SIDBI Receivable Finance Scheme

Organization : Small Industries Development Bank of India
Scheme Name : Receivable Finance Scheme

Website : http://www.sidbi.com/?q=receivable-finance-scheme

Receivable Finance Scheme:

We realise that Financial Health of a Small and Medium Business (MSME) depends significantly upon the speed with which their receivables are realised.

Related : SIDBI Growth Capital & Equity Assistance :www.statusin.in/20230.html

We have, therefore, devised a scheme to to mitigate the receivables problem of suppliers belonging to Micro, Small and Medium Enterprises (MSMEs) and improve their cash flow / liquidity.

The scheme helps the MSMEs in:
** Quicker realization of receivables.
** Discounting at competitive rates.
** Efficient Cash Management.

How does it work?:
SIDBI helps mitigate the problem of delayed payments to MSMEs in respect of their credit sales to large purchaser companies by offering them finance against bills of exchange / Invoices arising out of such sales.

What is the Scope of Coverage?:
The scheme covers discounting of bills of exchange/invoices arising out of sale of indigenous components / parts / sub-assemblies /accessories /intermediates by an MSME unit. Services provided by an enterprise in the services sector (eligible service provider) to a Purchaser Company are also covered.

Description of Transactions under the Scheme:
i. Limits are sanctioned to:
(a) Well-performing Large Corporates / Purchaser Companies with sound financials for covering their purchases of components / sub-assemblies / parts / accessories and services obtained from MSMEs
(b) MSME sellers for early realization of dues from large Corporates by discounting the bills

ii. MSME suppliers draw Bills of Exchange on Purchaser companies against supplies made/ services provided by them and the Bills of Exchange are accepted by the Purchaser companies.
iii. Wherever Bill of Exchange is not furnished by the large Corporates, based on acceptance on the Invoices and proof of delivery challan/ Goods Received Note, discounting is made as per agreed terms between the Corporates and SIDBI.
iv. On a selective basis, in respect of large Corporates, with good repayment track record with SIDBI, a platform has been created with NSE viz. NTREES where, E-discounting is allowed.

v. These Bills/ Invoices are discounted by SIDBI within the sanctioned limit and payment effected (after deducting the applicable discount / retaining the retention margin) directly by way of RTGS / NEFT to the working capital account of the MSME supplier/ service provider.

vi. On the due date, the Purchaser makes payment to SIDBI through RTGS.
vii. The limits are reviewed / renewed every year.

Who is Eligible for this scheme?:
** Either the Seller or the Purchaser needs to Qualify as SME (manufacturing/service sector unit.)
** SMEs engaged in manufacturing / undertaking job works relating to sale of Components / Parts / Sub-assemblies / Accessories/Intermediates /Services etc. to Medium and Large Scale Units;
** Large Corporates procuring raw materials from MSMEs.

Please contact us at rfsv@sidbi.in with cc to thakurp@sidbi.in for your needs