The Small Industries Development Bank of India (SIDBI) has emerged as a key financial institution supporting the Micro, Small, and Medium Enterprises (MSMEs) sector through various specialised loan schemes and initiatives. With over ₹23,461 crores disbursed as of 2023, SIDBI is rewriting the narrative for MSMEs across India.
Curious about how your small business can secure the funds it needs to grow? Explore SIDBI’s innovative loan schemes, features, eligibility, benefits, and more!
What is SIDBI?
The Small Industries Development Bank of India (SIDBI) is a principal financial institution established on April 2, 1990. With its formation, SIDBI aimed to address the challenges MSMEs face in accessing timely and adequate finance, technology, and market support.
Additionally, SIDBI launched Udyami Mitra, a digital platform that leverages technology to connect entrepreneurs with various support mechanisms and resources offered by SIDBI.
Entrepreneurs can utilise the Udyami Mitra SIDBI portal to access loan information, apply online, receive advisory services, access training programs, and connect with mentors and experts.
What are the objectives of SIDBI?
SIDBI’s objective is to address the development and financial gaps in the MSME sector. By providing tailored financial solutions and support, the SIDBI scheme aims to ensure MSMEs’ global competitiveness, vibrancy, and resilience.
What are the products offered under SIDBI?
SIDBI offers a diverse range of business loan products specifically designed to meet the varied needs of MSMEs:
1. SIDBI Make in India Soft Loan Fund for MSMEs (SMILE):
i. Repayment tenure of up to 10 years.
ii. Attractive interest rates.
iii. Priority to services and manufacturing sectors.
iv. The Credit Guarantee Scheme covers loans up to Rs.2 crore.
2. SMILE Equipment Finance (SEF):
i. Minimum loan of Rs.10 lakh.
ii. Repayment tenure of up to 72 months.
iii. Loans for financially stable MSMEs operating for at least 3 years.
3. Loans under partnership with OEM:
i. Loans up to Rs.1 crore.
ii. Investment in Plant and Machinery.
iii. Repayment tenure of up to 60 months.
4. SIDBI Loan for Purchase of Equipment for Enterprise’s Development (SPEED):
i. Up to 100% financing.
ii. Quick disbursal.
iii. Repayment tenure ranging from 2 to 5 years.
5. SIDBI Loan for Purchase of Equipment for Enterprise’s Development PLUS (SPEED PLUS):
i. 100% financing for high-end machineries.
ii. Quick disbursal without collateral.
iii. Repayment tenure of 2 to 5 years.
6. Top-up Loan for Immediate Purposes (TULIP):
i. Loan sanctioned within 7 days.
ii. No collateral is required.
iii. Repayment tenure of up to 60 months.
7. SIDBI Term-loan Assistance for Rooftop Solar PV Plants (STAR):
i. Loans to reduce power bills.
ii. Loan amounts from Rs.10 lakh to Rs.2.5 crore.
iii. Repayment tenure of up to 60 months.
8. SIDBI Assistance to Healthcare Sector in War Against Second Wave of COVID-19 (SHWAS):
i. 100% finance.
ii. Competitive interest rates.
iii. The maximum loan amount is Rs.2 lakh.
9. SIDBI Assistance to MSMEs for Recovery & Organic Growth During COVID-19 Pandemic (AROG):
i. 100% finance with competitive interest rates.
ii. Low collateral requirement.
iii. The maximum loan amount is Rs.2 lakh.
10. Timely Working Capital Assistance to Revitalise Industries in Times of Corona Crisis (TWARIT):
i. Interest rate of 8.25% p.a.
ii. Repayment tenure of up to 48 months.
What are the direct loan schemes offered by SIDBI?
The SIDBI scheme offers direct loan schemes tailored to MSMEs’ specific needs and eligibility criteria. Some of them include Smile Equipment Finance (SEF), SIDBI Make in India Soft Loan Fund for MSME (SMILE), Working Capital (Cash Credit), Loans under partnership with OEM, and others.
What are the indirect loan schemes offered under SIDBI?
SIDBI provides indirect loans to financial entities such as NBFCs and scheduled banks under schemes like Assistance to NBFCs, Refinance Scheme, and Assistance to Small Finance Banks (SFBs).
How to apply for a SIDBI MSME loan?
Here’s how you can apply for a SIDBI loan:
Step 1: Visit SIDBI’s official website at https://www.sidbi.in/.
Step 2: Navigate to the ‘Loans’ section to explore the available schemes.
Step 3: Look for the SIDBI online loan application under the preferred loan product and click on ‘Apply Now.’
Step 4: Enter your enterprise’s name, email address, and mobile number registered with Udyam in the registration form, and create a password.
Step 5: Log in to the SIDBI portal again, select the desired scheme, and enter the loan amount.
Step 6: Provide essential business details such as address, district, and pin code.
Step 7: SIDBI officials will send a confirmation email to the provided address. Upon agreement, the application will proceed to evaluation and disbursement.
You’ll need to produce these documents for a business loan from SIDBI:
1. Duly filled and signed application form.
2. KYC documents for the applicant and co-applicants.
3. Business profile and project report.
4. Audited financial statements for the past three years.
5. Provisional financial statements for the current year.
6. Bank statements from the past six months.
7. Copy of Udyog Aadhaar Memorandum (UAM).
8. Copy of GST registration certificate (if applicable).
9. Consent for establishment from the Pollution Control Board (if applicable).
10. Sanction letters from other lenders (if any).
11. Proforma invoice or quotation for MSMEs looking to purchase items.
12. Any additional documents as required by SIDBI.
What are the key functions of the SIDBI MSME loan?
Apart from offering loan schemes, SIDBI performs several other functions vital for MSMEs. They include:
1. Supporting cooperative and commercial banks to strengthen the financial health of small-scale industries by lending to them.
2. Providing tailored financial assistance for equipment purchase, working capital, and expansion projects.
3. Showcasing MSME capabilities globally to access new markets and enhance competitiveness.
4. Encouraging innovation and entrepreneurship through venture funding opportunities.
5. Promoting job creation and technology adoption for improved productivity.
6. Offering career opportunities in various roles within the MSME sector.
7. Offering loans for infrastructure, capacity expansion, and market expansion.
8. Facilitating access to venture capital for growing enterprises through SIDBI loans for startups.
Final thoughts
The SIDBI scheme offers comprehensive support to the MSME sector, empowering businesses and entrepreneurship for inclusive economic growth.
At Tata Capital, we make financing simple. With our streamlined MSME loan process and customisable options, you can easily navigate your financial goals and unlock opportunities for growth and success.
Don’t miss out on the opportunity to get additional funds at attractive interest rates, comfortable tenures, and easy documentation– visit the Tata Capital website or download the Tata Capital App and get started with us today!
The details mentioned in this blog may change from time to time and from vendor to vendor or government policies.
11 March 2024
6 mins read
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