By Vivek K Mob: 9920183006 Email: email@example.com
Small Industries Development Bank of India (SIDBI) held its 19th Annual General Meeting on July 07, 2017, at Lucknow. S/Shri Ajay Kumar Kapur and Manoj Mittal, DMDs, SIDBI, while summarizing the performance of the Bank during FY 2017, also touched upon the numerous strategic initiatives undertaken by the Bank to fill in the various financial and non-financial gaps in the MSME eco-system. SIDBI has touched the lives of more than 360 lakh people in the MSME sector, directly and indirectly through various credit measures.
During the year ended March 31, 2017, the Bank’s balance sheet size increased by 4.2% to Rs.79,682 crore and the credit outstanding increased by 4% to Rs.68,290 crore as compared to last FY. The Bank’s net worth increased by 19% to Rs.12,905 crore. The Bank registered net profit of Rs.1,120 crore for the year 2016-17, with Earnings Per Share (EPS) at Rs.21.47. Gross NPA percentage of the Bank declined during the year to 1.2%, whereas the net NPA improved to 0.44%.
SIDBI has been constantly striving to augment credit flow to the MSME sector through various strategic initiatives. As a part of its strategy to partner with other lenders for providing financial assistance to MSMEs, SIDBI entered into MoUs with Vijaya Bank and Capital Small Finance Bank Ltd. Last few months have seen a number of Small Finance Banks (SFBs) starting operations which are expected to focus in lending to MSEs. Nearly all of the entities converting into SFBs have received support from SIDBI in their early period and growth. SIDBI will continue to play the same role in their growth as SFBs. Accordingly, the Bank introduced two facilities for SFBs, viz. equity Investment for setting up/ capitalization of the SFBs to meet equity/capital gap and refinance support post transformation of MFIs/NBFCs into SFBs. During the year ended March 31, 2017, SIDBI sanctioned resource support to 6 SFBs and equity investment in 3 SFBs.
FY 2017 saw operationalisation of the country’s first ‘Trade Receivables Discounting System (TReDS)’ by Receivable Exchange of India Ltd., a company promoted by SIDBI in partnership with National Stock Exchange. TReDS is an institutional mechanism for facilitating the financing of trade receivables of MSMEs on an electronic platform through a transparent bidding process in which multiple financiers participate. This is expected to address delayed payment problems of MSMEs by making available quick cash on competitive terms against their receivables.
SIDBI has been playing a key role by supporting GoI schemes like Make in India, Start-up India, Stand-up India, MUDRA and so on. For example, in case of Make in India programme, SIDBI launched a Rs.10,000 crore ‘SIDBI Make in India Soft Loan Fund for MSMEs (SMILE)’ in 2016 to make available soft loan to MSMEs, in the nature of quasi-equity to meet the required debt-equity ratio and term loan to meet project cost on relatively soft terms. The scheme has benefitted 1,384 MSMEs by providing loans of Rs.3,586 crore till March 31, 2017.
In order to encourage innovations and to provide growth push to MSMEs, SIDBI has been providing equity / risk capital assistance directly through Start-up Assistance and Growth Capital schemes (total sanction of Rs.1,107 crore to 575 MSMEs) as well as indirectly, through Fund of Funds (FoFs) operations. Till March 31, 2017 an amount of Rs.3,521 crore has been committed under FoFs to 125 VC funds/ AIFs.
SIDBI has been a pioneer in promoting energy efficiency in the MSME sector. The Bank not only provides Sustainable Finance, but also supports various promotional measures to enhance energy efficiency and reduce CO2 emissions in MSME sector. One important step taken by SIDBI is towards supporting Energy Servicing Companies (ESCOs) was the introduction of a World Bank supported guarantee fund called ‘Partial Risk Sharing Facility for Energy Efficiency (PRSF)’. In order to popularise PRSF, SIDBI conducted more than 20 awareness workshops, signed 5 MoUs with banks/NBFCs and assisted 5 ESCO-based EE projects. Such measures of the Bank have positively impacted the environment by way of emission reduction of 11.2 lakh tons of CO2 and saving of more than 11 lakh trees.
Following the launch of SIDBI’s Start-up portal on March 17, 2016 by the Hon’ble President of India, the FY 2017 saw launch of new impact making digital initiatives like www.standupmitra.in and www.udyamimitra.in. All these portals have been well received by MSMEs and Start-ups. While the www.startupmitra.in has registered 5,890 start-ups, 105 incubators and 86 investors on the platform, the standupmitra and udyamimitra portals provide access to 1.25 lakh bank branches and 17,000 plus hand-holding agencies who assist in filing of applications, financial training, skill training, mentoring, access to margin money, subsidy, etc. Both these portals together facilitated loan sanctions of Rs.385 crore to 1701 enterprises till March 31, 2017.
SIDBI has been a pioneer of MFI-led micro finance culture by nurturing and strengthening more than 100 MFIs. Its assistance to MFIs has aggregated Rs.12,714 crore by way of equity, quasi-equity and term loans benefitting more than 356 lakh persons, majority of them being women.
SIDBI has been providing a number of promotional and developmental supports like rural industrialization, entrepreneurship development, skill up-gradation, marketing support, financial literacy, credit advisory services, cluster development, etc. These promotional and developmental supports of SIDBI have helped in setting up of more than 80,000 units, created 1.5 lakh employment and benefitted more than 2.3 lakh people in the MSME sector.
Over the years, SIDBI had emerged as an ‘institutions builder’ to strengthen the MSME eco-system to address their varied needs. It has set up SVCL to provide Venture Capital and growth capital to promote knowledge-based MSMEs, MUDRA for upscaling of ‘funding the unfunded’, SMERA to provide comprehensive, transparent ratings to MSMEs, ISARC for quicker resolution of NPAs in MSME sector and ISTSL to offer technology, advisory and consultancy services for Energy Efficiency and other projects.
During the year, the Bank was conferred with the ADFIAP’s International Development Awards 2017 under ‘SME Development Category’ for its new SME development solutions and initiatives including digital solutions for enterprising India, End-to-End Energy Efficiency (4E) Solutions, funding securitization of microfinance assets – an innovative approach by MUDRA for market making, Fund of Fund operations of SIDBI and TReDS by RXIL, etc.