UPSC Exam Preparation: Topic of the Day – Small Industries Development Bank of India
Small Industries Development Bank of India (SIDBI) is an independent financial institution aimed to aid the growth and development of micro, small and medium enterprises (MSMEs) which contribute significantly to the national economy in terms of production, employment and exports.
- SIDBI was established with the mission of facilitating and strengthening the flow of credit to the micro, small and medium enterprises and for addressing the developmental and financial gaps in the ecosystem of MSMEs.
- It aims at emerging as a single window to meet the developmental and financial needs of MSMEs in order to make them globally competitive, strong, vibrant and to project the institution as a customer friendly financial body. It also aims at enhancing the wealth of shareholders through the modern technology platform.
- It is involved in the promotion and development of the MSME sector.
- It is a statutory body set up under the Act of Indian Parliament in 1990.
- It is the principle institution for development, promotion and financing the MSME sector and for coordination of function of the institutions engaged in similar activities.
- SIDBI retained its position in the top 30 Development Banks of the World in the ranking of The Banker, London
- SIDBI also functions as a Nodal/ Implementing Agency to various ministries of Government of India viz., Ministry of MSME, Ministry of Textiles, Ministry of Commerce and Industry, Ministry of Food Processing and Industry, etc.
SIDBI provides financial support to MSME in the following ways:
- Indirect financing by way of refinancing the banks, refinancing financial institutions for onward lending to MSMEs
- Direct financing by way of service sector financing, receivable financing, risk capital and sustainable financing etc.
Apart from providing financial assistance, SIDBI focuses on the “credit plus approach” under which it facilitates technology modernisation & up gradation, cluster development, enterprise development, upgrade the skills and support marketing activities.
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