• The 'District Industries Centre' (DICs) programme was started by the central government in 1978 with the objective of providing a focal point for promoting small, tiny, cottage and village industries in a particular area and to make available to them all necessary services and facilities at one place. • The District Industries Centre is the institution at the District level, which provides all the services and support facilities to the entrepreneur for setting up Micro, Small and Medium Enterprises. This included identification of suitable schemes, preparation of feasibility reports, arrangements for credit facilities, machinery and equipments, provision of raw materials and development of industrial clusters etc. • Established in 1940 • Vision is to be primary driving force of commercially sustainable industrial development . • Industrial development Corporations are companies or agencies in India which were established at various times under the policy of Government of India for the promotion of small - scale industries. • A Central Industrial Finance corporation was set up under the industrial Finance corporations Act, 1948 in order to provide medium and long term credit to industrial undertakings which fall outside normal activities of commercial banks. • The State governments expressed their desire that similar corporations be set up in states to supplement the work of the Industrial financial corporation. State governments also expressed that the State corporations be established under a special statue in order to make it possible to incorporate in the constitutions necessary provisions in regard to majority control by the government, guaranteed by the State government in regard to the payment principal. In order to implement the views Expressed by the State governments the State Financial Corporation bill was introduced in the Parliament. • Small Industries Development Bank of India (SIDBI), set up on April 2, 1990 under an Act of Indian Parliament, is the Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector and for Co-ordination of the functions of the institutions engaged in similar activities. • It was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India. • The purpose is to provide refinance facilities and short term lending to industries. Its headquarters is in Lucknow. • Former Deputy Managing Director is Shri N.K. Maini. Dr. Kshatrapati Shivaji is the new Chairman and Managing Director of the organisation.

1. 1

2. Introduction
• Small Industries Development Bank of India (SIDBI), set up on April
2, 1990 under an Act of Indian Parliament, is the Principal Financial
Institution for the Promotion, Financing and Development of the
Micro, Small and Medium Enterprise (MSME) sector and for Co-
ordination of the functions of the institutions engaged in similar
activities.
• It was incorporated initially as a wholly owned subsidiary of
Industrial Development Bank of India.
• The purpose is to provide refinance facilities and short term
lending to industries. Its headquarters is in Lucknow.
• Former Deputy Managing Director is Shri N.K. Maini. Dr.
Kshatrapati Shivaji is the new Chairman and Managing Director of
the organisation.
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3. • Beginning as a refinancing agency to banks and state level
financial institutions for their credit to small industries, it has
expanded its activities, including direct credit to the SME through
100 branches in all major industrial clusters in India.
• Recently it has opened seven branches christened as Micro
Finance branches, aimed especially at dispensing loans up to Rs. 5
lakh.
• It is an apex body and nodal agency for formulating coordination
and monitoring the policies and programmes for promotion and
development of small scale industries.
• SIDBI has also floated several other entities for related activities.
Credit Guarantee Fund Trust for Micro and Small Enterprises
provides guarantees to banks for collateral-free loans extended to
SME.
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4. History
• The Charter establishing it, The Small Industries Development Bank
of India Act, 1989 envisaged SIDBI to be "the principal financial
institution for the promotion, financing and development of
industry in the small scale sector and to co-ordinate the functions
of the institutions engaged in the promotion and financing or
developing industry in the small scale sector and for matters
connected therewith or incidental thereto.”
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5. Business Domain of SIDBI
• The business domain of SIDBI consists of small scale industrial units,
which contribute significantly to the national economy in terms of
production, employment and exports.
• Small scale industries are the industrial units in which the investment in
plant and machinery does not exceed Rs.10 million .
• About 3.1 million such units, employing 17.2 million persons account
for a share of 36 per cent of India's exports and 40 per cent of industrial
manufacture.
• In addition, SIDBI's assistance flows to the transport, health care and
tourism sectors and also to the professional and self-employed persons
setting up small-sized professional ventures.
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6. Achievements
• SIDBI retained its position in the top 30 Development Banks of
the World in the latest ranking of The Banker, London.
• As per the May 2001 issue of The Banker, London, SIDBI ranked
25th both in terms of Capital and Assets.
• Credit Guarantee Fund Trust for Micro and Small Enterprises
popularly known as CGTMSE is widely being used by many PSU
Banks and Private sector banks to fund MSME sector.
• During the year 2002-03 the aggregate sanction and
disbursements of SIDBI amounted to Rs 10904crore and Rs
6789crore respectively.
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7. Mission & Vision
• Mission:
“To empower the Micro, Small and Medium
Enterprises (MSME) sector with a view to
contributing to the process of economic growth,
employment generation and balanced regional
development”
• Vision:
“To emerge as a single window for meeting the
financial and developmental needs of the MSME
sector to make it strong, vibrant and globally
competitive, to position SIDBI Brand as the
preferred and customer - friendly institution and for
enhancement of share - holder wealth and highest
corporate values through modern technology
platform” 7

8. Objectives
• Four basic objectives are set out in the SIDBI Charter. They are:
• Financing
• Promotion
• Development
• Co-ordination
for orderly growth of industry in the small scale sector. The
Charter has provided SIDBI considerable flexibility in adopting
appropriate operational strategies to meet these objectives.
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9. The important functions performed by of
SIDBI include:
•1. To initiate steps for technological up-gradation and
modernization of existing units.
•2. To expand the channels for marketing the products
of SSI sector in domestic and international markets.
•3. To promote employment oriented industries
especially in semi-urban areas to create more
employment opportunities and thereby checking
migration of people to urban areas
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10. Products And Services
 Direct finance.
 Bills finance
 Refinance
 International finance
 Promotional & Development activities.
 Fixed deposit scheme
 Technology Upgradation & Modernisation Fund Scheme
{TDMF}
 Venture Capital Fund Scheme
 Seed Money Schemes
 National Equity Fund Scheme
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11. Direct Finance
• Since its beginning, SIDBI had been providing refinance to State
Level Finance Corporations / State Industrial Development
Corporations / Banks etc., against their loans granted to small
scale units.
• SIDBI’s direct finance schemes are:
• Scheme for expansion / diversification of small scale units.
• Scheme for specialised marketing agencies.
• Scheme for ancilaring / subcontract units.
• Scheme for existing Export Oriented Units(EOUs) to enable
them to acquire ISO 9000 series certification.
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12. Bills Finance Schemes
• Bills Finance Scheme involves provision of medium and short-
term finance for the benefit of the small-scale sector.
• Bills Finance seeks to provide finance, to manufacturers of
indigenous machinery, capital equipment, components sub-
assemblies etc, based on compliance to the various eligibility
criteria, norms etc as applicable to the respective schemes.
• To be eligible under the various bills schemes, one of the parties
to the transactions to the scheme has to be an industrial unit in
the small-scale sector within the meaning of Section 2(h) of the
SIDBI Act, 1989.
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13. Refinance Schemes
• Refinance scheme is introduced for catering to the need of funds
of Primary Lending Institutes {PLI} for financing small scale
sector.
• Under the scheme, SIDBI grants refinance against term loans
granted by the eligible PLI’s to industrial concerns for setting up
industrial projects in the small scale sector as also for their
expansion / modernization / diversification.
• Schemes of re-finance assistance:
• Scheme for SC-ST & physically handicraft persons
• Composite loan scheme
• Equipment refinance schemes.
• Schemes for small road transport operators.
• Special assistance to ex-servicemen.
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14. International Finance Schemes
• The main objective of the various International Finance schemes
is to enable small-scale industries to raise finance at
internationally competitive rates to fulfill their export
commitments.
• The financial assistance is being offered in US Dollars and Euro
currencies. Assistance in Rupees is also provided to the needy
borrowers.
• The international finance is available from pre-shipment & post
shipment credit.
• Need based limit, depending on the normal trade terms and
credit period given to overseas buyers by exporters not
exceeding 180 days.
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15. Promotional and Development Activities
• As an apex financial institution for promotion, financing and
development of industry in the small scale sector, SIDBI meets
the varied developmental needs of the Indian SSI sector by its
wide-ranging Promotional and Developmental (P&D) activities.
• The activities are as follows:
• Entrepreneurship Development Programmes.
• Management Development Programmes.
• Technology Upgradation Programmes.
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16. Fixed Deposit Scheme
Time periodTime period
Revised Annual InterestRevised Annual Interest
Rate %p.a. * w.e.f AugustRate %p.a. * w.e.f August
10, 200910, 2009
Interest (% p.a.)Interest (% p.a.)
12 months - 13 months12 months - 13 months 6.506.50
14 months - 36 months14 months - 36 months 7.007.00
14 months - 36 months14 months - 36 months 7.507.50
For SeniorFor Senior
CitizensCitizens
7.07.0
7.57.5
8.08.0
The Interest Rate Structure for SIDBI Fixed Deposit Scheme
of SIDBI are as under:
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17. Technology Upgradation & Modernization
Fund Scheme
• This fund was setup in the year 1996 by the SIDBI with an initial
capital of 200 million.
• It was setup for the purpose of encouraging the existing small
scale industrial units to modernize production facilities and adopt
improved and updated technology for strengthening export
capabilities.
• For availing benefits under this scheme the unit have to prepare
an estimate for modernization & submit it to SIDBI.
• The sanction of funds is made depending upon the estimate
submitted. 17

18. Venture Capital Fund Scheme
• SIDBI is participating in the Venture capital fund set by public
sector institutions as well as private companies to the extent of
Rs,50,00,000 of total capital of the fund required.
• The fund should be dedicated to financing small industry
preferably the most risky one.
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19. Seed Money Schemes
• One of the constraints faced by Entrepreneurs is the lack of own
resources to promote the minimum promoter contribution.
• Hence, SIDBI introduced seed money scheme for the benefit of
entrepreneurs.
• Seed money is available through DIC { Direct Industry Centre } to
those entrepreneur who are technically qualified but lack of own
capital.
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20. National Equity Fund Scheme
• In order to provide equity type assistance, SIDBI is operation a
National Equity Fund Scheme.
• The equity capital loan to the extent of 2.5lakh is sanctioned to
each project provided the protect qualities under this scheme.
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