SIDBI - Small Industries Development Bank of India

MSMEs are the backbone of the Indian economy contributing to the economic and social development of Indian communities. These enterprises often face challenges to growth due to limited access to adequate funds. The Small Industries Development Bank of India, or SIDBI is a financial institution that exists to address the financial challenges of MSMEs. SIDBI provides financial support for the development and growth of Micro, Small, and Medium enterprises (MSMEs).

SIDBI offers direct financial assistance, indirect financial assistance, and financial assistance through various schemes. Offering MSMEs the opportunities to increase production, modernise their technologies, or pay off existing loans through refinancing. SIDBI also offers aid through schemes for the ‘Make in India’ campaign to increase home manufacturing and job creation.

Table of Contents:

• ⇾ Financial Services Offered by SIDBI
• ⇾ SIDBI Machinery Loan
• ⇾ SIDBI Green Finance Loan
• ⇾ SIDBI Project Loan
• ⇾ SIDBI Working Capital
• ⇾ SIDBI Loan Schemes
• ⇾ SIDBI Make In India Loan for Enterprises
• ⇾ SMILE Equipment Finance
• ⇾ Loans under the partnership with Original Equipment Manufacturer
• ⇾ SIDBI Loan for Purchase of Equipment for Enterprise’s Development (SPEED)
• ⇾ SIDBI-Loan for Purchase of Equipment for Enterprise’s Development Plus (SPEED PLUS)
• ⇾ Top-Up Loan for Immediate Purposes (TULIP):
• ⇾ SIDBI Term-loan Assistance for Rooftop Solar PV Plants:
• ⇾ SIDBI Assistance To Facilitate Emergency Response to Coronavirus:
• ⇾ SIDBI Assistance to Facilitate Emergency Response Against Coronavirus Plus (SAFE PLUS)
• ⇾ Timely Working Capital Assistance To Revitalise Industries In Times Of Corona Crisis (TWARIT):
• ⇾ Role of SIDBI Small Industries Development Bank of India
• ⇾ Apply For a Business Loan with the Best Rates
• ⇾ Frequently Asked Questions

Financial Services Offered by SIDBI

SIDBI bank offers various financial services and schemes to ensure that funding is accessible to MSMEs. Businesses can access credit for working capital needs, purchase machinery, provide foreign currency loans for import, refinancing, and more. SIDBI, Small Industries Development Bank of India offers the following loans and schemes.

SIDBI Machinery Loan

Outdated machines can slow down production thereby reducing the market growth of the MSMEs. To speed up the production process, the SIDBI offers MSMEs two types of machinery loans; Express loan and SPEED loan.

• Express Loan: The SIDBI Express loan offers MSMEs a quick machinery loan through an automated process by taking into account the GST returns, Income Tax returns, Bank statements, and CIBIL score.

The eligibility requirements include:

• MSMEs that have been in operation for at least 3 years.
• They should have Udyam and GST registration.
• They should also not have defaulted on any loan taken from a bank or financial institution.

Here are the details of the loan:

Loan amount	Up to ₹1 Crore with immediate in-principle offer.
Financing	Up to 100% along with 25% security in FD
Processing fee	0.50% + GST
Interest rate	Linked to MCLR rate
Tenure	60 Months



• Speed Loan: The SIDBI speed loan is financial assistance for MSMEs to be able to purchase plant, machinery, and miscellaneous fixed assets. SIDBI also offers credit for purchasing second-hand or refurbished machines as long as they comply with the bank’s guidelines.

The eligibility criteria are:

• The enterprises should be in operation for at least 3 years.
• They should have been getting cash profit for the last 3 years.
• There should be no previous loan default with the bank or financial institution.

The details of the loan as are follows:

SIDBI Green Finance Loan

SIDBI encourages the practice of sustainability by offering financial support through Green Finance loans. It offers loans to enterprises or industries that are dedicated to reducing their carbon footprint. There are two types of loans offered by SIDBI; the Green Finance Scheme (GFS) and the End-to-End Energy Efficiency (4E) Scheme.

• Green Finance Scheme: This is a term loan that is offered in Indian rupee or foreign currency. The scheme is eligible for the following:

Renewable Energy Service Companies (RESCOs), Energy Service Companies (ESCO), Engineering Procurement and Construction Companies (EPCs), Vendors, and MSMEs on the supply or demand side of the green value chain. The MSMEs should be providing projects or services that are related to sustainable development such as Energy Efficiency, Renewable Energy, Compressed Biogas, Water & Waste Water Management, Solid Waste Management, E-Mobility, etc.

The key features of the loan include:

The loan amount for MSMEs	Up to ₹20 Crore
Loan amount for Service Providers or aggregators	Up to ₹50 Crore
Interest rate	As per internal ratings
Tenure	7 years
Moratorium period	2 years
Security	The loan may be covered under CGTMSE, PRSF, or other risk-sharing facilities.



• End-to-End Energy Efficiency (4E) Scheme: This loan is provided to MSMEs for upgrading their machinery to be more energy efficient to increase the quality of the products to meet international standards for export, to diversify their product ranges, and to invest in research and development for better quality and unique products.

The loan offers:

Financing	Up to 80% of project cost along with availability of joint financing with EXIM bank.
Interest rate	Linked to MCLR




The loan has the following eligibility criteria:

The MSMEs should be in the manufacturing or service sectors.

• MSMEs who need Capex to transit to green fuel.
• MSMEs must be energy efficient and reduce Greenhouse Gas emissions.
• MSMEs must comply with the E&S framework provided by the bank.
• They should have been in operation for at least 1 year.
• They should not have defaulted on a loan with any banks or financial institutions.

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SIDBI Project Loan

SIDBI offers three types of loans for funding various projects; Arise, Ubharte Sitaare, and Sthapan.

• Arise: SIDBI offers Arise loans for the purchase of land, construction of factory buildings, purchase of plant and machinery, fixed assets, installation of solar panels on rooftops, and more. As well as for upgradation or expansion of MSMEs in the same line of business. The loan is eligible for:
• Enterprises that are under operation for a minimum of 2 years with audited accounts.
• Cash profit in the last audited financial results.
• The enterprises should have not defaulted with any bank of financial institution.

The features of the loan are:

Financing	Up to ₹50 Crore for a maximum of 80% of the project cost.
Interest rate	Linked to MCLR
Tenure	As per internal ratings
Tenure	7 years
Moratorium period	2 years



• Ubharte Sitaare: SIDBI offers term loans and foreign currency term loans for export-oriented MSMEs to help them diversify their products, upgrade technology, and for product research and development. It also offers technical support for mentorship, equity support, etc.



The loan offers:

Financing	Up to 80% of project cost with joint financing with EXIM bank.
Interest rate	Linked to MCLR

The eligibility requirements are as follows:

• New units can apply, however, preference will be given to promoters with experience.
• For existing small and mid-sized units that are export-oriented.
• For small and mid-sized companies that have a strategic international market entry plan.
• They should have no loan defaults with banks or financial institutions.
• Sthapan: This loan is provided for the purchase of land and construction of factory buildings, installation of solar panels on rooftops, acquisition of energy-efficient devices, etc. It is also for those enterprises who are setting up new units and greenfield projects.

The features of the loans are:

SIDBI Working Capital

SIDBI offers working capital to support MSMEs manage their cash flow. With this loan, they have the option to choose their preferred bank and get seamless approval. Two other types of loans fall under working capital; Swift and Step loans.

The eligibility criteria for a working capital loan are:

• New and existing entities who cannot get working capital loans from banks or financial institutions can apply.
• Other term loans may be taken over by SIDBI as per the lending guidelines.
• The entities should not have defaulted loans with banks or financial institutions.
• The enterprises should have not defaulted with any bank of financial institution.

• Swift: This is an overdraft facility for MSMEs with the option to choose from their preferred banks. The features of the loan include:

Financial assistance	Up to ₹3 Crore
Interest rate	Linked to MCLR
Processing fee	0.25% at processing time and 0.10% during renewal.




The eligibility includes:

• Entities having 3 years of operation.
• Should not have working capital from any other banks.
• Should not have defaults with banks and financial institutions.
• Step: This is a working capital term loan for augmenting working capital or to cover urgent confirmed orders. The loan features include:



Financial assistance	Up to ₹3 Crore for existing customers and ₹2 Crore for new customers
Tenure	3 years
Moratorium	6 months




The eligibility requirements are:

• They should have a minimum of 3 years of operations, and 2 years for Existing customers.
• They should be earning profit for the past 2 years and 1 year for Existing Customers
• They should not have defaults with Bank and Financial Institutions.

SIDBI Loan Schemes

SIDBI, Small Industries Development Bank of India offers various schemes in support of MSMEs. To help them grow and develop in the Indian economy as well as to compete in the international market. Here are the various schemes it offers:

1. SIDBI Make In India Loan for Enterprises

This scheme offers MSMEs financial support, especially to the 25 sectors that fall under the Make in India campaign. Here are the features of the scheme:

2. SMILE Equipment Finance

This scheme by SIDBI is designed to support MSMEs for the purchase of new equipment and machinery. Here are the features of the SMILE loan:

3. Loans under the partnership with Original Equipment Manufacturer

SIDBI offers a scheme to help MSMEs procure equipment more conveniently with Loans under the partnership with OEM. Here are the details:

4. SIDBI Loan for Purchase of Equipment for Enterprise’s Development (SPEED)

This scheme helps MSMEs get new machinery and upgrade their equipment. The features of the scheme are:

5. SIDBI-Loan for Purchase of Equipment for Enterprise’s Development Plus (SPEED PLUS):

This is another scheme that offers financial aid for the purchase of machinery and equipment. The features are:

6. Top-Up Loan for Immediate Purposes (TULIP):

This scheme offers financial assistance for urgent and unexpected expenses. The features are:

7. SIDBI Term-loan Assistance for Rooftop Solar PV Plants:

This scheme is a part of their sustainable development projects offering loans to entities with the goal for a greener future. The features are:

8. SIDBI Assistance To Facilitate Emergency Response to Coronavirus:

This scheme was initiated to support businesses that were impacted by COVID-19. The features of the scheme are:

9. SIDBI Assistance to Facilitate Emergency Response Against Coronavirus Plus (SAFE PLUS)

The scheme was introduced to help businesses impacted by COVID-19, here are the features:

10. Timely Working Capital Assistance To Revitalise Industries In Times Of Corona Crisis (TWARIT):

This scheme was initiated to help revive industries that were severely impacted during COVID-19, especially the MSME sectors. The features of the scheme are:

Role of SIDBI Small Industries Development Bank of India

The Small Industries Development Bank of India, SIDBI, plays an important role in bringing about the growth and development of the MSMEs. It offers the following key functions:

• Beyond Credit: SIDBI not only offers loans and schemes, it also offers refinancing loans provided by Primary Lending Institutions (PLIs) to small-scale entities. Helping them get access to credit facilities.
• Working Capital: SIDBI also provides access to working capital by discounting and rediscounting bills of exchange for MSMEs.
• Helps with expansion: SIDBI actively helps MSMEs expand their market reach both domestically and internationally. They explore export possibilities and support participation in government programs.
• Offers modernisation of equipment: SIDBI bank recognizes the importance of technological advancements to help existing MSMEs modernise their operations and upgrade their technology.
• Promotes skill development: The bank plays a significant role in acknowledging the importance of skill development for success. It offers resources and guidance to help MSMEs develop essential skills, navigate regulations, and build their capabilities.