Non Participative debt based products
Subordinated Debt
Fixed coupon
7 yr repayment
3 yr moratorium
Participative debt products
Sub debt/ debt or debentures with
Conversion options
Royalty features
Equity kickers
Equity based products
Optionally Convertible
Cumulative Preference
Shares
Equity
We empower MSMEs
Receivable Finance (Physical discounting to TReDS)
SIDBI – Pioneered the product
• MSMEs (particularly Ancillaries) face cash flow problems due to delayed
sales realization and collections from large corporate buyers
• Scheme enables MSMEs get payment immediately at competitive rate
based on the credit profile of the corporate buyers.
• More than 22000 MSMEs registered / Cumulative disbursements more
than Rs. 1 lakh crore.
SIDBI – set up NTREES platform (Web based platform)
– [Trade Receivables Engine for E discounting –Prefix N for NSE and suffix
S for SIDBI] Set up based on ‘Nafin’, Mexico model
– Reverse factoring Technology platform with multiple banking
– 15 corporates initially with >200 MSMEs on the platform
We empower MSMEs
TReDS • TReDS is a digital platform for MSMEs to auction their trade receivables at
competitive rates through online bidding by Financiers
• Settlement through NPCI’s “National Automated Clearing House” supports many-to-
many situation. Reversal of unsettled transactions handled automatically and resolves
issues related to reconciliation of payments.
• RXIL setup as a joint venture of SIDBI & NSE to operate TReDS Exchange
• Received in-principle approval from RBI on December 2, 2015
• Exchange started operations on January 09, 2017 after final approval from RBI
• Successfully executed financing of trade receivables of MSMEs
• NPCI NACH Debit & Credit Settlement processed successfully for both financing and
repayment legs
About RXIL
We empower MSMEs
www.standupmitra.in - The platform acts as a single window for application filling and tracking under Stand Up India Loans as well as provides the facility for choice of branches/ banks for credit assistance. The portal tracks individual applications and also facilitates the overall handholding process.
www.udyamimitra.in - The portal provides access to 1.32 lakh bank branches and 17,500 plus hand-holding agencies who assist in filing of applications, financial training, skill training, mentoring, access to margin money, subsidy, etc.
www.sidbistartupmitra.in - The main objective is to bring all the stakeholders in the startup eco system viz; start up entrepreneurs, incubators, investors (angels/ Venture Capital Funds), advisors, industry bodies and Banks together through the electronic platform and to serve as a single window for providing solutions to the early stage and start ups.
www.smallB.in – The portal is a virtual mentor and handholding forum for the potential / budding and even existing entrepreneurs to set up new units and grow the existing ones.
SIDBI’s Fintech Interventions
SME Development Centre
Stand Up India Scheme
www.standupmitra.in
We empower MSMEs
Stand Up India - Inclusive Credit Access
Collateral free credit - NCGTC
Credit Dispensation through Banks
Credit Ready Potential
entrepreneurs
Support for Monitoring
Credit Facilitation through Connect
centres
Non financial- Handholding
support
www.standupmitra.in
We empower MSMEs
Amount
• Between Rs.10 lakh and upto Rs.100 lakh (Composite Loan)
Eligibility
• SC/ST and/or woman entrepreneurs, above 18 years of age.
• Loans to green field project.
• In case of non-individual enterprises, 51% of the shareholding
and controlling stake should be held by either SC/ST and/or WE.
• Borrower should not be in default to any bank/FI
Size of loan • Composite loan of 75% of the project cost inclusive of term loan
and working capital.
• Cap would not apply if the PC along with convergence support
from any central/state margin/subsidy schemes exceeds 25% of
the project cost.
Security
• Besides primary security, the loan may be secured by collateral
security or guarantee of NCGTC as decided by the banks.
Repayment
• The loan is repayable in 7 years with a maximum moratorium
period of 18 months.
Stand Up India
www.standupmitra.in
We empower MSMEs
SIDBI UdyamiMitra
• One Stop Solution: Unique match making platform to MSME loan seekers, lenders as also handholding
agencies
• Apply and Track - Online application and real time tracking system
• Access to Finance - Any type of enterprise loans – MUDRA (upto Rs. 10 lakh) Stand-Up India Scheme
for SC/ST and Women- Rs.10 lakh to Rs.100 lakh, SME loans (presently upto Rs.100 lakh)
www.udyamimitra.in
We empower MSMEs
SIDBI is one of the Nodal Agencies implementing the subsidy schemes
launched by various Ministries of GOI. Brief details are :
1. CLCSS / Special CLCSS - Credit Linked Capital Subsidy Schemes for MSEs by Ministry
of MSME
2. TUFS - Technology Upgradation Fund Scheme for Textile units by Ministry of Textile.
3. IDLSS - Integrated Development of Leather Sector Scheme for leather sector units by
Department of Industrial Policy & Promotion & Policy under the aegis of Ministry of
Commerce and Industry.
4. FPTUFS - Scheme of Technology Upgradation /Setting up/ Modernisation /Expansion
of Food Processing Industries [FPTUFS] by Ministry of Food Processing Industries.
5. TEQUP - Technology and Quality Upgradation Programme to MSME by Ministry of MSME
Government sponsored subsidy Schemes
We empower MSMEs 23
Thank You
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