SIDBI Current Affairs

SIDBI celebrates its foundation day

The Small Industries Development Bank of India (SIDBI) celebrated its foundation day this year on April 2, 2018. The day was celebrated as day of Sampark (connect), Sanwad (interaction), Suraksha (security) and Sampreshan (disseminate). Several initiatives were launched on this occasion. They are MSME contact programme; Samridhhi, a virtual assistant; revamped SIDBI website (www.sidbi.in) and Bankability Kit.

Small Industries Development Bank of India (SIDBI)

SIDBI is the principal development financial institution for promotion, financing and development of Micro, Small and Medium Enterprises (MSME) sector in India. It was established on April 2, 1990 through an Act of Parliament (thus, it is statutory body). It is headquartered in Lucknow, Uttar Pradesh.

SIDBI aims to facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in MSME eco-system across the country. It co-ordinates functions of institutions engaged in similar activities. Currently, the shares of SIDBI are held by Central Government and 29 other institutions including public sector banks (PSBs), insurance companies owned and controlled by Central Government.

MSME Sector

MSME is second largest employment generating sector after agriculture sector. It provides 80% of jobs in industry with just 20% of investment. It contributes around 31% to nation’s GDP and 45% and 34% share of the overall exports and manufacturing output (2017 report).

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CriSidEx: CRISIL, SIDBI launches India’s first MSE Sentiment Index

The SIDBI (Small Industries Development Bank of India) and ratings agency Crisil have launched CriSidEx, India’s first MSE Sentiment Index for micro, small and medium enterprises (MSMEs). The index will help to indicate the current state and expected outlook on the MSME sector every quarter.

CriSidEx

CRISIL-SIDBI MSE Sentiment Index (or CriSidEx) has been developed jointly by CRISIL and SIDBI. It is a composite index based on diffusion index of 8 parameters. It measures MSE business sentiment on a scale of 0 (extremely negative) to 200 (extremely positive).

The parametric feedback for the index will be captured through a survey of 1100 MSEs. CriSidEx will have 2 indices, one for ‘survey quarter’ and another for ‘next quarter’. Once trend emerges after few rounds of survey, it will provide independent time series data.

Significance of index

  • Provide crucial insights into employment, business environment and foreign trade in MSME sector.
  • Allow policy makers to take timely proactive steps, including those based on early warnings thrown up by survey of index.
  • Provide intelligence and insights for regulators, trade bodies, lenders as well as economic and financial analysts.
  • Help in forecasting business environment by capturing sentiment on various business parameters such as business situation, capacity utilisation, order book and margins.
  • Flag potential headwinds and changes in production cycles in MSME sector and thus help in improving market efficiencies.

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