Presentation On SIDBI Schemes

1. Presentation On SIDBI Schemes Presentation By T.L.Shanmuga Sundaram, AGM SIDBI, Chennai

2. SIDBI Set up on April 2, 1990 for Promotion, Financing & Development of Small Scale Industries And to Co-ordinatethe functions of institutions serving the Small Industries

3. Through 910 PLIs with 65,000 branches Through network of SIDBI’s 59 offices SIDBI’s Assistance Indirect Assistance Direct Assistance Finance Support services

4. Salient financials – FY 2006 • Outstanding – Rs.13890 Crore. • PAT – 270 Crore • Net NPA’s –1.97% • CAR – 43%

5. Direct Credit Scheme Direct Assistance Technology Upgrad. Fast Track Finance Export Finance Venture Capital Bills Finance Indl./ Mktg Infrastr. Factoring

6. SIDBI Nodal Agency for Government Schemes • National Equity Fund • Integrated Infrastructural Development Scheme • Technology Development & Modernisation FundScheme • Technology Upgradation Fund Scheme for Textiles and Jute Industries • Tannery Modernisation Fund • Credit Guarantee Fund Scheme for Small Industries (through separate Trust) • Credit Linked Capital Subsidy Scheme

7. Direct Credit Scheme forSME & Service Sector : • Eligible Borrowers : • New, Existing SME or Service Sector units • Currency : Rupee or FC Term loan • Purpose : • Setting up a new SME unit/ service sector unit • Modernisation, expansion, diversification • Any other activity relevant to the project • Marketing related activities • Meeting working capital requirements • Any other activity having linkages and benefits accruing to SME sector

8. Credit Linked Capital Subsidy for Tech Upgradation of SSI • New or Existing SSI units • To facilitate technology upgradation in specified products/ sub sectors • 15% capital subsidy from GoI on the loan amount (eligible loan ceiling Rs.100 lakh) • SIDBI is the nodal agency

9. Receivables Finance Scheme • Covers bills arising out of purchase of indigenous components / parts / sub- assemblies/ accessories / intermediates manufactured by SSIs and service sector activities like Job work/ Road Transport/ Advertising/Software etc. • SELLERS - SSI manufacturers/Service providers. • PURCHASERS: Corporate entity - good financial position & track record

10. Receivables Finance Scheme • TERMS • Period of unexpired usance of bill - not to exceed 90 days • Total tenor of bill - not to exceed 120 days. • Discount rate band : 6.88 to 10.24% p.a.

11. ReceivablesFinance Scheme • Eligibility for SSIs • Should be in existence for minimum 2 years. • Should have made profits / declared dividends during past 2 years • Not in default to Banks / FIs • Limit based on credit sales to purchaser during past year / projected growth in sales for the current year

12. ReceivablesFinance Scheme • Eligibility for large purchasers • Minimum sales of Rs.15 crore • Minimum networth of Rs.3 crore • Not in default to Banks / FIs • Limit based on credit purchases from SSIs during past year / projected growth in sales for the current year

13. DDS [Equipment] • Twin Objectives : • Manufacturer can maximise sales by offering deferred payment facilities - gets value of machinery immediately by discounting with SIDBI • Purchaser can repay over a period of 3/5 years. • Interest: 9.5% • Eligibility : • All manufacturing units & public sector undertakings such as electricity boards / transport corporations. • Either manufacturer or seller in SSI sector

14. Equity type assistance Schemes- National Equity fund • To meet gap in equity • For setting up new projects, expansion, modernisation, diversification of small scale units, service enterprises • Project cost upto Rs. 50 lakh • Min. promoters contribution 10% • Soft loan 25% of PC – max. of Rs. 10 lakh • Service charges – 5% p.a. on soft loan

15. P&D – Focus Areas (Contd..) • Entrepreneurship Development Programmes • Supported 1,709 EDPs, comprising 779 programmes for rural youth, 331 for women and 599 for other target groups • Human Resource Development • Organised 240 SIMAPS and 1074 STUPs benefiting over 20000 participants • Technology upgradation • 25 clusters for upgradation adopted • Set up TBSE – being converted to Technology Bank • Pioneering initiatives taken in clusters include Mutual Credit Guarantee Fund (MCGF) Programme.

16. P&D – Focus Areas (Contd..) • Emphasis on environment management, quality management • Conduct of over 88 awareness programmes on environment and quality management • Constitution of Expert Group to advise on environment related issues • Support for conducting workshops for specific industrial sectors to enable them to appreciate the concept of cleaner production. • Research and Information Dissemination • Book on Technology for SSIs • WTO related studies

17. Cluster Development Programmes • Cluster development initiatives in 25 clusters all over India. • Focus is on Technology Upgradation. • In Tamilnadu, SIDBI, in association with UNIDO & TASSSMA, launched Mutual Credit Guarantee Scheme in AmburCluster.

18. Mutual Credit Guarantee Fund (MCGF) • MCGF is a Corpus mutually created by a group of potential borrowers and matching contribution by SIDBI. • MCGF stands as a guarantee for loans given to each and every contributor to MCGF. • MCGF operates on the principle that not all members will require loan at the same time and only a small percentage of borrowers might default.

19. Mutual Credit Guarantee Fund (MCGF) • MCGF is managed and operationalisedby a Legal Entity of the contributors to MCGF • This corpus is placed with a lending agency and used as a security for leveraging funds for contributors. • Thus, MCGF enables small units to avail bank loans without normal collateral requirements.

20. VISIT SIDBI WEBSITE AT www.sidbi.com