SIDBI has developed a new app named GST Sahay, which facilitates collateral free lending based on cash flow assessment:
SIDBI has made significant strides in developing many digital ecosystem initiatives and applying financial tools to encourage MSMEs to embrace green practices. Along with the financing role, SIDBI has remained at the forefront of developing innovative solutions to address challenges faced by the MSME sector. SIDBI has leveraged the India Stack to undertake new digital initiatives to strengthen the MSME ecosystem.
PLATFORM & APP
SIDBI has developed Udyam Assist Platform to bring Informal Micro Entities (IMEs) into formal economy by issuing Udyam Certificate. This shall enable access to markets, financial services, and government schemes to IMEs. Over 3 million IMEs have registered as part of the project.
SIDBI has developed a new app named GST Sahay, which facilitates collateral free lending based on cashflow assessment. The app would digitally provide ‘on tap’ invoice-based collateral-free financing to MSMEs.
SIDBI has mentored Finance Income and Trade data-based rank (FIT Rank) for MSMEs that uses GST, ITR and bank statements to assign FIT Rank reflecting relative Probability of default (PD)/ performance/ strength of MSMEs. The FIT Rank will benefit MSMEs in becoming more creditworthy. The rank will also enable assessment of new / first time credit borrowers.
SIDBI has focused on continuous improvements/ refinements in processes as well as digitization of the credit process to improve the quality and delivery of credit under Direct Finance operations. SIDBI’s credit product based on ‘Finance Income and Trade (FIT) Rank’ and ‘CIBIL MSME Rank (CMR)’ to accord sanction through a Straight Through Process, is intended to boost digital lending and flow of credit to the MSME sector.
Green Finance Rises 16X
SIDBI has also introduced several schemes for extending Green Finance to MSMEs. The green finance portfolio of SIDBI rose 16 times in FY 2023 with expected annual energy savings of 330 GWh and reduction of 0.23 mt CO2eq of GHG emission. In FY 2023, the SIDBI Cluster Development Fund gained traction in extending financial assistance to state governments for the development of MSME infrastructure. Cumulatively, 91 projects (64 greenfield & 27 brownfield) have received commitments of Rs54.96 billion up to FY 2023.
Sivasubramanian Ramann, Chairman & Managing Director at SIDBI, says that in FY 2024, the bank will continue to build on the many initiatives undertaken for the development of the MSME ecosystem as well as explore new areas / collaborations to address the various challenges faced by the MSME sector in order to enable its unhindered growth. SIDBI has witnessed significant growth in all business spheres. It achieved the highest-ever outstanding, income, net-profit and balance sheet. SIDBI crossed the milestone figure of balance sheet of Rs4 trillion.
Mission EVOLVE: EV30@30
SIDBI has resolved to prioritize the national mission for e-mobility i.e. EV30@30 through its Mission EVOLVE, with support from NITI Aayog and financial assistance of the World Bank, Korea-World Bank Partnership Facility and Korean Economic Development Cooperation Fund (EDCF). SIDBI has conceptualized EVOLVE (Electric Vehicle Operations and Lending for Vibrant Ecosystem) and shaped it with inputs from 550+ stakeholders. It has already launched 2 financing schemes viz. Direct lending to MSMEs and Scheme for lending to NBFCs.
EVOLVE is being designed to support around 1.5 million EVs and build the ecosystem in the mobility segment. Its approach will seek to leverage the carbon credit to be generated by the program in favour of the beneficiaries.
Ramann has emphasized upon creating a database of EV ecosystem to understand and extend the life of the EVs. The data would be available for policy makers to assess the gaps and further strengthen the EV ecosystem.
Assistance To RRB, UCB, NBFC
SIDBI has undertaken several new initiatives and supported new financial intermediaries to better serve the MSME sector. In FY 2023, it has recommenced refinance assistance to RRBs & Scheduled Urban Cooperative Banks. It has also launched a scheme for mainstreaming assistance to lower rated NBFCs. The bank has introduced Risk Based Exposure Framework for AAA rated and upper layer NBFCs, setting-up special corpus with the objective of building bond market for smaller and low rated MFIs, NBFCs and fintechs. These measures are expected to increase flow of credit to the MSME sector, especially the relatively unserved and underserved enterprises.
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