SIDBI's total gross income grows 17.2% to Rs. 5,401 cr in FY13

The Small Industries Development Bank of India (SIDBI), India's Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector, held its 15th Annual General Meeting (AGM) on June 13, 2012, at Lucknow and announced a total gross income of the Bank Rs. 5,401 crore for FY 2012-13 (a growth of 17.2%) as compared to Rs. 4,607 crore in the previous year.

The net profit after tax also increased by 47.7% to Rs. 837 crore as compared to Rs. 567 crore in the previous year. However, of these, Rs. 187 crore was a one-time refund from Income Tax Department, including interest of Rs. 45 crore. Excluding this, the growth in net profit is 14.6%. Gross and Net NPA as a %age of its net outstanding stood at 0.98% and 0.53% as on March 31, 2013. The Networth of the Bank increased to Rs. 7,046 crore during FY 2012-13 and the Earnings Per Share (EPS) have improved to Rs. 18.61 as against Rs. 12.60 in FY 2011-12.

The AGM approved the payment of dividend of 25% for FY 2012-13. The meeting was chaired by Shri S. Muhnot, Chairman and Managing Director and attended by its Directors and shareholders.

Mr. Muhnot, in his address to the shareholders, detailed the progressive role of SIDBI as the principal financial institution for the MSME sector and highlighted the launch of its new business strategy which is to address the financial and non-financial gaps in the MSME eco-system and make the MSME sector globally competitive. "We have adopted the new business model under which our focus has been on specialized financing products which have shown 45% growth from Rs. 6,321 crore in FY 2012 to Rs. 9,155 crore during the year under review," he said.

Under its new business strategy, SIDBI provides financing to MSMEs in niche areas which are generally not covered by the banking system. Such specialized financing is in the form of risk / venture capital, loans for improving energy efficiency and implementing cleaner production technologies, loans to the service sector, receivable financing / factoring, etc. At the same time, SIDBI has also taken strategic initiatives for addressing various non-financial gaps for capacity building of MSME sector as well as bankers. These activities include Credit Advisory Services covering over 300 clusters, Loan Facilitation through a mechanism of accredited consultants, rating agencies and commercial banks, information dissemination through a dedicated website 'www.smallB.in' on how to set up an enterprise to promote youth entrepreneurship.

Mr. Muhnot also mentioned about the budgetary support proposed for the benefit of the MSME sector. He said that the enhanced refinance capability of Rs. 10,000 crore would help SIDBI to provide greater financial support to MSMEs. Further, additional budgetary support of Rs. 200 crore under India Microfinance Equity Fund would facilitate the process of providing need based equity and quasi- equity to smaller MFIs to help them maintain growth and achieve scale and efficiency in their operations, particularly in underserved States. Mr. Muhnot also informed that SIDBI, alongwith Govt. of India, is drafting the Guarantee Scheme for factoring for which a corpus of Rs. 500 crore was announced in the budget.

SIDBI has been consistently addressing the information gaps by ensuring availability of relevant information to MSMEs. In this direction, SIDBI set up, for the first time, a website www.smallB.in to promote entrepreneurship among the youth, besides availability of relevant information to existing MSMEs on various schemes, handholding new entrepreneurs on how to set up a business, access to finance, government schemes, etc. as provided therein. The website also provides guidance to existing entrepreneurs on how to access markets, growth finance, and other relevant information to make them grow. This website has already received more than 13 lakh hits over a period of last six months reflecting the relevance in the current context.

Similarly, to address the non-financial gaps, SIDBI has covered more than 300 clusters across-the-country by way of Credit Advisory Centres. These centres provide free consultancy services to MSMEs in areas like how to fill up loan application forms, access to finance, government schemes etc.

Similarly, loan syndication services have been launched across the country with the help of 230 Accredited Consultants and all the seven rating agencies in the country, besides entering into MoU with 7 banks. This initiative will facilitate faster credit delivery to MSMEs.

As a last mile credit connectivity to MSMEs, SIDBI has started capacity building of RRBs/UCBs / DCCBs to enable them to handle micro enterprise loans. So far, SIDBI has entered into MoU with 19 RRBs/UCBs and under the Training of Trainers' programmes, about 81 officials of 22 RRBs/UCBs and 21 Knowledge Partners have participated.

SIDBI achieved another milestone on its business front by setting up an International Cooperation Vertical. The first assignment was signed with Social Fund for Development (SFD), Egypt, with funding support from the World Bank for the SME sector development in Egypt. The MoU was signed on March 20, 2013 in the presence of the Egyptian President, while on visit to India and the initiative was formally launched on May 16, 2013 in the presence of CMD, SIDBI; HE Mr. Navdeep Suri, Indian High Commissioner to Egypt; MD, SFD Egypt; Country Manager, IFC, Egypt & Country Director, Egypt, Yemen and Djobouti, The World Bank.

SIDBI also got 2 international awards during the year 2012-13 from Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) in the areas of (a) Energy Efficiency Improvements in Furnaces used in SME Steel Industry Clusters in India; and, (b) WB-GEF Project: Financing Energy Efficiency in MSMEs under the category of Environmental Development in 5 clusters.

Source : Equity Bulls

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