NEW INITIATIVES BY SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI) FOR PROMOTION OF SMALL SCALE INDUSTRIES

Credit Guarantee Fund Scheme for Small Industries 

            In order to facilitate the collateral-free/third-party guarantee free credit facilities to small scale industries, Government of India in association with SIDBI launched the Credit Guarantee Fund Scheme for Small Industries with effect from August 01, 2000. The Scheme is being implemented by Credit Guarantee Fund Trust for Small Industries (CGTSI), jointly set up by GoI and SIDBI. The initial corpus of Rs.1.25 billion of CGTSI has been contributed by Government of India and SIDBI in the ratio of 4:1 which is likely to be raised to Rs.25 billion in future. Following the announcements made by the Hon’ble Prime Minister, the ceiling on loans and advances to be covered under the Scheme has been enhanced from Rs.1 million to Rs.2.5 million extended by banks, selected Regional Rural Banks or such other institutions as may be directed by the Government. 

Credit Linked Capital Subsidy Scheme for Technology Upgradation of SSIs. 

Following the announcements made by the Hon’ble Prime Minister on August 30, 2000, the Government of India launched a new Credit-Linked Capital Subsidy Scheme (CLCSS) for Technology Upgradation of SSIs in the select products/sub-sectors for strengthening the units in the identified sectors to face the challenges of liberalisation. The select sectors, inter alia, include leather and leather products including footwear and garments, food processing, information technology, drugs and pharmaceuticals, auto components, etc. The Scheme, being implemented through SIDBI, envisages a capital subsidy of 12 per cent on loans advanced to SSI units by scheduled commercial banks and National Small Industries Corporation Ltd. 

SIDBI National Programme on Innovation & Incubation for Small Industries 

In order to facilitate the promotion and development of knowledge-based enterprises, primarily in the small and medium sector, SIDBI launched a new programme viz. SIDBI National Programme on Innovation and Incubation on March 11, 2000. During  FY 2001, SIDBI entered into MoUs with Indian Institute of Technology, Kanpur and Birla Institute of Technology, Mesra, Ranchi for setting up such centres. The Centre at Kanpur has already become operational.  

Dedicated Venture Capital Funds for Small Industries. 

Besides promoting Regional and National level venture capital funds, SIDBI has decided to set up an Overseas Dollar Denominated Venture Capital Fund in collaboration with Intech Venture Group (IVG), Mauritius. An MoU has already been entered into with IVG. The focus of the Fund would be on hi-tech overseas companies aiming at establishing a major presence in India or abroad in joint collaboration with Indian partner(s). 

Refinance Scheme for Term Loans granted by SFCs/SIDCs to industrial concerns other than in the Small Scale Sector – Under the scheme refinance assistance is extended against the loans and advances extended by SFCs/SIDCs to industrial concerns other than in the small scale sector.  

Source – SIDBI

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