The Small Industries Development Bank of India (SIDBI), India’s Principal Financing Institution for the promotion, financing and development of Micro, Small and Medium Enterprises (MSMEs), celebrated its 20th Foundation Day on April 2, at a function held at Vigyan Bhawan in New Delhi. The Function was inaugurated by the Hon’ble Finance Minister Padma Vibhushan Shri Pranab Mukherjee. The Hon’ble Minister of State for Finance, Shri Namo Narain Meena was the guest of honour. Shri Dinesh Rai, Secretary, Ministry of MSME and Shri R. Gopalan, Secretary, Department of Financial Services also graced the occasion.  The function was also attended by the senior officials from various Ministries, Chairmen and Executive Directors of various banks, State Financial Corporation, Micro Finance Institutions, senior functionaries of several corporates, MSMEs, industry associations, senior bureaucrats, multi-lateral institutions and international experts and SIDBI Board Members.

Shri R M Malla, CMD, SIDBI, in his welcome address, presented SIDBI’s memorable journey of 20 years, towards the empowerment of the MSME sector. Set up on April 2, 1990 by an Act of Parliament, SIDBI has evolved itself as a one-stop shop for MSMEs by offering a variety of services, besides refinance, such as, Direct Credit, Micro-finance, Risk Capital, Promotional and Developmental Support, Capacity Building Measures, Credit Guarantee, Credit Rating, Technology Transfer and Asset Reconstruction. All these services of SIDBI have enabled MSMEs to become internationally competitive. Since its inception, SIDBI’s various support measures have benefitted more than 215 lakh persons.  SIDBI has disbursed over Rs. 1,60,000 crore to MSMEs over the years.

The FM, in his special address, mentioned that the MSME sector is the pillar of the Indian economy.  He noted that finance is a highly effective tool for fighting poverty and promote inclusive growth. He mentioned that though the year 2009-10 began with difficult global scenario, good news is that world economy is showing the signs of recovery.  Further, the fast growth displayed by the Indian economy is indicative of its inherent strength. The resilience, dynamism displayed by MSMEs have in these challenging times show the critical role of this vibrant sector.

Highlighting the Government of India’s efforts towards promoting this vibrant sector, the FM stated various measures of the Government including enhancement in the limit for presumptive taxation, increasing the threshold for compulsory auditing of accounts of small businesses, extension of interest subvention for exports in certain sectors and exemption from capital gains tax to facilitate conversion of small businesses to Limited Liability Partnership (LLP) format.

The FM said that the economy will grow by 7.2% in the year 2009-10 and further that the growth rate for the year 2010-11 will be in the range of 8.25-8.75%.  Summarizing the various measures taken in the Union Budget 2010, the FM expressed his optimism that the economy will soon return to the high annual growth of 9% in near future.
 
The FM commended SIDBI for its various promotional and developmental measures for the capacity building of the MSME sector, besides the financial assistance extended to the sector. 

The highlights of the event included the handing over of three lakh-th credit guarantee approval under the Credit Guarantee Scheme of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). CGTMSE, set up by Government of India and SIDBI to provide credit guarantee for collateral free/ third party guarantee free loans, covers loans upto Rs 100 lakhs to Micro and Small Enterprises.
The FM also launched the Green Ratings for MSMEs, a first of its kind in India, by SME Rating Agency of India Ltd. (SMERA). SMERA has been set up by SIDBI, Dun and Bradstreet and public sector Banks as the third-party independent rating agency, exclusively for MSMEs, dedicated to provide comprehensive, transparent and reliable rating and risk profiling.  
Another highlight of the function was the release of SIDBI Report on MSME Sector, 2010, and an MSME dedicated magazine named OPTIMiSM by the FM.  Releasing these publications, the FM hoped that these will bridge the information gap and provide useful references for policy makers, planners, researchers, and all other stakeholders. Shri Namo Narain Meena released SIDBI’s Corporate Social Responsibility Report, 2010, possibly the first such report in India’s financial services sector.
The function also witnessed felicitation of several outstanding MSMEs assisted by SIDBI for their achievements and also release of micro credit assistance. Shri Rakesh Rewari, DMD, SIDBI proposed the vote of thanks to all.