Performance of SIDBI in Financing MSMEs in India

The objective of the paper is to analyse the role of Small Industries Development Bank of India (SIDBI) in promotion, financing and development of Micro, Small and Medium Enterprises (MSME) in India. The study is based on secondary data collected from database of SIDBI, Annual Survey of industries and other reports. More than 87% of the MSMEs are not availing any credit facility from any bank/financial institution. They are running their units either from self finance or borrowing from friends/relatives etc. This indicates the clear picture that MSMEs are not getting finance from banks/financial institutions due to stringent banking/financial norms, non-availability of collaterals, compliance with documentation requirements. The percentage of MSMEs getting finance through institutional sources are 10.87%, from non-institutional sources are 1.05% and finance through both institutional and non-institutional sources constitute 0.84%. The total MSME outstanding credit of the Bank increased to Rs.64,313 crore as on March 31, 2014 from Rs.58,751 crore as on March 31, 2013. SIDBI in financing of MSME is slowly increasing over the years.