SIDBI Scheme for MSMEs for Recovery & Organic Growth

SIDBI Assistance to MSMEs for Recovery & Organic Growth during COVID 19 pandemic @ 5.50% – 6% p.a- AROG- SCHEME 

Target Customer / Purpose

MSME is involved in the production or provision of services directly related to coronavirus such as Pulse oximeters, licensed medication (Remdesivir, Fabiflu, Dexamethasone, Azithromycin, Zincovit, Limcee, Ivermectin, etc.).

Fans, EPIs, inhaling masks, IV fluid/dextrose, IV Sets, IV cannula, ICU Beds, cardiacs, monitors, syringe pumps, portable, machines X-ray, endotracheal tube, aspirations, etc.

Application

• Sanction within 48 hours post receipt of mandatory information
• Standard KYC Checks and due diligence
• One page application

Eligibility

• New Customer to SIDBI – Cash profit in last two years
• Satisfactory credit track record with existing Bankers / FIs
• Existing Customers – Cash profit in last audited balance sheet ( i.e FY2020)

Key Attraction

• Nil Processing fee – Attractive Interest Rates
• Up to 100% Finance – Very Low Collateral Option
• Credit Guarantee option is also available (Charges to be borne by SIDBI)

More read: Micro Small and Medium Enterprises

Loan Amount & Interest Rate

• Working Capital Term Loan for purchase of raw material of executing confirmed orders
• Term Loan for purchase of equipment/machines
• Maximum – 200 Lakh
• ROI – 5.50% – 6% p.a

Other related aspects

• Moratorium upto 12 Months Included

• Repayment Period

1. WCTL – up to 18 Months
2. Term Loan – up to 60 Months

Disbursement/Documentation

• Direct Payment to supplier for purchase of equipment/machinery / MFAs and raw material
• Simple Loan Documentation

SIDBI Assistance to Healthcare sector in War Against Second Wave of COVID-19 @4.50%- 5% p.a- SHWAS SCHEME

Target Customer / Purpose

MSME is involved in the production of oxygen cylinders, oxygen – generators, oxygen concentrations, liquid oxygen or transportation services, the storage, refilling of these items, oxygen or transport services, storing, refilling of these products.

Key Attraction

• Nil Processing fee – Attractive Interest Rates
• Up to 100% Finance – Very Low Collateral Option
• Credit Guarantee option is also available (Charges to be borne by SIDBI)

Eligibility

• New Customer to SIDBI – Cash profit in last two years
• Satisfactory credit track record with existing Bankers / FIs
• Existing Customers – Cash profit in last audited balance sheet ( i.e FY2020)

Application

• Sanction within 48 hours post receipt of mandatory information
• Standard KYC Checks and due diligence
• One page application

Loan Amount & Interest Rate

• Maximum – 200 Lakh
• ROI – 4.50% – 5% p.a
• Term Loan for purchase of equipment/machines
• Working Capital Term Loan for purchase of raw material of executing confirmed orders

Other Aspects

• Moratorium up to 12 Months Included

• Repayment Period

1. WCTL – up to 18 Months
2. Term Loan – up to 60 Months

Disbursement/Documentation

• Direct Payment to supplier for purchase of equipment/machinery / MFAs and raw material
• Simple Loan Documentation

www.carajput.com; SIDBI

SIDBI has proved to be a great support system for all kinds of small businesses in India.

This is because they create a series of equity and loan schemes for the MSME sector to sanction their growth. In the following article, we will observe some famous SIDBI schemes like- SME IT loans, vendor development, marketing assistance, international finance, for women entrepreneurs, and risk capitals as well.

It is owing to these schemes only that SIDBI has gained such a good place in the market.

Marketing Assistance Scheme

The loan provided by SIDBI is usually not below Rs. 10 lakhs, if one wants to directly obtain it from the SIDBI branch.

The loan is mainly offered to MSEs so that they can do proper marketing for their products. Also, the ratio of debt-equity is normally not more than 2:1.

SME IT Loans

In order to help the SMEs set up, a good IT sector in their business, SIDBI, and well-known IT Company Intel have come together and launched an extremely successful venture.

This is supposed to help SMEs to have smooth access to finance and technology to implement a better and revised technology. This is because one can get a loan for hardware, software, their installation, and services.

  Interest charged on the finance of 5 lakhs to 25 lakh is 11.5% p.a on a diminishing balance basis. This helps in the technical growth of SMEs.

Vendor Development Scheme

This scheme proves to be a bliss for merchants of OEMs and other large corporates as well. These merchants basically part of SMEs belonging to various sectors such as the service or industrial sector.

SIDBI extends its assistance to these OEM merchants and corporates so that they can expand and modernize their business. In order to make this scheme more successful and helpful, SIDBI has signed an MoU with large corporates of the country, PSUs, and other big MNCs so that a good SME vendor base can be made available.

Through Bill Discounting Scheme, timely payments to various units are assured. Under this scheme, various kind software finance is made available to purchasers and sellers of machinery, components,and parts which constitute an important part of construction and transportation sector of any business.

 

Refinance Through Banks and SFCs

This scheme of Refinance is made available via State Finance Corporations, various banks, for creating small but new scale units which would be helpful for SMEs to expand, modernize, and diversify their business.

The service sector usually is comprised of various professional practices, tourism, hospitals or nursing homes, hotels, restaurants, etc.

SIDBI tends to offer long-term credit, State level Industrial development Institutions, for loans that are provided by MSMEs.

But, there is a catch here- the total budget of the project which should come under Refinance Assistance with respect to service sector units should not exceed the amount of 20 crores. This is the reason why the project cost limit is lower for SFCs.

International Finance

There a number of schemes which are covered under this department:

• Pre-eminent credit

This scheme is an offer to various SMEs in a different currency – which may be USD, Euro, or rupees. The margin provided amounts to a minimum value of 10% and the maximum value of 25%.

The period for credit is of 180-190 days. The rate of interest is very less- 0.75% charged half-yearly.

• The foreign currency term plans

This assistance is basically given to SMEs so that they can set up new projects and expand their business in the marketplace. This can also be used to renew the technology schemes of the business.

In fact, one can repay this amount back in about a maximum period of five years. The interest charged under this scheme is 4%.

• Post-shipment Credit

This credit is offered in foreign currency only for SME units or the trading sections so that they can source their SMEs. Finance is mainly given to those SMEs where sourcing requirements are up to Rs 1 crore.

The rat rod interest charged for this scheme is also 0.75%. The credit also follows all the guidelines of RBI.

Marketing Fund for Women

SIDBI realized the role of women in every field. So, it provides aid to young, aspiring women entrepreneurs and organizations who are mainly involved in the marketing sector.

This helps these women entrepreneurs to expand their reach, in every kind of market and enables them to fight every odd. Under this scheme, finance is provided to NGOs, co-operatives, etc who need financial support for services like trade, internet, advertising, marketing research, etc.

Rishi Capitals to MSMEs

Under this, SIDBI has launched a scheme – “SIDBI Foundation for Risk Capital for MSMEs”. Various new products and mechanisms are created under this project in order to provide risk capital to MSMEs for varied industry units.

Also, apart from direct financial help provided by SIDBI, different delivery routes like VC Funds, small banks, etc also help to supply risk capital to MSMEs.

This becomes important as no one can envision future risks and issues which might occur with any business, you can only focus on giving your best.

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