October 04, 2023: Smt. Nirmala Sitharaman, Hon’ble Minister of Finance and Corporate Affairs, Government of India, inaugurated a new branch of Small Industries Development Bank of India located at Avinashi Road,Coimbatore, which is close to industrial estates like Kurichi,Mopperipalayam, Kallapalayam, and industrially developedareas like Arasur and Sulur, to cater to the MSME’s growingfinancial requirements. Smt.Vanati Srinivasan, MLA,Coimbatore South, Shri Vivek Joshi, IAS, Secretary,Department of Financial Services, Ministry of Finance, Government of India, Shri Sivasubramanian Ramann, IA&AS CMD, SIDBI and Shri Sudatta Mandal, Deputy Managing Director, SIDBI, graced the occasion.
In her opening remarks, Hon’ble Finance Minister mentionedthat MSMEs are a vital part of the Indian economy and have made significant contributions to the country’s socio-economic growth. MSMEs make a crucial contribution to India’s GDP, are the second-largest employment provider, and have significant contribution on the overall exports of thecountry. Considering this, she reiterated that the need forproviding ‘timely and adequate credit’ to MSMEs bybanks/FIs.
She mentioned that the issues like delayed payment, collateral, etc. needs to be addressed in a more holistic mannerso that the MSMEs being the backbone of the country arebenefitted.
She mentioned that SIDBI has been set up as the PrincipalFinancial Institution for Promotion, Financing and Development of MSMEs in the country. SIDBI has been playing a catalytic role in creating vibrancy in the MSME ecosystem and has carved a very crucial role for itself in India’s industrial economy.
She mentioned that SIDBI was pre-dominantly doing indirectfinance as mandated and, it reached out to the MSMEs through Banks, NBFCs, MFI etc. and have now felt that the financial needs of MSMEs are dynamic and need to be met in a timely and cost effective manner. With this background, SIDBI started the direct finance which is around 10% of total credit to MSMEs. However, the 10% of the credit has its relevance and needs to be increased to 20% and further. She further informed that, today, SIDBI is fully digitized and caterto the varied needs of the MSME with its innovative products.
SIDBI is now expanding and opening branches in industrial clusters and has more than 90 branches and expected to cross over 100 shortly. Hon’ble Finance Minister further mentioned that there are more than 400 plus clusters in India andexpressed hope that SIDBI which already has cluster presencewould widen its reach in the days to come.
SIDBI has been at the forefront of providing innovative solutions to the issues faced by/requirements of MSMEs. It has created a green and digital credit delivery system for extending credit promptly to MSMEs at competitive terms and has also set up TReDS exchange platform in joint venture with NSE for addressing the issue of late receivables.
The digital journey like account aggregator has also played amajor role in augmenting the credit flow to MSME. Thebudget proposed an amendment to the Income Tax Act. Itensures that the buyers can
claim deduction in income tax only on payments made to aMSME supplier. In short, a company can’t
claim the expense under the act until the payment has actuallybeen made to the seller.
Shri Sivasubramanian Ramann, CMD, SIDBI mentioned thatSIDBI has fully digitized its lending processes, which enablesextending financial assistance in 48 hours. SIDBI has recentlylaunched a fully automated Straight Through Process to sanction loans up to Rs. 100 lakh online within a couple ofhours.
CMD, informed that SIDBI has been involved in introducing policies for providing timely financial assistance and liquidity to MSMEs. Towards this, SIDBI has launched a new invoice platform, viz. GST Sahay, which will reduce the problem ofdelayed payments and consequential cash flows mismatchesfor the MSMEs. The GST Sahay will be an invoice-financing marketplace where MSMEs can use their unpaid purchase andsale invoices to get quick working capital loans.
He emphasized on the need to switchover from fossil fuel to renewable energy like solar, wind etc., with a view to becomemore sustainable and remain competitive and be part of thenational commitment on energy independence and carbon neutrality. He mentioned that SIDBI is committed toincreasing finance flow towards green asset creation.
SIDBI Coimbatore South Branch Office has taken necessarysteps for securing Green Interior Certification from the Indian Green Building Council (IGBC). The branch will continue to work closely with MSMEs, Associations and all the stakeholders to provide focused financial support to MSMEslocated in Coimbatore and nearby areas. Besides financial assistance, SIDBI is dedicated to extending development support to entrepreneurs in their growth journey.
