57 ROLE OF SIDBI IN THE GROWTH OF MICRO, SMALL MEDIUM ENTERPRISE SPECIAL
REFERENCE OF INDORE Dr. Kalam Singh Dudve
Assistant Professor in Commerce Dept. Govt. Nehru PG College Deori, District Sagar (M.P.) Abstract - The Micro, Small and Medium Enterprise (MSME) sector plays a vital role in the growth of our country in creating employment, exports, gross industrial value of output, gross value added, investment in fixed assets, contribution to GDP, and giving boost to manufacture, service and infrastructure sectors. The Micro, Small and Medium Enterprise (MSME) sector plays a vital role in the growth of our country in creating employment, exports, gross industrial value of output, gross value added, investment in fixed assets, contribution to GDP, and giving boost to manufacture, service and infrastructure sectors.
Small Industries Development Bank of India makes constant efforts to provide high level facilities to its beneficiaries, in the present environment the main objective of Small Industries Development Bank of India is to satisfy the beneficiaries and provide them all the facilities. I have tried to understand the problems of the beneficiaries by filling the table and questionnaire, as well as the solutions to the problems have also, The research findings will help in development and growth of SMEs in Indore. Secondly, the research will help suggest possible solutions and strategies to the monitoring development of SMEs. Thirdly, the study will contribute to the body of knowledge and to adding information on the industry as well as Bank.
Keywords: SIDBI Bank, MSMEs, Economic growth and Indore.
1 INTRODUCTION
Small Industries Development bank of India (SIDBI) was set up on April 02, 1990 under an Act of Indian parliament, SIDBI is the principal financial institution for the promotion, financing, development of Micro, Small and Medium Enterprise (MSME) sector and for co-ordination of the function of the institutions engaged in similar activities. Introduction In order to enhance the Small scale sector in the Indian economy, there is a need to establish a separate institution which will exclusively realize the demands of small scale enterprises all over the country.
In view of that, the government of India instituted Small Industries Development Bank of India (SIDBI) under section 3(1) of Small Industries Development Bank of India Act, 1989 as a wholly owned subsidiary of Industrial Development Bank of India (IDBI). After the establishment of SIDBI, all duties related to small scale industries which were earlier performed by IDBI have been shifted to SIDBI. The activities of SIDBI, as they have evolved over the period of time, now meet almost all the requirements of small scale industries which fall into a wide spectrum. "To facilitate and strengthen credit flow to MSMEs and address both financial and development gaps in the MSME eco-
system." To emerge as a single window for meeting the financial and development needs of the MSME sector to make it strong, vibrant and globally competitive, to position SIDBI Brand as the preferred and customer friendly institution and for enhancement of shareholder wealth and highest corporate value through modern technology platform.
2. LITERATURE REVIEW
S. Mathiannan and M. Selvakumar (2008) analyzed the role of female entrepreneurs in SMEs in Virudhunagar District of Tamilnadu. There is a lot needed to be done forsuch women entrepreneurs. Therefore they have suggested that separate cell should becreated in support agencies exclusively for women entrepreneurs like NRI or foreign Investor’s cell.
Raju B (2008) conducted a study and analyzed that Small Medium Enterprises form the backbone of the Indian manufacturing sector and have become engine of economic growth in India. It is estimated that Small and Medium Enterprises account for almost 90 % of industrial units in India and 40
% of value addition in the manufacturing sector.
58 Antima Agrawal and Dr.
Surender Kumar Gupta (2013) Emphasized that The SIDBI being an important nerve of modern organized society can play an important role in the SSIs transformation. It provides the infrastructure on which agriculture;
industries and trade of nation depend.
They can allocate available resources by mobilizing deposits and advancing credit into the best possible uses according to national priorities.
Kumar (2008) examines awareness, utilization, and the level of satisfaction of supporting agencies among women entrepreneurs in Northern India by taking a sample of 450 respondents from five states of Northern India i.e., Haryana, Punjab, Rajasthan, Himachal Pradesh, and Delhi. Subina Syal (2015) Explore that the micro small and medium enterprises (MSMEs) have been accepted as the engine of economic growth and for promoting equitable development.
Anand Chakravarthi (2012) Emphasized that the Micro, Small and Medium Enterprises (MSMEs) sector plays a vital role in the growth of our country in creating employment, exports, gross industrial value of output, gross value added, investment in fixed assets, contribution to GDP, and giving boost to manufacture.
Harish Tigari (2017) Measured that the Industrialization is a progressive measure which creates social and economic change by transforming the human society from pre industrialization to industrial era; Industrialization plays a pre dominant role in the development of the economy, act as a basic fundamental factor which is influenced on the growth prospects of the economy of a country.
3 OBJECTIVES
1. To find out the financial position of SIDBI
2. To find out the Operational Performance of SIDBI)
3. To find out the role of SIDBI for entrepreneurship development 4. To find out the Role of SIDBI in
Economic Growth.
4. HYPOTHESIS OF THE STUDY
1. There is no significant relationship between role of SIDBI in the growth of MSMEs
2. There is no significant relationship between development of entrepreneurship and MSMEs.
3. There is no significant relationship between Economic Growth and role of SIDBI.
5. RESEARCH METHODOLOGY
Research in common parlance refers to search for knowledge. Research simply put, is an endeavour to discover answer‘s to problems (intellectual and practical).
Through the application of scientific method to the knowable definition of research as ―A careful critical inquiry or examination in seeking facts or principles;
diligent investigation in order to as contain something.
The Data required for the study has been collected from secondary sources. The Data Collection includes (i) Annual Reports( 10 years) of SIDBI; (ii) SIDBI’s Reports on MSME Sector; (iii) Ministry of MSME’s releases; (iv) RBI Annual Reports, (v) Various Websites relevant to topics.
Period of the Study: Researcher has chosen a study period of 10 years (from 2007-08 to 2017-18) for the present research work.
Table 1.1 Micro enterprises promotion programmes conducted by sidbi since inception (2006-07 to 2017-18)
YEARS MEPPs SINCE
INCEPTION (in No.) NUMBER OF
MEPPs (in No.) YEARLY GROWTH RATE (%)
2006-07 26000 3600
2007-08 29600 3600 00.00
2008-09 32600 3000 -16.67
2009-10 35000 2400 -20.00
2010-11 37000 2000 -16.67
2011-12 38000 1000 -50.00
2012-13 39000 1000 00.00
2013-14 40300 1300 30.00
2014-15 41500 1200 -08.00
2015-16 42000 500 -58.33
2016-17 42500 500 0
59
2017-18 43000 500 0
Total 446500 20600
Average 37208.33 1716.67
CAGR 04. 68 % -16.43 %
SD 5443.839 1175.379
CV 14.63 % 68.47 %
Source: Annual reports of SIDBI 2007-08 to 2017-18 According to the above table, the number of applications for loans for industries have been submitted by SIDBI in MICRO ENTERPRISES PROMOTION PROGRAMMES from the year 2006 to 2018. The number of these applications was 2000 in 2010-11 and the number of applications received in 2017-18 was 500. The number of applications through the table has been increasing and decreasing in symmetrical size.
Graph 1.1 MEPPs SINCE INCEPTION AND NUMBER OF PROGRAMMES CONDUCTED UNDER MEPP BY SIDBI (2006-07 TO 2017-18)
SIDBI’s developmental activities help entrepreneurs of micro, small, and medium industrial sector to overcome from existing problems, strengthening to face emerging challenges and competition by providing capable managers, skilled workers, make entrepreneurs familiar with latest and up-graded technologies and to accept them. SIDBI run certain programme under developmental activities they are STUP and SIMAP.
5. ROLE OF SIDBI IN INDORE MSME
Table 1.2 Contribution of SIDBI in Entrepreneurial development of Indore Region (2006-07 TO 2017-18)
YEAR NUMBER OF REGD.
ENTERPRISES OF MSME SECTOR
JOB GENERATED INVESTMENT
NUMBER (in
No.) YGR
(%) NUMBER (in
No.) YGR
(%) AMOUNT (in
lakh) YGR (%)
2006-07 603 - 2122 - 1366
2007-08 752 24.71 2266 06.79 3168 131.92
2008-09 789 04.92 2587 14.17 1488 -53.03
2009-10 803 01.77 1720 -33.51 1275 -14.31
0 10000 20000 30000 40000 50000
MEPPs SINCE INCEPTION (in No.) NUMBER OF MEPPs (in No.)
-2 0 2 4 6 8 10
YGR OF NUMBER OF EDPs (%)
60
2010-11 806 00.37 2068 20.23 11990 840.39
2011-12 844 04.71 1900 -08.12 3383 -71.78
2012-13 663 -21.45 1744 -08.21 2695 -20.34
2013-14 807 21.72 1908 09.40 3250 20.59
2014-15 822 01.86 1845 -03.30 3196 -1.66
2015-16 2020 145.74 49672 2592.25 126256 3850.44
2016-17 5778 186.04 146360 194.65 371460 194.21
2017-18 10292 78.12 154704 05.70 345498 -06.99
Total 24979 368896 875025
Average 2081.58 30741.33 72918.75
CAGR 29.42% 27.69 65.37
SD 2965.25 57618 138068.3
CV 142.45 187.43 189.35
CORELATION (r)
REGD. ENTREPREISES AND EMPLOYMENT 0.949
VERY HIGH POSITIVE RELATION
REGD. ENTREPREISES AND INVESTMENT 0.924
VERY HIGH POSITIVE RELATION
EMPLOYMENT AND INVESTMENT 0.997
VERY HIGH POSITIVE RELATION
Source: DTIC, Indore The study is evident from the fact that
SIDBI gives fillip to MSME which play a significant role as the growth engines of the Indian Economy. In fact, MSME have been playing a critical role in the socioeconomic development of the country, with main objectives of mass employment generation, low investment, import substitution and export promotion labor intensive mode of production, capacity to develop indigenous technology and high contribution to domestic production. Since MSME is playing a greater role in developing the MSME sector, there is a greater need for doing this study.
7. ROLE OF SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
Before studying the SIDBI’s contribution in MSME sector it is necessary to understand the MSME sector, therefore it is defined below -SIDBI supported wide range of network of 634 lakh units of MSME entrepreneurship creating more than 1110 lakh opportunities of jobs, manufacturing 7500 and more products (2015-16, 73rd National Sample Survey) and contributes Rs. 958692.35 cr. in the total export of India (2017-18)
8 IMPORTANCE OF THE STUDY
The Economic development of any country depends on the extent to which its financial system sufficiently and effectively mobilizes and allocates
Resources for maximum profit. Thus, there is an obvious need for higher level of professionalism in sensing opportunities, making plans and managing the entrepreneurial ventures to succeed. The need to manage the entrepreneurial enterprises more effectively in the present era is more than ever before. In our country there is no dearth of resources, whether material or human. What is essentially lacking is effective management. It is a myth that management skills are primarily required for large sized firms. There is a great need for importing managerial skills to a very large number of persons who are either currently employed in, or are potential/operational owner managers of small business enterprises. Management techniques applied in large firms cannot just simply be scaled down to be applied to the small scale firms. There is a need for appreciating the issues, problems and prospects of small business firms/
enterprises/factories in more realistic setting.
9 LIMITATIONS OF THE STUDY
Like any other study, the current study also has certain limitations which are as follows:
1. Some of the entrepreneurs were showing disinclination to disclose correct information pertaining to their business. This may come as
61 barrier in pursuing the research
work.
2. The study covers a limited time period of 10 years of operations of the SIDBI. Hence the results of this study are valid for this particular period and prediction beyond this time period may not be so reliable.
3. The financial performance evaluation carried out by the researcher is time and situation specific.
10 CONCLUSION
The performance of MSMEs is depend on Small Industries Development Bank of India with positive results in the growth and development of the state. The impact of priority sector on employment level shows a significant increase with the income of the borrowers thereby further improving their economic and social status. Further results show an increase in the satisfaction level of the beneficiaries. These developmental initiatives would not only address the emerging needs of the sector, but also will create employment opportunities in this productive sector of the economy.
REFERENCES
The journal of Indian Institute of Banking and Finance
SIDBI Annual Reports
www.sidbi.com
www.iisd.org
www.msme.gov.in
Annual reports of MSME,S
Journals
1. S. Mathiannan and M.Selvakumar. (2008). A Study on Socio Economic Background and Status of Women Entrepreneurs in Small Scale Industries. Indian Journal of Marketing , XXXVIII (5), 35-41.
2. Kumar, A. (2008). Awareness of supporting agencies among Women Entrepreneurs in Small Businesses. Icfai Journal of Entrepreneurship Development , Vol. V, No.4, pp. 6-17.
3. Harish Tigari (2017) Growth and Performance of MSME enterprises in India, Shanlax International Journal of Commerce, Vol. 5 No. 4 October 2017 ISSN: 2320-4168
4. K. Sankara Rao, Abdul Rahman Noorinasab (2013) The Role of SIDBI in developing the MSMEs in India, IOSR Journal of Economics and Finance (IOSR-JEF) e-ISSN: 2321-5933, p- ISSN: 2321-5925.Volume 1, Issue 6 (Nov. – Dec.
2013), PP 08-14
5. Raju B, Y. (2008). Small and Medium Enterprises (SMEs) in India: Past, Present and Future. in the PHDCCI Working Paper , p. 10.
6. K. Kalidoss (2015) Role of SIDBI for the promotion and development of MSME’S in India, Shanlax International Journal of Arts, Science & Humanities, Vol. 2 No. 3 January 2015 ISSN: 2321 – 788X.
7. Dr. Kh. Dhiren Meetei, Mrs. Soma Devi Moirangthem (2012) A study on role of SIDBI for credit support services (with special reference to North eastern region), International Journal in Multidisciplinary and Academic Research (SSIJMAR) Vol. 2, No. 4, July- August (ISSN 2278 – 5973)
8. Tarak Shah, Anshu Khedkar (2006) SIDBI – A Successful Financial Institution in SME Financing, Indian Institute of planning and management, Ahemdabad (IIPM)
9. Vivek Singla (2013) Evaluation of financial performance of SIDBI, International Journal of Advanced Research in Management and Social Sciences, Vol. 2, No. 12,Dec. 2013, ISSN: 2278- 6236
