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SIDBI Make in India Soft Loan Fund for Micro Small and Medium Enterprises (SMILE) was initiated by the Government of India to make MSMEs take active part in the ‘Make in India’ campaign. The primary focus is to provide financing to small enterprises within the MSME sector. The term Soft Loan was introduced to offer loan with Soft terms to meet the debt-equity ratio for establishment of an MSME.
SMILE (SIDBI) Interest Rate
| Nature | Quasi – Equity (Soft Loan) |
| Interest Rate | As per enterprise’s profile and requirements |
| Min. Loan Amount | Rs. 10 lakh for equipment finance |
| Max. Loan Amount | Rs. 25 lakh |
| Repayment period | Max. 10 years, including moratorium of up to 36 months |
| Minimum Promoter Contribution | 15% subject to Maximum Debt Equity Ratio (DER) of 3:1 |
| Security | First charge over all assets
Personal guarantee of promoters |
Note: The mentioned interest rates, fees and charges are subject to change and depend on the sole discretion of the bank, NBFC and RBI. GST and service tax shall be levied extra on the mentioned charges.
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Small industrial Development Bank of India (SIDBI) plays a dominant role in the coordination of the functions of financial institutions and organisations engaged in similar activities.
Eligibility Criteria for SMILE
- The majority emphasis will be on covering newly emerged enterprises in the manufacturing and service sector
- The primary emphasis will be on financing smaller famous enterprises within the MSME sector
- All the existing enterprises are undertaking expansion to take advantage of newly emerged opportunities along with modernization of technology up gradation techniques
- Regarding the SMILE Equipment Finance (SEF), the MSME entities should be in existence for at least 3 years having a satisfactory financial position.
Also Read: What are the loan schemes for MSME?
Tenure and moratorium period
- Long repayment period extending up to 10 years inclusive moratorium of up to at least 36 months
- The minimum amount of promoter contribution of 15% subjective to maximum Debt Equity Ratio (DER) with the exact proportion of 3:1
- In the case of SMILE Equipment Finance (SEF), the maximum amount of repayment period shall never be more than 72 months inclusive of the moratorium
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Key Features & Benefits
- Attractive interest rates
- Comparatively more extended periods of loan repayment
- Speedy dispensation of financial assistance
- Efficient funding of partial promoter contribution by methods of soft loans
- Speedy dispensation of machinery loan through the contactless platform
- In the case of SMILE equipment finance, there exist lower amount of promoter contribution
SMILE Equipment Finance
| SMILE Equipment Finance |
|
| Nature | Used for investment in plant & machinery |
| Interest Rate | As per SMILE |
| Min. Loan Amount | Rs. 10 lakh |
| Max. Loan Amount | Cap over max. loan amount |
| Repayment period | Max. 72 months, including moratorium period |
| MSME Existence | Min. 3 years |
Note: The mentioned interest rates, fees and charges are subject to change and depend on the sole discretion of the bank, NBFC and RBI. GST and service tax shall be levied extra on the mentioned charges.
Important initiatives by SIDBI in the past 25 years for promotion of MSMEs
SIDBI is well known for its initiatives for remaining aligned to the critical national goals of employment generation, poverty alleviation, fostering competitiveness and kindling entrepreneurship in the whole of the MSME sector. SIDBI has been dedicated since 1990 for the evolution of a vibrant MSME ecosystem. Some of the highly respected and notable initiatives are given below:
- Provision of cumulative assistance of around Rs. 5.40 lakh crore which is majorly channelized into MSME segment
- Direct impact over 360 lakh enterprises/persons through its extensive branch network of around 80 offices spread across the whole of the country
- Creation of an extensive network of financial institutions/branches having more than 1.25 lakh branch for provision of assistance to MSME sectors
- Extension of loans along with equity and quasi-equity aggregating to the amount of more than Rs. 13,689 crore
- Beneficiary schemes for benefiting 356 lakh disadvantaged people, majority of that being women, through its simplified Micro Finance operations
- Creation of depth in its outreach by nurturing and evolution of more than 100 MFI’s who in the recent times has emerged as robust and viable financial intermediaries serving all the less served sections
- Support to more than 1.16 lakh budding and existing entrepreneurs by infusing required skills and re-skilling of initiatives
- Facilitation of institutions and infrastructure by adopting SIDBI plus approach along with the creation of its subsidiary and associate institutions for the provision of impetus to the growth of MSME ecosystem
- Development of a pool of 1000+ professionals with more than 22% women and 40% belonging to SC/ST and OBC categories
- The bank is highly dedicated to serving the needs of the continually evolving and very dynamic MSME sector
The SIDBI was launched to emerge as an individual single window for satisfying all the necessary developmental and financial requirements of the highly important MSME sector to make it vibrant, globally competitive and robust enough. The vision is to make SIDBI brand as a highly preferred and customer friendly institution to accelerate enhancement of shareholder wealth through modern and advance technology platforms.
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