What is Loan Facilitation & Syndication Service?
- Under this initiative, SIDBI facilitates Bank loans for new as well as existing manufacturing and service sector units.
- SIDBI’s initiative in partnership with Banks, Rating Agencies (RAs) and Accredited Consultants (ACs).
- It’s a transparent, structured mechanism for timely consideration of loan applications.
Why Is It Needed?
- To generate complete structured applications alongwith necessary documents as are needed by Banks for sanctioning of loans.
- Independent Validation by ACs of the information furnished by MSMEs in the loan applications provides a second check thereby enhancing the reliability of furnished information and acts as an additional comfort to the banks in handling the loan applications.
- Rating (not mandatory) of proposals by Rating Agencies, as and when required, provides an independent opinion and helps the bankers for considering applications expeditiously.
- The initiative would reduce delays and is expected to enhance flow of assistance to MSME sector.
Benefits to MSME Entrepreneurs
- Bank Loan Process Made Easier
- mproved Acceptance of the loan proposals by banks
How does it Work?
- SIDBI has empanelled Accredited Consultants (ACs) who will prepare the Basic Information Memorandum (BIM) for the MSME entrepreneurs based on the information and requirements indicated by the MSMEs. It is not only a loan proposal but more than that. BIM will capture all information required by the Banks and the Rating Agencies, if needed,
- BIMs prepared by ACs would be submitted to SIDBI by ACs with the approval of MSME entrepreneur.
- If required, SIDBI may get the proposal rated by RBI approved Rating Agencies.
- SIDBI provides Equity / Quasi- Equity for Growth Oriented existing units, Finance for Service Sector Units, and provides credit to MSMEs for Energy Efficient and Cleaner Production Processes.
- In all other cases, the application would be forwarded to Public Sector Banks with whom SIDBI has entered into a MoU for the purpose of Loans.
- SIDBI, in essence, will handhold the Entrepreneur through all stages of loan processing.
Services provided by Accredited Consultants
- Guide new / existing entrepreneurs regarding availability of schemes of SIDBI / commercial banks
- Inform MSMEs of Government subsidies / benefits
- Provide borrowers with debt counselling
- Prepare Basic Information Memorandum (BIM)
- Facilitate response to queries raised by banks etc.