Small Industries Developmental Bank of India (SIDBI)

Small Industries and Development Bank of India (SIDBI) is a regulatory body for licensing and regulation of MSMEs. SIDBI’s primary objective is to help Banks and other lending institutions in assisting MSMEs and SSIs to avail funds for business expansion purposes and to meet working capital requirements.

Further, shall discuss the SIDBI’s Features & Top 17 Direct Finance Schemes offered for MSMEs that include Term Loan, Secured Business Loan, EXPRESS 2.0, SAATH, ARJANA, STEP, Ubharte Sitaare Programme, STHAPAN, ARISE, TULIP, STAR, SPEED PLUS, SPEED, CASH Credit, Loans with OEMs, SMILE, and PRATHAM.

SIDBI – Highlights – 2023

• SIDBI offers refinance support to Small Scale Industries (SSIs) and Micro Small and Medium Enterprises (MSMEs)
• Funding support to the MSME sector
• Helps in discounting the bills of Small Scale Industries
• Provides refinance to financial institutions, including Banks, NBFCs & Small Finance Companies
• Offers financial services, such as hire purchase, factoring, and leasing services
• Promotes employment opportunities among SSIs
• Offers assistance to handle exports
• Bank loans offered to women entrepreneurs and underprivileged groups of people

SIDBI’s Top 17 Direct Loan Schemes for MSMEs – 2023

1) General Purpose – Term Loan

The General Purpose Term Loan, as the name states, is a term loan with the objective to meet the working capital requirements of MSMEs.

Purpose:

• Setting up of new MSME units
• Expansion, modernization, diversification, quality certification, and technology up-gradation of existing units in the MSME sector
• Procurement of additional machinery or equipment
• For undertaking various marketing-related activities

General Purpose Term Loan
Nature of Loan	Term loan and other forms, such as Working Capital Term Loans, etc.
Loan Amount	Minimum Rs. 10 lakh
Loan Tenure	Maximum 8-10 years for Term loan (including moratorium up to 18 months)
Upfront Fee (Nonrefundable)	1% of the term loan sanctioned
Minimum Promoter’s Contribution	·         New Projects- 33% ·         Existing well-performing units- lower contribution [up to 25%] could be accepted
Debt Equity Ratio (DER)	Not exceeding 3:1
Asset Coverage Ratio (ACR)	Minimum overall asset coverage of 1.3 for existing units and 1.4 for new entities, including FACR of 1.00

2) Secured Business Loans for MSMEs

Business loans are offered to MSMEs engaged in the manufacturing and services sectors. Under this scheme, financial assistance is offered for planned and unplanned business-related expenses. The loan amount depends upon the MSME’s collateral/security to be submitted and its repayment capacity, as per current operations.

Eligibility Criteria

• Existing MSMEs with net profit in 2 years out of last 3 years with cash profits in all the 3 years
• Borrower should not be a defaulter to any bank
• Other financial norms, as specified from time to time

Features of Secured Business Loan (SBL)

• Nature of Loan: Open-Term Loan
• Loan Amount: Up to Rs. 10 crores and Linked to gross cash accruals and collateral security value
• Eligible heads for financing: For any bonafide business expenditure
• Rate of Discount: Fixed interest rate linked to PLR as per credit rating
• Security: Up to 10 years, including the moratorium period
• Foreign Currency Assistance: Shall be availed under the scheme towards the creation of tangible assets subject to natural hedge & other terms & conditions

Comparison of Business Loan Interest Rates offered by Top Banks/NBFCs – 2023

Bank/NBFCs	Interest Rate
Axis Bank	14.95% - 19.20% p.a.	Apply Now
Bajaj Finserv	9.75% - 30% p.a.	Apply Now
Flexiloans	1% per month onwards	Apply Now
HDB Financial Services Ltd.	Up to 36% p.a.	Apply Now
HDFC Bank	10% - 22.50% p.a.	Apply Now
IDFC First Bank	10.50% p.a. onwards	Apply Now
Indifi	1.50% per month onwards	Apply Now
Kotak Mahindra Bank	16% - 26% p.a.	Apply Now
Lendingkart	12% - 27% p.a.	Apply Now
Mcapital	2% per month onwards	Apply Now
NeoGrowth Finance	19% - 24% p.a.	Apply Now
Tata Capital	12% p.a. onwards	Apply Now
UGRO Capital	9% - 36% p.a.	Apply Now

3) Expeditious Process to Deliver Rapid Loan through Automated Evaluation and Swift Sanction (Express 2.0)

SIDBI EXPRESS 2.0
Objective	Term loan via automated platform to “New to SIDBI” customers in the services and manufacturing sectors for the purchase of machines/equipment.
Target Group	MSME units in operation for at least 3 years
Interest Rate	Linked with MCLR
Loan Amount	Up to Rs. 1 crore
Repayment Tenure	Up to 60 months
Eligibility Criteria	·         Mandatory Udyam registration ·         Mandatory GST registration ·         CIBIL / CMR/ due diligence checks, etc.
Financing	Up to 100%
Loan Process	Fully Automated

4) SIDBI Assistance and Aid for Thematic Support to MSMEs promoted by SC/STs (SAATH)

Objective: To support MSMEs in both the manufacturing and service sectors that are promoted by SC/ST Entrepreneurs in form of term loan assistance for the establishment of new, Greenfield units or for expansion, modernization other capital expenditures of the existing unit, coupled with incentive structure.

SIDBI SAATH
Interest Rate	MCLR-based ROI as per internal rating
Target Group	MSMEs promoted by SC/ST entrepreneurs with emphasis on smaller units/ new units under manufacturing & service sector
Credit Guarantee	50% of the credit guarantee fee to be borne by SIDBI
Loan Amount	Minimum – Rs. 25 lakh Maximum – Rs. 300 lakh
Prepayment Fees	Nil
Eligibility Criteria	·         MSMEs as per MSMED Act ·         MSMEs promoted by SC/ST entrepreneurs with minimum 51% stake ·         Standard Scheme Norms apply (CIBIL / CMR, due diligence checks etc.) ·         Should not be in default to any bank or financial institutions

5) A Special Dispensation for Nurturing Enterprises Run By Women Entrepreneurs (ARJANA)

Objective: To support MSMEs promoted by women entrepreneurs by way of term loan assistance for the establishment of new/greenfield units or for expansion, modernization other capital expenditure of the existing unit, coupled with an incentive structure.

SIDBI ARJANA
Interest Rate	MCLR-based ROI as per internal rating
Target Group	MSMEs promoted by women entrepreneurs with emphasis on smaller units/ new units under manufacturing & service sector
Credit Guarantee	50% of the credit guarantee fee to be borne by SIDBI
Loan Amount	Minimum – Rs. 25 lakh Maximum – Rs. 300 lakh
Prepayment Fees	Nil
Eligibility Criteria	·         MSMEs as per MSMED Act ·         MSMEs promoted by SC/ST entrepreneurs with minimum 51% stake ·         Standard Scheme Norms apply (CIBIL / CMR, due diligence checks etc.) ·         Should not be in default to any bank or financial institutions

6) SIDBI’s Term Loan to enhance the production of MSMEs (STEP) Scheme

Purpose: To offer Medium/Short-Term Loans to eligible MSMEs for enhancing Net Working Capital and/or to execute urgent confirmed orders.

STEP Scheme from SIDBI
Nature of Loan	Term loan and Working Capital Loan
Interest Rate	MCLR-based Interest rate as per internal rating
Target Group	Micro, Small, and Medium Enterprises
Loan Amount	·         Up to Rs. 3 crore for Existing Customers ·         Up to Rs. 2 crores for New Customers
Loan Tenure	Up to 3 years, including Moratorium up to 6 months
Nature of Funding	Both in rupee and foreign currency

Eligibility Criteria

• Existing MSMEs, as per MSMED Act 2006 are eligible
• Minimum 3 years’ business operations of the unit required and 2 years for SIDBI’s existing customers
• Working Capital Term Loan shall be offered to only those enterprises not availing working capital facility or overdraft facility from any bank or financial institution
• Business should be in profit during past 2 years and 1 year for existing customers
• Standard Scheme Norms apply (CIBIL / CMR, due diligence checks, etc.)
• Business should not be in any past default to any lender

7) SIDBI Assistance to Export Oriented MSMEs under UBHARTE SITAARE PROGRAMME

Purpose: Term loans to export-oriented MSMEs for business expansion, diversification, modernisation, technology/ capacity upgradation, product R&D, etc. through investment in land and building, equipment/machinery, etc.

Target Group:

• Future export leaders with high potential
• Units with unique products, technology, or processes
• High export potential sectors, including IT & ITes, Aerospace & Defence, Automobiles, Chemicals, Food Processing, Pharmaceuticals, and Textiles. Precision Engineering, Textiles, allied sectors, etc.

SIDBI’s UBHARTE SITAARE PROGRAMME
Interest Rate	Based on the MCLR of the Bank/ Repo rate, with applicable spreads, as per internal rating
Loan Amount	·         Need-based financial assistance, subject to a maximum of 80% of the project cost ·         Joint financing with Export/Import (EXIM) Bank available
Loan Facility	Term Loan (TL)/ Foreign Currency Term Loan (FCTL) available
Interest Incentive	Up to 25 BPS based on the performance/milestone
Repayment Tenure	Up to 6 years, extendable up to 10 years
Promoters’ contribution	20% (30% for greenfield units)
Moratorium	Up to 2 years

Eligibility Criteria

• New units: Promoters having sufficient experience in the proposed line of business and major projected revenue from exports. For units co-funded by technocrats from premier institutions like NIT, IIM, IIT, IISc, etc. adequate experience in the proposed line of business shall not be insisted upon
• Existing units: Essentially strong export-oriented small and SMEs with reasonable financials

Note: Standard Norms apply (CIBIL / CMR, due diligence checks, etc.)

8) SIDBI Thematic Assistance for Purchase of Capital Assets in New Enterprises (STHAPAN)

Purpose: Financial assistance to Greenfield Units for setting up of New units that include:

• Purchase of land, equipment, plant & MFA, etc.
• Construction of factory buildings

SIDBI’s STHAPAN
Target Group	MSMEs setting up new units in identified sectors under the Production-linked Incentive Scheme, as per the list identified by Govt. of India, high growth/sunrise sectors, and other important sectors
Interest Rate	Repo Rate (6.25%) + 2.20% to 3.50% (floating) for the first year with reset applicable thereafter (as per internal rating)
Loan Amount	Term Loan up to Rs. 20 crores, subject to a maximum of 75% of the project cost. Till October 31, 2022 (or) utilisation of the funds as allocated/decided from time to time, whichever is earlier
Repayment Tenure	Up to 7 years
Moratorium	Up to 2 years

Eligibility Criteria

• New Entities or Greenfield Units are eligible
• Minimum 5 years of business experience for promoters is required
• Promoters Contribution – Minimum 25%

9) Assistance to Re-Energize Capital Investments by SMEs (ARISE)

Purpose: Financial assistance shall be offered to existing / brownfield entities for undertaking business expansion/modernization/capital expenditure in the same line of business.

SIDBI’s ARISE
Target Group	MSMEs engaged in high growth and priority sectors, including sunrise sectors
Interest Rate	Repo Rate (6.25%) + 1.70 % to 3.00% (floating) for first year with reset applicable thereafter (as per internal rating)
Loan Facility	Term Loan/Foreign Currency Term Loan (FCTL) available
Loan Amount	·         Term Loan up to Rs. 7 crores, subject to a maximum of 80% of the project cost ·         Till July 31, 2022 (or) utilization of the corpus as allocated/decided from time to time, whichever is earlier
Loan Financing	100% financing for loans up to Rs. 3 crores, based on FD up to 25% (interest-bearing)
Repayment Tenure	Up to 7 years
Moratorium	Up to 2 years

10) SIDBI Term-Loan assistance for Rooftop Solar Photovoltaic (PV) Plants (STAR)

Purpose:

• Assisting MSMEs to decrease their Power bill
• Across the segment coverage with 25 KW to 500 KW plants (Suggestive)

SIDBI’s STAR
Interest Rate	MCLR-based interest rate as per internal rating
Loan Amount	Rs. 10 lakh – Rs. 3.5 crore
Coverage	·         Installation Cost ·         Solar Panels / Equipment, including all accessories from established aggregators, manufacturers, suppliers, etc.
Loan Financing	100%
Repayment Tenure	Up to 5 years, including Moratorium of 6 – 12 months
FD Percentage	15% to 25% of Loan (interest bearing)
Credit Guarantee Coverage	Available
Promoter’s Contribution	Nil

Note: Ground mount solar plants are also allowed subject to unhindered availability of sunlight during tenure of the loan.

Eligibility Criteria

• Business Tenure: For new customers is 4 years and for existing customers is 2 years
• Cash profits generated in the last two years
• Maximum loan up to 25% of Net Sales
• Good repayment history
• For New Customers: Minimum IACR of 0.50%, if no CGTMSE cover is provided
• Proposed Solar rooftop capacity not to exceed the connected load
• Only On-site projects are eligible
• Stand-alone and Grid connected, both covered
• The proposed capacity of the solar roof-top  should not exceed the connected load

11) SIDBI – Loan for Purchase of Equipment for Enterprise’s Development Plus (SPEED PLUS)

SIDBI’s SPEED PLUS
Finance	Up to 100% for high-end machinery
Interest Rate	MCLR-based interest rate as per internal rating
Loan Amount	·         Up to 100% of the machinery cost subject to a maximum of Rs. 2 crores for New to SIDBI customers (Based on 20% – 30% FD) ·         Up to Rs. 3 crores for existing customers of SIDBI (Based on 15% – 30% FD)
Repayment Tenure	Maximum 7 years, including a Moratorium of 6-12 months
Collateral	No immovable property required

Eligibility Criteria

• MSMEs with minimum of 5 years of business experience and the last 3 years with stable sales and cash profits
• Minimum net sales of Rs. 5 crores and no operating loss in the immediate last 2 years

Eligible Expenditure:

• Proposed machinery should relate to the same line of business
• Machinery purchased from identified Original Equipment Manufacturers (OEMs) manufacturing high-end-machines or from authorized dealers / Indian subsidiaries of such foreign OEMs, which have a good brand reputation and with whom SIDBI has entered into a Memorandum of Understanding (MoU)

Note: 2^nd hand and refurbished machines are not eligible.

12) SIDBI – Loan for Purchase of Equipment for Enterprise’s Development (SPEED)

SIDBI’s SPEED
Interest Rate	MCLR based interest rate as per internal rating
Loan Amount	·         Up to 100% of the machinery cost subject to a maximum of Rs. 1 crore for New to Bank (NTB) customers and up to Rs. 2 crores for existing customers of SIDBI ·         SIDBI reserves the right to sanction a lower amount depending upon the assessment of repayment capacity
Loan Financing	Up to 100%
Repayment Tenure	2 – 5 years, including a moratorium of 3-6 months

Eligibility Criteria

MSMEs with minimum 3 years of operations and stable sales and cash profits in the last 2 years.

Eligible Expenditure:

• For New to Bank (NTB) customers: Machinery purchased from the OEMs with whom SIDBI has a Memorandum of Understanding (MoU).
• Proposed machinery should relate to the same line of business
• 2nd hand/ refurbished machines are not eligible

13) Working Capital (Cash Credit)

SIDBI’s Working Capital (Cash Credit) – Financial Parameters
Parameters	Eligibility Norms
Total Outside Liabilities / Tangible Net Worth (TOL / TNW)	Not to exceed 4:1
Current Ratio	1.25
Interest Coverage	Minimum 1.5 times
Overall Asset Coverage	1.3 for existing units and 1.4 for new projects
Internal Rating	As per the existing Bank’s Norms

Eligibility Criteria

• MSMEs who have outstanding Term Loans from SIDBI or propose to avail of both Term Loans and Working Capital from SIDBI
• MSMEs have the option to choose a banking platform from 2-3 banks

SIDBI assistance shall be considered to any of the following entities:

• New entities, where Term Loan is considered by SIDBI
• Existing customers who are solely banking with SIDBI, including enhancement
• SIDBI’s existing customers who are also banking with other banks
• Existing performing units that do not have the working capital facility with any other banks
• As a part of a Term Loan takeover, the takeover of working capital accounts shall be considered subject to compliance of takeover guidelines

14) TOP Up Loan for Immediate Purposes (TULIP)

Top up loan from SIDBI can be availed for the purchase of machinery and equipment.

TOP Up Loan – Highlights
Interest Rate	MCLR-based interest rate as per internal rating
Loan Amount	30% of existing exposure or 20% of net sales subject to Max Rs. 2 Crore
Loan Tenure	Max. 5 years (including moratorium of up to 6 months)
Collateral	Not required, except SIDBI FD
Finance	Up to 100% finance based on 10% FD & extension of charges
Loan Sanctioning Tenure	7 days

Eligibility Criteria

• Associated with SIDBI for at least 1 year with a good track record
• Growth in the same line of business at the same location
• Cash profit in the last financial year

15) Loans under Partnership with OEM

Loans under Partnership with OEM
Purpose	For the purchase of machines from OEMs
Interest Rate	As per SMILE
Loan  Amount	Up to Rs. 1 crore, may exceed
Repayment Tenure	Up to 5 years, including Moratorium
Eligibility Criteria	At least 3 years of having the decent financial position
Eligible Expenditure	Investment in Plant & Machinery purchased from respective OEMs
CGTMSE Coverage	Available

16) SMILE

SIDBI Make in India Soft Loan Fund for Micro Small and Medium Enterprises (SMILE)
Purpose	Covering new enterprises in the services and manufacturing sectors
Interest Rate	As per business requirements
Loan  Amount	Min. Rs. 10 lakhs for Equipment Finance & Rs. 25 lakhs for others
Repayment Tenure	Up to 10 years, including 36 months of Moratorium
Minimum Promoter Contribution	15% subject to a Maximum Debt Equity Ratio (DER) of 3:1
CGTMSE Coverage	Cases involving Term Loan up to Rs. 2 crores shall be covered

17) PRATHAM

Priority Assistance to MSMEs Based On Hybrid or Alternate-Security Model (PRATHAM)
Financing	Up to 100%
Interest Rate	MCLR based interest rate as per internal rating
Loan  Amount	Up to 100% of the total project cost subject to maximum of Rs. 300 lakh (based on 30% – 40% FD). SIDBI reserves the right to sanction lower amount depending upon assessment of repayment capacity.
Repayment Tenure	Up to 5 years, including Moratorium of 6-12 months
Eligible Expenditure	·         Plant & Machinery ·         Ancillary equipment’s/MFAs ·         Installation/transportation cost may be included. ·         Second hand/refurnished machines are also permitted subject to standard guidelines. ·         Machinery which is not covered under SPEED/SPEED Plus
Eligibility Criteria	·         MSMEs having at least 3 years of operation with net profit in previous 3 years ·         Units having cash profit for past 3 years would also be eligible

SIDBI’s Subsidiaries and Associates

• SIDBI Venture Capital Limited (SVCL) (1999)
• Micro Units Development & Refinance Agency (MUDRA) (2015)
• Credit Guarantee Fund Trust for MSEs (CGTMSE) branded as UDAAN (2000)
• ONLINE PSB LOANS Ltd.
• Acuité Ratings & Research Limited (Acuité) (erstwhile SMERA) (2005)
• India SME Asset Reconstruction Company Ltd (ISARC) (2008)
• Receivables Exchange of India Limited (RXIL) (2016)

Customer Care

Toll Free number – 1800-226-753

Timing: 10:30 AM – 6:00 PM

SIDBI’s Head Office Address

SIDBI Tower, 15, Ashok Marg, Lucknow – 226001, Uttar Pradesh

Phone Number: 0522-2288546, 0522-2288547, 0522-2288548, 0522-2288549, 0522-4259700

Mumbai Office

SIDBI, SWAVALAMBAN BHAVAN, C-11, G-Block,

Bandra-Kurla Complex, Bandra East, Mumbai 400051

Phone Number: 022-67531100

New Delhi Office

Atma Ram House, 1 Tolstoy Marg, New Delhi- 110001.

Phone Number : 011- 23448300

More Information:

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How to get a loan under PMRY

What is a CGTMSE business loan

How to get a loan from KVIC

What is the Pradhan Mantri Mudra Yojana

Pradhan Mantri Kaushal Vikas Yojana (PMKVY)

What are the loan schemes for startups in India