SIDBI, short for Small Industries Development Bank of India, is a government-owned financial institution established in April 1990. It was formed under the Small Industries Development Bank of India Act, 1989, with the primary objective of promoting and financing the development of small-scale industries in the country. The institution operates as a subsidiary of the Industrial Development Bank of India (IDBI).
Objectives of SIDBI:
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To provide financial assistance to small-scale industries
SIDBI’s primary objective is to provide financial assistance to small-scale industries in the country. The institution offers loans, credit facilities, and other financial services to entrepreneurs who want to start or expand their businesses.
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Promoting and developing the small-scale manufacturing sector
SIDBI also aims to promote and develop the small-scale industry sector in the country. The institution provides training and other support services to entrepreneurs to help them improve their businesses and increase their productivity.
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To create employment opportunities
Another objective of SIDBI is to create employment opportunities in the country. The institution provides financial assistance to small-scale industries, which in turn helps them create more job opportunities.
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To encourage innovation and entrepreneurship
SIDBI also aims to encourage innovation and entrepreneurship in the country. The institution provides support services and funding to entrepreneurs with innovative business ideas.
Functions of SIDBI:
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Providing loans and credit facilities
SIDBI provides loans and credit facilities to small-scale industries in the country. The institution also provides credit guarantees to banks and other financial institutions that lend to small-scale industries.
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Providing equity and venture capital
SIDBI provides equity and venture capital to small-scale industries in the country. This helps entrepreneurs with innovative business ideas get the funding they need to start or expand their businesses.
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Providing training and support services
SIDBI provides training and other support services to small-scale industries in the country. This includes training programs on various aspects of business management, such as marketing, finance, and operations.
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Promoting international cooperation
SIDBI also promotes international cooperation between small-scale industries in India and other countries. The institution helps entrepreneurs connect with international business partners and provides support services to help them expand their businesses globally.
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Developing and promoting new financial products
SIDBI is involved in developing and promoting new financial products that cater to the needs of small-scale industries. For example, the institution has launched various schemes, such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), to help small-scale industries get easier access to credit.
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Providing refinancing facilities
SIDBI provides refinancing facilities to banks and other financial institutions that lend to small-scale industries. This helps these institutions manage their liquidity and increase their lending capacity.
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Providing advisory services
SIDBI provides advisory services to small-scale industries on various aspects of business management. This includes guidance on business planning, market research, and financial management.
Benefits
It is an important institution in the Indian financial sector, particularly in developing the small-scale industry sector. Its various schemes and initiatives have helped create job opportunities and promote entrepreneurship in the country. SIDBI’s focus on fostering innovation and providing training and support services to small-scale industries has also contributed to the growth and success of many businesses.
The institution’s role in providing refinancing facilities and advisory services has further strengthened the financial ecosystem for small-scale industries. Overall, SIDBI’s objectives and functions align with the government’s vision for promoting inclusive and sustainable economic growth in India.
