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.
- 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
- Limits are sanctioned to:
- Well-performing Large Corporates / Purchaser Companies with sound financials for covering their purchases of components / sub-assemblies / parts / accessories and services obtained from MSMEs
- MSME sellers for early realization of dues from large Corporates by discounting the bills
- 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.
- 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.
- 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.
- 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.
- On the due date, the Purchaser makes payment to SIDBI through RTGS.
- 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.
How to Apply?
Please contact us at rfsv[at]sidbi[dot]in with cc to thakurp[at]sidbi[dot]in for your needs