SIDBI is the Principal Financial Institution for the Promotion, Financing & Development of the MSME Sector in India.It stands for SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA. Its mission and vision are as follows:
SIDBI’s mission is to address both financial and developmental gaps in the MSME eco-system by facilitating and strengthening the credit flow to MSMEs.
SIDBI wants to emerge as a preferred brand and customer friendly institution for all financial and developmental needs of MSME sector in India. Also, it wants to be a Single point of contact to meet all needs of MSME Sector in India.
Loan Facilitation & Syndication Service of SIDBI:
Most of all, SIDBI facilitates Bank loans for new as well as existing manufacturing and service sector units under this initiative. Also, it has taken an initiative to become partner with Banks, Rating Agencies (RAs) and Accredited Consultants (ACs). This will help in timely consideration of loan applications through a transparent and well structured mechanism.
Benefits to MSME Entrepreneurs:
Especially relevant that the Bank Loan Process becomes easy. And, secondly, it improves the acceptance of the loan proposals by banks.
How does it Work?
- SIDBI has become partner with Accredited Consultants (ACs). Now, ACs will prepare the Basic Information Memorandum (BIM) for the MSME entrepreneurs. Offcourse, based on the information and requirements provided by the MSMEs. It will be more than a loan proposal. Also, BIM will capture all information required by the Banks and the Rating Agencies.
- ACs would be submit the BIMs to SIDBI.
- If required, SIDBI may get the proposal rated by RBI approved Rating Agencies.
- SIDBI provides Equity / Quasi- Equity for Growth Oriented existing units, Finance for Service Sector Units, and provides credit to MSMEs for Energy Efficient and Cleaner Production Processes.
- In all other cases, SIDBI will forward the application to Public Sector Banks with whom SIDBI has entered into a MoU for the purpose of Loans.
- SIDBI, in essence, will handhold the Entrepreneur through all stages of loan processing.
What will Accredited Consultants (ACs) do?
- They will guide new / existing entrepreneurs regarding availability of schemes of SIDBI / commercial banks
- ACs will inform MSMEs about Government subsidies and benefits
- They will counsel the borrowers about debt
- Very important task is to prepare Basic Information Memorandum (BIM)
- And, they will facilitate response to queries raised by banks etc.
In short, they will represent you in front of bank for your loan proposal.