SIDBI and Green MSMEs The global emphasis on Green andclean environment encompassesMSMEs also. In India also Greengrowth is an adopted agenda. Therehas been increasing concern onenvironmental degradation causedby industrialisation and realisation ofthe need to take corrective measuresto protect the environment. Apartfrom revisiting manufacturingprocesses and technologies beingused by MSMEs, the focus has

shifted to adopting appropriate /alternate technologies / productionprocesses to maximise energyconservation. Now Reduce (waste),Reuse and Recycle are emerging as

thrust areas of various activities. Lack of information about

availability of alternative cleantechnologies, lack of awareness ofadvantages of investing in suchtechnologies and low skill sets ofexisting workforce to adapt to newtechnologies are major reasons forMSMEs lagging behind inupgradation and modernisation oftheir facilities. The sector has to beprovided technological supportservices along with credit facility on

softer terms to invest in CleanerProduction (CP) options.

As a principal & responsibleDevelopment Financial Institutionengaged in promotion, financing &

development of Indian MSMEs,SIDBI has since inception actedproactively in the area of sustainabledevelopment of MSME sector.Whether it involved cluster levelintervention for furtheringmodernisation / qualityimprovisations or evolvingtechnology mission for MSMEs withvision 2010 or institutionalisingtechnology needs through atechnology bank or acting as a keynodal agency for governmentschemes aimed at developing nichein certain sectors throughtechnology upgradation, SIDBI hasalways been in forefront.

A) Financing for EnergyEfficiency SIDBI has taken several initiatives topromote lending for green andenergy efficient technologies inMSME sector. SIDBI has beenoperating focused lending schemesfor promoting investment in cleanproduction and energy efficienttechnologies / production processunder bilateral Lines of credit fromKfW, Germany and JICA, Japan.These focused schemes have twopronged approach, i.e. concessionallending to encourage investment ingreen or energy efficienttechnologies and launching ofcluster specific informationdissemination .

Green Financing - SIDBI has so farprovided assistance under the JICAscheme to more than 2000 MSMEswith aggregate assistance of morethan Rs.800 crore for cleanerproduction and energy savinginvestments. Some of the majorinitiatives of SIDBI for achievingenergy efficiency which hasbenefited a large number of MSMEsin clusters, are as under - O Electronic Waste recyclingfacility in Bangalore - SIDBIassisted E- Parisara Pvt. Ltd.,Bangalore for electronic waste recy-cling project. The project caters towastes generated by IT, Telecom &Electronic industries in and aroundBangalore. The advantages accruingfrom the project includes helpingmore than 100 MSMEs to becomecompliant with regulatory require-ments / environment audit, reduc-tion in waste treatment cost andreuse & recycling of treated metals /materials. O Common Effluent TreatmentPlant (CETP)a. MSME textile dyeing & printingunits in and around Surat - GujaratEnviron Protection & InfrastructureLtd. has been assisted to set upTreatment Storage and DisposalFacilities (TSDF) in Surat to helpMSME textile dyeing and printingunits in proper waste disposal.Majority of 300 MSME member

Small IndustriesDevelopment Bank ofIndia (SIDBI),set up on

April 2,1990 under an Act ofIndian Parliament,functions asthe Principal FinancialInstitution for the Promotion,Financing and Development ofthe Micro,Small and MediumEnterprise (MSME) sector andCo-ordination of the functionsof the institutions engaged insimilar activities.Financialsupport is provided by way of(a) refinance to eligible PrimaryLending Institutions (PLIs) suchas Banks,State FinancialCorporations (SFCs),State

Industrial DevelopmentCorporations (SIDCs),MicroFinance Institutions (MFIs) etc.for onward lending to MSMEsand (b) direct assistance toMSMEs which is channelisedthrough the Bank's network of103 branch offices reaching outto more than 600 MSMEclusters.As a step towardsfinancial inclusion,the microcredit programme of SIDBIoffers both financial and non -financial services and isdesigned with the objective ofreaching financial services tothe disadvantaged section ofthe society.SIDBI's micro credit

assistance through the MFIroute has benefited more than200 lakh persons in the ruralareas,mostly women.

The credit operations ofSIDBI are supplemented withPromotional & Developmental(P&D) activities,which aredesigned to support enterprisecreation in the MSME sectorand strengthening of theexisting MSMEs to meet thechallenges of increasingcompetition andinternationalisation.SIDBI hasalso been constantly workingon building variousinstitutional mechanisms to

cater to the emerging needs ofthe MSME sector and has set-up various subsidiaries /associates which include SIDBIVenture Capital Ltd.(SVCL) forventure capital,CreditGuarantee Fund Trust for Microand Small Enterprises(CGTMSE) for collateral freeloans,SME Rating Agency ofIndia Ltd.(SMERA) for creditrating,nIdia SME TechnologyServices Limited (ISTSL) fortechnology related servicesand India SME AssetReconstruction Company Ltd.(ISARC) for resolution of baddebts.

SIDBI and its Role in GreenFinancing & Development

units have been able to becomecompliant with pollution controlnorms. b. CETP, Bangalore- Eco GreenSolution Systems (P) Ltd. has beenassisted for setting up of a TreatmentStorage and Disposal Facilities(TSDF) facility for toxic wastegenerated from the electroplating,powder coating, metal finishingindustries in and around Bangalore.It has helped more than 300 MSMEs

in reuse and recycling of treatedeffluent, reduction in wastetreatment cost per unit etc. O Mumbai Taxi FinancingScheme - SIDBI has entered intoarrangements with MumbaiTaxmen's Association / Union andMaruti Suzuki Ltd. for providingassistance to taxi drivers (microentrepreneurs) to phase out theirold taxis. Under the Scheme, taxidrivers have been provided assis-tance to buy new taxis without anycollateral security under CGTMSEcoverage. More than 700 Microentrepreneurs have so far been pro-vided finance under this arrange-ment. The initiative has helped inpromoting clean technology thuscontrolling pollution.O Auto Rickshaw Financing - 600

CNG fitted Auto Rickshaws wereprovided assistance in Chandigarhby Delhi Finance Corporation (DFC).SIDBI provided refinance to DFC forthis clean energy initiative. O Solar Lanterns - Friends ofWomen's World Banking (FWWB), aMFI was sanctioned assistance ofRs.10 crore for providing assistanceto micro entrepreneurs for acquiringSolar Lanterns of 2 watts each. 50,000 micro entrepreneurs are pro-

posed to be covered under the assis-tance.O Rickshaw Sangh Programme -SIDBI and American IndiaFoundation (AIF) have recentlysigned a MoU to provide livelihoodsupport to the low-income groupsthrough a joint initiative called the"Rickshaw Sangh Programme",under which SIDBI has sanctionedfinancial assistance of Rs. 50 lakh toBhartiya Micro Credit (BMC) underits Micro Credit Scheme for microfi-nance as well as for financing liveli-hood of programmes of BMC. Underthe programme, BMC has provided500 rickshaws to poor people resid-ing in and around Lucknow withcredit support from the SIDBI andTechnical support from AIF. Underthe programme, the beneficiaries

would also be provided license andMunicipal permit, uniform, lifeinsurance for client and his spouse,accident insurance etc. O Information dissemination -SIDBI has organised several aware-ness campaigns for propagatingJICA supported scheme for achiev-ing Energy Efficiency in high energyintensive MSME clusters to createawareness about environmentfriendly and energy efficient tech-nologies suitable for the respectiveclusters. The campaigns havereceived good response. In suchseminars, MSMEs were given infor-mation on green technologies, betterproduction processes, investmentrequired and cost benefit analysis ofeach investment. So far 18 aware-ness campaigns have been organisedin MSME clusters across the coun-try.

B) Furthering Green Growthwith Developmental SupportUnder multi - activity-multi agencyMSME Financing and DevelopmentProject ( MSMEFDP) beingimplemented by SIDBI, variousinitiatives are being undertaken toenable the emergence of competitiveMSMEs with provision of financialand non - financial services.

Credit facility (CF) has beenchannelized to over 2050 MSMEsspread across major cluster centresacross the country. Project hasadopted international best practiceof Environment and Social RiskAssessment framework (E&S) in itsappraisal process . More than 100credit officials have been trained onE&S.

In its cluster developmentinitiative aimed at soft infrastructuredevelopment, the Project hasadopted a long term interventionstrategy. Starting with value chainmapping of a cluster, an action planis devised, in consultation withstakeholders and is pursued withsustainability angle. Instilling EnergyEfficiency (EE) in these adoptedclusters has emerged as one of thecross cutting issues. The followingmajor initiatives have been attendedin EE area under MSMEFDP:- O Energy efficiency initiativewith Bureau of EnergyEfficiency - SIDBI has entered intoa Memorandum of Understanding(MoU) with the Bureau for EnergyEfficiency (BEE) for creation of ashelf of energy efficient technologiesfor 25 MSME clusters, awarenesscreation and capacity building oflocal Business Development Services(BDS) providers for implementingenergy efficient technologies. Thisshall be integrated with financialsupport to eligible proposals for

adopting energy efficient technolo-gies & measures.O Knowledge Series - In order toattend to challenges of informationasymmetry, the Project has broughtout knowledge series publicationson energy efficiency in Fruit &Vegetable Processing, Ceramics,Foundry and Engineering clusters.These along with a 'Tip sheet onEnergy efficiency' (providing simplehousekeeping) tips to MSMEs hasbeen been widely disseminatedamong MSMEs.

The project has supported IndiaSME Technology Services Ltd(promoted by SIDBI and leadingpublic sector banks) to prepareCarbon Credit Guidebook forMSMEs, update its existing basket of800 technologies and flag them ascarbon free, clean, energy efficienttechnologies.

Project has initiated steps, inassociation with DSIR, Ministry ofScience and Technology, to evolvepolicy document on ' TechnologyVision for Indian MSMEs- 2020'. Itis expected to be a tool, providingboost to innovative traits of IndianMSMEs. O Green Ratings - With supportunder MSMEFDP, SME RatingAgency (SMERA)- an associate ofSIDBI, is gradually introducing rat-ing variants and the latest is " GreenRating" model. This initiative isaimed to encourage MSMEsengaged in industrial activity toadopt better technologies andprocesses to prevent un-mitigatedenvironmental damage. It will actas a risk mitigation tool for MSMEsto effectively face business continu-ity risks associated with rapidlychanging regulatory prescriptions onenvironment governance & compli-ances.

ConclusionThe Green agenda includeschallenges in strengthening MSMEsmanagerial capability, creation ofawareness on economic values oftechnologies and benchmarkingquality up to global standards.Towards this goal, SIDBI has beenengaging with several internationalpartners and has been proactive inassimilating international bestpractices in green financing.Considering SIDBI's apex role inpromotion, financing anddevelopment of MSME sector, theBank would continue to play anactive role of a change agent andengage in activities aligned togovernment's national priorities andMillennium Development Goalswith overall emphasis on three Ps ofPeople, Planet and Profit.