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Define SIDBI..
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Small Industries Development Bank of India (SIDBI) set up on 2nd April 1990 under an Act of Indian Parliament, acts as the Principal Financial Institution for Promotion,Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector
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The government established SIDBI under a special Parliament Act as a subsidiary of the IDBI. Now the SIDBI is an independent body of its own that focuses mainly on the financing of the Small, Micro and Medium Enterprise (MSME) Sectors of the economy. It now is responsible for the allocation of the Small Industries Development Fund (which was the responsibility of the IDBI previously).
SIDBI makes use of the current banking network to extend credit facilities to the small business and micro industries sector. It provides direct financial assistance to such banks and institutes which are passed over to the MSME sector. It also provides indirect financial assistance via line of credit, refinancing facilities, bills discounting, etc.
Functions of SIDBI
When a private bank or institution provides loans or advances to small units for business purposes, the SIDBI will refinance such loans.
SIDBI has arrangements with banks, government bodies other international agencies, etc. to enable a holistic approach for the development of the MSME sector.
It will also discount or rediscount bills of such private institutions.
The government established SIDBI under a special Parliament Act as a subsidiary of the IDBI. Now the SIDBI is an independent body of its own that focuses mainly on the financing of the Small, Micro and Medium Enterprise (MSME) Sectors of the economy. It now is responsible for the allocation of the Small Industries Development Fund (which was the responsibility of the IDBI previously).
SIDBI makes use of the current banking network to extend credit facilities to the small business and micro industries sector. It provides direct financial assistance to such banks and institutes which are passed over to the MSME sector. It also provides indirect financial assistance via line of credit, refinancing facilities, bills discounting, etc.
Functions of SIDBI
When a private bank or institution provides loans or advances to small units for business purposes, the SIDBI will refinance such loans.
SIDBI has arrangements with banks, government bodies other international agencies, etc. to enable a holistic approach for the development of the MSME sector.
It will also discount or rediscount bills of such private institutions.
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