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Unit 8: Financial Institutions

useful learning experience under which assistance of ` 30. 71 crore was sanctioned to 142 Notes
intermediary NGOs till March 31, 1999.
With the pilot programmes attaining the take off stage, a demand for up scaling SIDBI's
micro credit programme emerged. Further, the lessons learnt during the pilot phase
necessitated certain changes in MCS.

The Bank took up itself the task of setting up of SIDBI Foundation for Micro Credit (SFMC).
The SFMC, launched in November 1998 on an all India basis, is presently functioning as a
new department within SIDBI at Lucknow.
The mission of SFMC is to create a national network of strong, viable and sustainable
Micro Finance Institutions (MFIs) to provide wide ranging micro finance services to the
poor. The Bank renders a customized package of assistance to these MFIs consisting of a
mix of loan, equity and need-based assistance for capacity building.

It endeavors to promote and develop these agencies into strong financial intermediaries,
which would act at major players in the micro credit segments, especially for reaching out
to smaller NGOs and MFs, and for building their capabilities through in credit delivery
and usage. Besides, the programme also aims at promoting best practices and introduction
of innovative features that would contribute to financial viability of micro credit
programmes, which would, in turn, ensure appropriate financial services to the poor.
SFMC provided so far assistance aggregating ` 21.90 crore to 31 MFIs. The assistance is
likely to benefit about 105700 poor persons.
The cumulative sanctions by the SIDBI since its inception amounted ` 52.61 crore to 160
MFIs, covering over 313,700 poor.
Keeping in view its intent and purpose, SFMC is now focusing on a limited clientele
consisting of large MFIs having considerable growth potential. The selected MFIs are
proposed to be developed and nurtured as long term partners who would act as major
financial intermediaries for delivering efficient, convenient and timely micro products
and services to the poor.
The SIDBI has so far sanctioned assistance of the order of ` 7.86 crore under this scheme to
as many as 151 NGOs for the benefit of about 19250 women. This assistance is dispensed to
provide training and employment opportunities to women in rural areas by facilitating
creation of suitable infrastructural facilities.
It has been the policy of the SIDBI to institutionalize the Entrepreneurship Development
Programme (EDP). Accordingly, the Bank provides support to NGOs and specialised
agencies for conducting specially designed programmes covering various target groups,
which would result in promotion of enterprises.

Sensing the importance of human resource management in small-scale sector, the SIDBI
has decided to address the human resources development needs of the SSI sector by acting
as a conduit between reputed management/technology institutions and the SSI sector.
The Bank supports these institutions to offer tailor-made management development
programmes, viz., Small Industries Management Programme (SIMAP) and Skill-Cum-
Technology Up gradation Programme (STUP).
The SIDBI launched Technology up gradation programme in 1994 with the sole objective
of encouraging adoption of improved technology in homogenous clusters. The reach of
the programmes was extended in 1998-99 to include issues like marketing, export
promotion, and finance which are relevance to SSI units and assume more significance in
the traditional clusters.

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