SIDBI is the principal financial institution for the promotion, financing and development of industry in the small scale sector. The Small Industries Development Bank of India provides direct credit schemes for Micro, Small and Medium Enterprises
Purpose Development Bank of India
A quasi equity for Micro, Small and Medium Enterprises where the promoter is short of risk capital
Eligibility/ purpose of the loan
The loans are available to Micro, Small and Medium Enterprises who have atleast 5 years of existence of which the last 3 years should have been profitable. (Net profit). Also the unit should not be in default to any bank or other financial institutions with a good financial track record of two years at the leat.
How the assistance is provided
The assistance is provided as a loan and also as convertible instruments. In certain cases the SIDBI will also have an equity stake.
Amount of Loan
Debt assistance would be restricted to a maximum of 1/3rd of the ‘tangible net worth. The amount of assistance would not normally be below Rs. 50 lakh.
Rate of return
IRR/ interest of 13.25 to 14.5% p.a. (depending on credit rating).
Dividend rate of 14.25 to 15.5% p.a. (depending on credit rating).
Moratorium
Upto 3 years depending upon needs
Tenure
Total tenure of assistance including moratorium period could be upto 7 years