Indialends, 27 Jul 2023

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SIDBI Make in India Soft Loan Fund for Micro Small and Medium Enterprises

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SIDBI Make in India Soft Loan Fund for Micro Small and Medium Enterprises was initiated by the Government of India. The aim is to make MSME an active part of the Make in India Campaign by providing financial assistance to small enterprises that are part of the MSME sector. The term ’soft’ is associated with this loan is to make sure that the loan is offered with soft terms and conditions to balance the debt-equity ratio for the establishment of an MSME.

Eligibility criteria to apply for SIDBI Make in India Soft Loan Fund for Micro Small and Medium Enterprises

• The major focus will be on newly emerged enterprises belongs to servicing and manufacturing sector.
• All the existing enterprises that are undertaking the expansion to avail of the benefits of newly emerged opportunities along with technology modernization and up-gradation techniques.
• Regarding the SMILE Equipment Finance (SEF), the MSME entities should be in existence for at least 3 years having a satisfactory financial position.

Know about the key features and benefits

• Attractive interest rates
• Get more extensions for loan repayment
• Speedy dispensation of financial assistance
• By using the soft loan term, providing the efficient funding of partial promotor contribution by the methods of soft loans.
• Speedy dispensation of machinery loan through the contactless platform
  

In the case of SMILE equipment finance, there exist a lower amount of promoter contribution. 

Important facts about SIDBI Loan:

• Nature of Loan: Quasi-Equity (Soft Loan)
• Interest rate: Based on Entrepreneur’s profile and Financial Requirements
• Loan amount: Starts from Rs 10 Lakh and goes up to Rs 25 Lakh
• Repayment Period: Max. 10 years, including moratorium of up to 36 months
• Minimum Promoter Contribution: 15% subject to Maximum Debt Equity Ratio (DER) of 3:1
• Security: First charge overall assets and secondly, personal guarantee of promoters 

(SMILE) SIDBI Loan Tenure

• Enjoys longer repayment tenure extending up to 10 years inclusive of the moratorium benefit of 36 months.
• The minimum amount of promoter contribution applies is 15% subjective to maximum Debt Equity Ratio (DER) with the exact proportion of 3:1.
• In the case of SMILE Equipment Finance (SEF), the maximum amount of repayment period shall never be more than 72 months inclusive of the moratorium
• Initiatives are taken by SIDBI in the past 25 years for the MSME promotion

SIDBI is popular for taking initiatives for the well-being and achieving the critical national goals of poverty alleviation, fostering competitiveness, and kindling entrepreneurship in the overall MSME sector. SIDBI has been operating since 1990 towards the evolution of a vibrant MSME ecosystem.

Some of the highly respected and notable initiatives are given below:

• Provision of cumulative assistance of around Rs 5.40 Lakh crore which is majorly channelized into the MSME segment.
• Leave a direct impact on approx. 360 lakh enterprises by opening its extensive branch networks of around 80 offices spread across the whole of the country.
• Creation of an extensive network of financial institutions/branches having more than 1.25 lakh branch for quick assistance to MSME sectors
• Extension of loans along with equity and quasi-equity aggregating to the amount exceeding Rs. 13,689 crores.
• Beneficiary schemes for benefiting 356 lakh disadvantaged people, the majority of that being women, through its simplified Micro Finance operations
• Creation of depth in its outreach by nurturing and evolution of more than 100 MFI’s who in recent times has emerged as robust and viable financial intermediaries serving all the less served sections
• Supporting more than 1.16 Lakh budding and existing entrepreneurs by infusing required skills and re-skilling of initiatives.
• Institutions and infrastructure get facilitated by adopting the SIDBI plus approach along with the creation of its associate and subsidiary institutions for the provision of impetus to the growth of the MSME ecosystem.
• Development of a pool of 1000+ professionals with more than 22% women and 40% belonging to SC/ST and OBC categories.

The bank is highly dedicated to serving the needs of the continually evolving and very dynamic MSME sector.