SIDBI Assistance To Export Oriented MSMEs Under Ubharte Sitaare Programm

To facilitate the flow of credit to Export Oriented MSMEs, the Small Industrial Development Bank of India (SIDBI) has recently launched a scheme called SIDBI Assistance To Export Oriented MSMEs Under Ubharte Sitaare Programm. Under this Scheme, Financial Assistance is provided to borrowers of SIDBI for expansion, modernization, diversification, and technology/capacity up-gradation. The eligible MSMEs will be assisted with technical consultancy and financial facilitation at a better interest rate. The current article briefs the SIDBI’s new Scheme in detail. Get your IEC through IndiaFilings

Note on Ubharte Sitaare Programme

For the very first time, during Budget 2021, Finance Minister, Smt. Nirmala Sitharam announced the Ubharte Sitaare Programme (i.e., USP). As per the announcement, the program aims to eradicate the constraints faced by small and mid-sized companies in realizing their export ambitions. India Exim Bank will anchor the said Programme along with SIDBI. Acting further, an Alternative Investment Fund, launched ‘Ubharte Sitaare Fund,’ was successfully registered with the Securities and Exchange Board of India (SEBI) in July 2021. Here, India Exim Bank and SIDBI have contributed INR 40 Crore each. The total corpus of the fund is INR 250 Crore.

The Essential Feature of the Programme

The essential feature of the Programme is as follows:

• The companies having adequate technology, product or process will first be identified.
• The identified company will be supported via a mixture of equity, debt, and technical Assistance.
• Significantly, the support can also be extended to underperforming companies having good export potential.

A key objective of the Scheme

The primary objective behind the introduction of the Ubharte Sitaare Programme is listed hereunder:

• To support the  MSME units, which cannot scale up their export operations due to lack of finance, having export potentials.
• To identify and encourage the firms to have differentiated products, processes, or technology and to enhance the export business.
• To help the existing exporters widen their products and target new export markets.
• To identify and ease various challenges hindering the exports that successful enterprises face.

Key Features of the Scheme

The key features of the SIDBI Assistance To Export Oriented MSMEs Under the Ubharte Sitaare Programm are listed as follows:

• The SIDBI Assistance To Export Oriented MSMEs Under the Ubharte Sitaare Programm scheme offers an attractive Return on Investment (ROI), and the loan will be sanctioned very quickly
• The promoters’ contribution under the Scheme is limited to 20% and 30% for greenfield units
• SIDBI offers financial Assistance in the form of Term Loans/ Foreign Currency Term Loans ( FCTL)
• Technical Assistance for mentorship support and equity support is also provided under the Ubharte Sitaare Programm
• SIDBI also offers up to 25 bps performance or milestone-linked interest incentives to the eligible unity.

Eligible Enterprises Eligible Enterprises

Enterprises eligible under the SIDBI Assistance To Export Oriented MSMEs Under Ubharte Sitaare Programme are listed below:

• Future export champions with high potential are eligible to apply for the Scheme
• SIDBI’s target entity under the Scheme is Units having unique technology, products, or processes
• The following high export potential sectors are eligible for financial Assistance under the Scheme:
  • Automobiles
  •  Aerospace & Defence
  •  Chemicals
  •  Food Processing
  •  IT & ITeS
  • Pharmaceuticals
  • Precision engineering
  • Textiles and allied sectors

Eligibility Criteria

The eligibility criteria for availing of the loan under the Ubharte Sitaare Programm are listed as follows:

Eligibility Criteria for New units

Promoters with sufficient experience in the proposed line of business and significant projected export revenue are eligible for this Scheme. For units co-funded by technocrats from premier institutions (like Indian Institutes of Technology, Indian Institutes of Management, Indian Institute of Science, National Institute of Technology, etc.), sufficient experience in the proposed line of business shall not be insisted upon.

Eligibility Criteria for Existing units

• Fundamentally strong export-oriented small and mid-sized companies with good financials can apply for the Scheme.
• Standard Norms apply (Credit Information Bureau India Limited (CIBIL) / CMR, due diligence checks, etc.)

Quantum of Assistance

SIDBI provides Need-based financial Assistance, subject to a maximum of 80% of the project cost. Joint financing with EXIM Bank is also available under the SIDBI Ubharte Sitaare Programme. As mentioned above, SIDBI offers financial Assistance in the form of Term Loan/ Foreign Currency Term Loan( FCTL) Term loans are provided to Export-oriented MSMEs for expansion, modernization, diversification, technology/capacity up-gradation, product R&D by investment in land and building, machinery and equipment, etc.

Interest Rate

The interest rate for the loan under the SIDBI Assistance to Export Oriented MSMEs Under Ubharte Sitaare Programm will be Based on the MCLR of the Bank / Repo rate, with applicable spreads (as per internal rating)

Repayment Period

SIDBI offers a repayment period of Up to 6 years, including a moratorium period of Up to 2 years under the Ubharte Sitaare Programm scheme. Note: The repayment period may be Extendable up to 10 years

Documentation for AROG Scheme

SIDBI offers a simple one-page application and built-in checklist for SIDBI Assistance To Export Oriented MSMEs Under Ubharte Sitaare Programm). Standard KYC checks and due diligence are available for the Ubharte Sitaare Programs.

Scheme Application Procedure

The eligible MSME must access the SIDBI’s online application page to apply for the Scheme. The online Registration Login page will display; by clicking on the Registration tab, a new user can register in SIDBI and avail of the loan. The applicant entity needs to provide the details of the Enterprise Name, Phone number, Email, and Proposed Total Loan Requirement. The username and password will be provided to the entity upon successful registration. After login into the portal, the applicant must fill in a simple one-page application and built-in checklist. After the Standard KYC checks and due diligence, the loan amount will be credited to the applicant’s account within 48 hours.