Question

Which of the following is a primary method of indirect financing used by SIDBI?

• A. Direct equity investment in MSMEs by SIDBI
• B. Issuing bonds directly to the public for fundraising
• C. Providing working capital loans directly to MSMEs
• D. Refinancing loans extended by Commercial Banks/SFCS to MSMEs,

Answer 1

Answer:

D. Refinancing loans extended by Commercial Banks/SFCS to MSMEs,

• Indirect financing is SIDBI's main mode of operation, where it refinances the primary lending institutions (banks, State Financial Corporations - SFCs, etc.) that directly deal with the MSMEs.