What is Small Industries Development Bank of India (SIDBI)?

About Small Industries Development Bank of India (SIDBI):

• It was set up on 2nd April 1990, under an Act of the Indian Parliament.
• Purpose: To act as the principal financial institution for promotion, financing and development of the Micro, Small and Medium Enterprise (MSME) sector, as well as for the co-ordination of functions of institutions engaged in similar activities.
• It is under the jurisdiction of the Ministry of Finance.
• It was incorporated initially as a wholly owned subsidiary of the Industrial Development Bank of India (IDBI).
• Currently the shares of SIDBI are held by the Government of India (GoI) and 22 other institutions/PSBs/insurance companies owned or controlled by the Central Government.
• Headquarters: Lucknow, Uttar Pradesh
• SIDBI helps MSMEs in acquiring the funds they require to grow, market, develop and commercialize their technologies and innovative products.
• The bank provides several schemes and also offers financial services and products to meet the individual requirements of various businesses.
• Financial support to MSMEs is provided by way of
  • Indirect/refinance to banks/Financial Institutions for onward lending to MSMEs
  • Direct finance in niche areas like risk capital, sustainable finance, receivable financing, service sector financing, etc.
• SIDBI was made responsible for administering the Small Industries Development Fund and the National Equity Fund that were administered by IDBI before.
• In order to promote and develop the MSME sector, SIDBI adopts a ‘Credit Plus’ approach, under which, besides credit, SIDBI supports enterprise development, skill upgradation, marketing support, cluster development, technology modernization, etc.