Does SIDBI provide loans directly to small businesses or only through banks/NBFCs?
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Yes, SIDBI provides both direct and indirect loans to small businesses. Through its direct lending operations, SIDBI offers various schemes such as SMILE (Make in India Soft Loan Fund for MSMEs), SEF, SPEED, and STFS, which support working capital needs, machinery purchase, and other business requirements. These loans are tailored for different segments, including women entrepreneurs and businesses from marginalized communities. At the same time, SIDBI plays a major role in indirect financing by offering refinance and credit support to banks, NBFCs, small finance banks, and microfinance institutions, which then lend to MSMEs. As of 2023, about 8% of SIDBI’s loan portfolio comprised direct lending to MSMEs, while around 92% was routed indirectly through other financial institutions. SIDBI has plans to gradually increase its share of direct lending in the coming years.
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