Service sector assistance

Who is it for
Existing Small and Medium Service Sector Enterprises in need of Loan/Capital for Growth
Existing promoters with experience in the similar activity for setting up new projects.
Your current area of operation could be in any of the Service Sector Businesses listed below:

Hospitality & Tourism related activities (including Health Tourism)

Health care (Diagnostic & Pathology centres / Clinics, Hospitals, etc.)

IT and IT enabled services

Business Process Outsourcing (BPO), Knowledge Process (KPO)

and other knowledge based activities

Advertisement and Promotion Services

Infrastructure Support Services including activities relating to Telecom

Transport Services

Logistics

Supply chain management

Warehousing and cold storage

Retail outlets

Hotels below 5 star category, especially budget hotels

Restaurants

Modern

health

care

facilities/

Health

clinics/

Hospitals

with

focus on relatively smaller hospitals

Franchisees / Franchisors

Rent a car operators

Scientific

or

agency,

technical

event

consultancy,

management

testing

for

and

industry,

analysis

promotion

of

industrial growth.

Tourism related activities

Auto workshops / Repairs/ Auto Dealers

Telecommunication Services

Business

Process

Outsourcing
call

(KPO)

centres,

Outsourcing
and

(BPO),

other

technical

help

Knowledge

knowledge
desks,

based

medical

Process

activities

like

transcriptions,

bio-

informatics, contract research, etc.

Setting

up

of

towers,

cabling,

mobile/radio
network

frequency
installation,

transmission/receiver
systems

integration,

service centres, dealerships, etc.

Setting
auto

up

of

workshops,

service
etc.),

stations
health

(petrol

and

and

fitness

gas

filling

stations,

centres,

events

management, and establishment of design houses/studios.

(The list is only indicative and not exhaustive. We shall be pleased to offer assistance to Service
Sector Businesses not listed above.)

Your Needs
You would like to have adequate capital/loan to meet the growth aspirations of your business.
You would like to make investments in Marketing, Brand Building, Creation of Distribution Network,
Technical Know-how, R&D, Software Purchase, etc but the lenders you typically approach are not
comfortable

with

such

intangible

assets.

You would like to raise finance on the strength of your business and backing of your cash flows
rather than Asset Cover/ Collateral Security. You would also like to have a longer initial moratorium
on principal instalments to ensure greater chances of success for your ventures.(or so that you
have adequate time to stabilize the operations of your venture)

Scheme Details
Term loan and. Investment products such as Sub-debt, Equity, convertible debentures, optionally
convertible cumulative preference shares, zero coupon bonds, etc.

Key Benefits
Bridge the gap in means of finance for

scaling up/ expansion/ modernization projects.

Access long term structured assistance especially

for investments in intangible assets

Leverage Equity / Sub Debt Assistance from SIDBI for raising higher debt funds.
Avoid complexities of Enterprise Valuation, Exit Issues etc associated with Equity Investments.

Eligibility
Service

sector

project

within

the

ambit

of

Section

(h)

of

SIDBI

Act.

Maximum project cost upto Rs 75 crore with term loan from SIDBI not exceeding Rs 50 crore.
Where investment in equipment is not more than Rs 5 crore, project cost upto Rs 250 crore.
The unit should generally be a private limited / public limited company. However, partnership firms,
sole proprietorship concerns and Societies and Trusts would also be considered on a case to case
basis.

Loan Facilitation & Syndication Service

What is Loan Facilitation & Syndication Service?

Under this initiative, SIDBI facilitates Bank loans for new as well as existing manufacturing and
service sector units.

SIDBIs initiative in partnership with Banks, Rating Agencies (RAs) and Accredited Consultants
(ACs).

Its a transparent, structured mechanism for timely consideration of loan applications.

Why Is It Needed?

To generate complete structured applications alongwith necessary documents as are needed by

Banks for sanctioning of loans.

Independent Validation by ACs of the information furnished by MSMEs in the loan applications
provides a second check thereby enhancing the reliability of furnished information and acts as an
additional comfort to the banks in handling the loan applications.

Rating (not mandatory) of proposals by Rating Agencies, as and when required, provides an
independent opinion and helps the bankers for considering applications expeditiously.

The initiative would reduce delays and is expected to enhance flow of assistance to MSME
sector.

Benefits to MSME Entrepreneurs

Bank Loan Process Made Easier
Improved Acceptance of the loan proposals by banks

How does it Work?

SIDBI has empanelled Accredited Consultants (ACs) who will prepare the Basic Information
Memorandum (BIM) for the MSME entrepreneurs based on the information and requirements
indicated by the MSMEs. It is not only a loan proposal but more than that. BIM will capture all
information required by the Banks and the Rating Agencies, if needed,

BIMs prepared by ACs would be submitted to SIDBI by ACs with the approval of MSME
entrepreneur.

If required, SIDBI may get the proposal rated by RBI approved Rating Agencies.

SIDBI provides Equity / Quasi- Equity for Growth Oriented existing units, Finance for Service
Sector Units, and provides credit to MSMEs for Energy Efficient and Cleaner Production Processes.

In all other cases, the application would be forwarded to Public Sector Banks with whom SIDBI
has entered into a MoU for the purpose of Loans.

SIDBI, in essence, will handhold the Entrepreneur through all stages of loan processing.

Services provided by Accredited Consultants

Guide new / existing entrepreneurs regarding availability of schemes of SIDBI / commercial banks

Inform MSMEs of Government subsidies / benefits

Provide borrowers with debt counselling

Prepare Basic Information Memorandum (BIM)

Facilitate response to queries raised by banks etc.

Financing Schemes for Sustainable Development - Energy Efficiency and

Cleaner Production

Who is it for?
Micro, Small and Medium Enterprises (MSMEs) planning to invest in:

Energy saving investments in plant and machinery / production processes in order to reduce
carbon footprint and enhance Profitability.

Cleaner Production and emission reduction measures, waste management and Common Effluent
Treatment Plant (CETP) facilities.

Energy Service Companies (ESCOs) providing solutions for EE / CP / renewable energy

Original Equipment Manufacturers (OEMs) which manufacture energy efficient / cleaner production /
green machinery / equipment for MSMEs

Objective:
Financial products to enable climate and environmental friendly investments to:
Promote energy saving in Micro, Small and Medium Enterprises(MSMEs) in India, by providing
financial assistance to MSMEs, directly by SIDBI as well as through refinance to Primary
Lending Institutions (PLIs) and Non Banking Financial Companies (NBFCs),
Reduce the emission of greenhouse gases, especially Carbon Dioxide (CO2) to contribute
towards climate change mitigation and achieve a reduction or avoidance of emissions and
pollution through the introduction of financial products
Support MSMEs towards development, up-scaling, demonstration and commercialization of
innovative technology based project.

Needs Addressed
Acquisition, installation, remodeling and upgrading of existing energy saving equipment thus
improving energy efficiency.
Installation of building envelopes, equipments, heating systems, lighting, and such other
equipments electrical power/motors in compliance with energy performance standard provided
in the Energy Conservation Building Code (ECBC).
Alternative/Renewable Energy sources such as Wind Energy (Windmills), Solar Energy
(Photovoltaic & Thermal), Micro Hydro, Biomass/Bagasse (Gasifier/Cogeneration), Municipal
Solid Waste based power generation, etc. (on-grid / off-grid; captive/ non-captive, etc.) and
equipments which can reduce Green House Emission.

 Investments in Effluent and Waste Treatment / Recycling and such other activity which promote
cleaner technology
Investment in activities related to Energy Efficiency or Clean technologies such as energy audit /
environment compliance audit / pollution control & management consultancy services, ratings,
certification, etc. and Energy Service Companies (ESCOs).

Key Benefits
Attractive Rates of Interest on Energy Saving Projects
Reduced Energy Costs & Enhanced Profits
Recovery of valuable by-products;
Improved quality of the finished product
Waste reduction / minimization / Pollution control
Participating in Sustainable Growth
Eligible for Government of India subsidy like TEQUP, CLCSS, TUFS, etc.

Financing Schemes
1) JICA-SIDBI Financing Scheme
Detailed Scheme: JICA -SIDBI financing scheme for MSME projects Phase II (click here)
Energy Saving Equipment List (Version-7.6) click here
Eligibility Criteria for the Units/Industries:
New / existing MSME units, as per the definition of the MSMED Act, shall be eligible for
assistance under the scheme.

Existing units should have satisfactory track record of past performance and sound
financial position and should not be in default to institutions/banks.

Sectors such as the arms industry, narcotics industry or any unlawful businesses are
categorized as non eligible business and shall not be eligible for finance under this
Scheme. Similarly, such projects which may result in larger negative social and
environmental impact would also not be eligible under the Line of Credit.

Renewable sources or technologies such as Wind Energy (Windmills), Solar Energy

(Photovoltaic), Micro Hydro, Biomass/Bagasse (Gasifier/Cogeneration), Municipal Solid
Waste based power generation where a minimum of 50% of the power generated using
alternative energy sources may be utilized directly by the MSME units themselves

2) KfW-SIDBI Financing Scheme

(a) KfW-Energy Efficiency Scheme

Detailed scheme:
KfW Financing EE measures in MSMEs and Cluster (click here)
List of Energy Efficiency measures (click here)
Eligibility Criteria for the Units/industries
Existing MSME units, as per the definition of the MSMED Act, shall be
eligible for assistance under the scheme.

Investments shall result in significant reductions of greenhouse gas

emissions i.e. CO2 emissions reduction of at least 3 tonne of CO2 per
year per 1 Lakh Rupees of loan

(b) KfW-Cleaner Production Scheme

Detailed scheme:
KfW Financing CP measures in MSMEs and Cluster (click here)
List of Cleaner production Measures (click here)
Eligibility Criteria for the Units/industries
Existing MSME units, as per the definition of the MSMED Act, shall be
eligible for assistance under the scheme.

Investment towards improvements in waste treatment handling, raw

material productivity, waste intensity and reduction in air pollution, water
pollution, soil contamination, etc are eligible.

Greenfield investments are not eligible for investments under this scheme
except investments in Central Effluent Treatment Plants (CETP), Waste
Treatment, Storage and Disposal Facilities (TSDF) and waste recycling
plants.

(c) KfW Innovation Finance Programme

Strengthening the MSMEs active on the supply side of clean technologies and which
are engaged in development and adaptation, demonstration, deployment and
commercialization of innovative clean technologies in select sectors (products,
processes and services) The assistance,could be either in the form of secured term
loan or subordinated debt / quasi equity / equity.
A technology can be considered as "innovative" for this purpose if (a) it is not yet
widely available in the respective region. (ii) It has significant impact in terms of
environment and climate protection. (iii) A significant part of the new products,

processes or services is developed or adapted by the beneficiary.

Eligibility criteria for units
New as well as existing well performing MSME units would be eligible for assistance
under the scheme.
Detailed scheme: KfW Innovation Finance Programme

3) Sustainable finance Scheme (SFS)

Sustainable development projects which have significant impact towards energy efficiency /
cleaner production but not covered under the international / bilateral lines of credit as above
shall be assisted under SFS.
Guidelines as applicable under DCS.

World Bank GEF Project - Financing Energy Efficiency at MSMEs

Objective
The objective of the India-MSME Energy Efficiency Project is to improve efficiency and reduce GHG
emissions through commercial investments in energy efficiency goods and services in target Small and
Medium Enterprise clusters.
Global Environment Facility (GEF) and the World Bank through SIDBI and BEE are implementing a new
initiative on financing Energy Efficiency (EE) in MSME Clusters in India to improve EE and reduce Green
House Gas (GHG) emissions from MSMEs utilizing increased commercial financing for EE. The Grant
agreement was signed on September 13, 2010 and effectuation of this grant took place on October 28,
2010. Total GEF Funding under the project available to SIDBI is 9.05 Million USD to be utilized over a
period of four years. In addition to the grant to SIDBI , GEF has also provided a grant of USD 2.25 Million
to the Bureau of Energy Efficiency (BEE) for implementation of energy efficiency at MSMEs in India.. A
Project Management Unit in SIDBI has been setup at New Delhi to channelize the grant to the targeted
beneficiaries.
Under the project, SIDBI will focus largely on five energy intensive clusters viz. foundry cluster at
Kolhapur, Forging at Pune, Limekilns at Tirunelveli, Chemical at Ankleshwar and mixed at Faridabad) in
India through provision of assistance for completion of Energy Audits, preparation of DPRs and support in
mobilization of financing from the Indian local banks to ensure that the identified EE measures are
implemented. SIDBI will also provide broad support to BEE for energy efficiency implementation in
additional 25 clusters where the initiatives are being undertaken by them. The project will focus on four
main activities viz. as 1) Activities to build capacity and awareness for EE in MSMEs, 2) Activities to
increase investments in EE in MSMEs, 3) Programme knowledge management, and 4) Project
management.
- Project Brief
Procurement
-Contract Award Notice - CS 1 to 5 (SIDBI)
-Contract
Award
Notice
-Contract
Award
Notice
-Contract Award Notice - CS 15 (SIDBI)
-Contract Award Notice - CS 20 & 21 (SIDBI)

CS
CS

13
14

(SIDBI)
(SIDBI)

-Contract Award Notice - CS 17,18 & 19 (SIDBI)

-Contract Award Notice CS-09&10 (SIDBI)
-Contract Award Notice CS-060716 (SIDBI)
-Contract Award Notice - CS-11 (SIDBI)
Financial Management
-IUFR Summary - March 2012
-IUFR Summary - June 2012
-IUFR Summary - Sept 2012
-IUFR Summary - Dec 2012
-IUFR Summary - March 2013
-IUFR Summary - June 2013
-IUFR Summary - Sept 2013
Project Outcome
-Cluster Profile Report - Pune (Forging) Cluster
-Cluster Profile Report - Kolhapur ( Foundry) Cluster
-Cluster Profile Report - Faridabad (Mixed) Cluster
-Cluster Profile Report - Ankleshwar (Chemical) Cluster
-Cluster Profile Report - Tirunelveli (Limekiln) Cluster
-Cluster Profile Report_Kolhapur Foundry_Marathi
-Cluster Profile Report_Pune Forging_Marathi
-Cluster Profile Report_Tirunelveli Limekiln_Tamil
-Cluster Profile Report_Ankleshwar Chemicals_Gujrati
-Cluster Profile Report_Faridabad Mixed_Hindi
Partial Risk Sharing Facility (PRSF) Project
-PRSF ERMF Cover Note
-1-1 Report PRSF EMF 22 Apr 2014
-1-2 Appendix PRSF EMF 22 Apr 2014 part 1
-1-2 Appendix PRSF EMF 22 Apr 2014 part 2
-1-2 Appendix PRSF EMF 22 Apr 2014 part 3
-1-2 Appendix PRSF EMF 22 Apr 2014 part 4
-1-2 Appendix PRSF EMF 22 Apr 2014 part 5
-1-2 Appendix PRSF EMF 22 Apr 2014 part 6

Growth capital and equity assistance

Who is it for
Existing Small and Medium Businesses in need of Capital for Growth

Your Needs
You would like to have adequate capital to meet the growth aspirations of your business, but
without

diluting

your

ownership.

You would like to make investments in Marketing, Brand Building, Creation of Distribution
Network, Technical Know-how, R&D, Software Purchase, etc but the lenders you typically
approach

are

not

comfortable

with

such

intangible

assets.

You would like to raise finance on the strength of your business and backing of your cash flows
rather than Asset Cover/ Collateral Security. You would also like to have a longer initial moratorium
on principal instalments to ensure greater chances of success for your ventures.

Scheme Details
Growth Capital and Equity Assistance Scheme provides assistance in form of Mezzanine/
Convertible

Instruments,

Subordinated

debt

and

Equity

(in

deserving

cases).

This quasi assistance has a higher moratorium on repayment and a flexible structuring.

Key Benefits
Bridge the gap in means of finance for scaling up/ expansion/ modernization projects.
Access long term structured assistance especially

for investments in intangible assets

Leverage Equity / Sub Debt Assistance from SIDBI for raising higher debt funds.
Avoid complexities of Enterprise Valuation, Exit Issues etc associated with Equity Investments.

Security (in case of Debt based Instruments)

Charge on available assets of the beneficiary unit and assets created out of SIDBI assistance

Personal

guarantee

of

the

promoters

CGTMSE Coverage, wherever applicable.

Eligibility

An

MSME
SIDBIs

as

per

the

existing

definition
customers

of

Government
(meeting

of

India

(MSMED

internal

rating

Act)

and
criteria)

or
Units with past 3 years of profitability and 2 years of satisfactory banking credit track record
(meeting

internal

credit

rating

Acceptable external rating from CRISIL, ICRA, D&B, SMERA etc would be desirable.

criteria)

Receivable Finance Scheme

We realise that Financial Health of a Small and Medium Business (MSME) depends significantly upon
the speed with which their receivables are realised.
We have, therefore, devised a scheme to to mitigate the receivables problem of suppliers belonging to
Micro, Small and Medium Enterprises (MSMEs) and improve their cash flow / liquidity.
The scheme helps the MSMEs in
Quicker
Discounting

realization
at

of
competitive

receivables.
rates.

Efficient Cash Management.

How does it work?

SIDBI helps mitigate the problem of delayed payments to MSMEs in respect of their credit sales to
large purchaser companies by offering them finance against bills of exchange / Invoices arising out
of such sales.

What is the Scope of Coverage?

The scheme covers discounting of bills of exchange/invoices arising out of sale of indigenous
components / parts / sub-assemblies /accessories /intermediates by an MSME unit. Services
provided by an enterprise in the services sector (eligible service provider) to a Purchaser Company
are also covered.

Description of Transactions under the Scheme

i.
(a)

Limits are sanctioned to:

Well-performing Large Corporates / Purchaser Companies with sound financials for covering

their purchases of components / sub-assemblies / parts / accessories and services obtained from
MSMEs
(b)

MSME sellers for early realization of dues from large Corporates by discounting the bills

ii.

MSME suppliers draw Bills of Exchange on Purchaser companies against supplies made/

services provided by them and the Bills of Exchange are accepted by the Purchaser companies.
iii.

Wherever Bill of Exchange is not furnished by the large Corporates, based on acceptance on

the Invoices and proof of delivery challan/ Goods Received Note, discounting is made as per
agreed terms between the Corporates and SIDBI.
iv.

On a selective basis, in respect of large Corporates, with good repayment track record with

SIDBI, a platform has been created with NSE viz. NTREES where, E-discounting is allowed.
v.

These Bills/ Invoices are discounted by SIDBI within the sanctioned limit and payment effected

(after deducting the applicable discount / retaining the retention margin) directly by way of RTGS /
NEFT to the working capital account of the MSME supplier/ service provider.
vi. On the due date, the Purchaser makes payment to SIDBI either through RTGS or by cheque.
vii. The limits are reviewed / renewed every year.

Who is Eligible for this scheme?

1. Either the Seller or the Purchaser needs to Qualify as SME (manufacturing/service sector unit.)
2.SMEs engaged in manufacturing / undertaking job works relating to sale of Components / Parts /
Sub-assemblies / Accessories/Intermediates /Services etc. to Medium and Large Scale Units;
3.Large Corporates procuring raw materials from MSMEs.

Flexible Assistance For Capital Expenditure

Who is it For
A Greenfield Project or An Existing MSME planning to Modernise, Upgrade Technology, Diversify
by making large Investments in land/ building

Your Needs
You wish to Modernise and create World Class manufacturing Facilities by making large
Investments in land/ building
You are in one of the businesses where a substantial part of your investment would be in land and
buildings with longer economic life.
You wish that different components of your project cost have repayment schedules that take into
account:
Nature of Investment
Economic Life
Expected Cash Flows
You need Flexibility to plan for Capital Expenditure for Immovable and other Fixed Assets jointly or
separately
You wish that Interest Rate for each component is based on their Tenure
Most importantly, you do wish to have longer repayment schedule for longer tenure investment (for
example: land and building)
In other words you need a scheme that takes the shape of your needs.

Scheme Details
Eligibility
New or Existing Small and Medium Sized businesses (MSMEs) Satisfactory Performance and No
default to Banks (Existing Units)

Quantum of Assistance
Need Based. . The assistance can be jointly or separately for each component.

Repayment Period
Immovable Assets:
Other Fixed Assets:

Need based. Not more than 10 years including moratorium

Need based. Not more than 7 years including moratorium

Interest Rate
Based on Rating and Tenure of each component of loan

Finance for Upgradation / Modernisation

SIDBI Understands your need to adopt modern technological processes and undertake capacity
expansion
as
per
your
business
needs.
SIDBI has been identified as a Nodal Agency for the releasing of assistance, monitoring, interface and
coordination
with
Financial
Institutions,
Banks
and
the
Government.
We help New as well as Existing Small and Medium Enterprises benefit from the following Schemes:

Technology Upgradation Fund Scheme for The Textile Industries (TUFS)

Credit Linked Capital Subsidy Scheme (CLCSS)

Integrated Development of Leather Sector Scheme (IDLSS)

FPTUFS Scheme for Food Processing Industries

Technology and Quality Upgradation Support to Micro, Small and Medium

Enterprises

TIFAC- SIDBI Revolving Fund for Technology Innovation

Provide financial assistance to MSMEs towards development, up scaling, demonstration and
commercialization of innovative technology based projects.
The assistance is given in the form of early stage debt funding on softer terms for development,
demonstration and commercialization of new innovations in emerging technological areas, unproven technologies, new products, process, etc. which have not been successfully
commercialized so far.
Maximum assistance is generally not more than `100 lakh per project.
Interest rate would be as approved by the Project Approval Committee (PAC) (not be more than
5% p.a.).
All the proposals for assistance under the Scheme shall undergo technical evaluation by TIFAC
and financial viability by SIDBI. The assistance is approved by a Project Approval Committee
(PAC) consisting of officials of SIDBI and TIFAC.