INLC & Guarantee Scheme

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What is the scheme?

SIDBI helps MSMEs by offering Letter of Credit & Bank Guarantees, thereby covering the entire gamut of financing requirement by an MSME. The Letter of Credit is offered in the form of Inland Letter of Credit.

How Inland Letter of Credit offered by SIDBI functions and benets MSME?
SIDBI provides assistance to MSMEs through Inland Letter of Credit for the
purchase of capital equipment which forms a part of the project cost, against which SIDBI has sanctioned assistance and purchase of raw materials, against the Working Capital assistance sanctioned by SIDBI. The LC is sanctioned to the unit as a sub-limit, i.e. the total fund-based and non-fund based exposure at any point of time shall not exceed the aggregate financial assistance sanctioned to the customer and is need-based.

How Guarantee schemes offered by SIDBI functions and benets MSME?
Guarantee schemes cater to the industrial concerns & service sector units of Micro & Small Enterprises Sector (MSEs) and provide both, financial and Performance Guarantees as well as Deferred Payment Guarantee. The guarantee is issued for the normal trade/business of MSME’s as well as for meeting the ad-hoc/onetime requirement of the borrower. The guarantee would not be available as a standalone facility, i.e. guarantee would not be considered on behalf of customers who have not / are not willing to avail debt assistance from SIDBI.