SIDBI, India’s development finance institution for MSMEs, reported a standalone net profit of ₹4,811 crore in FY25 on a ₹4.96 lakh crore loan book, maintaining zero net NPAs. The institution’s low-risk refinancing model and stable operations, despite pressure from rising borrowing costs, helped maintain profitability.
The Small Industries Development Bank of India (SIDBI), headquartered in Lucknow, Uttar Pradesh, and India’s premier development financial institution for Micro, Small and Medium Enterprises (MSMEs), has reported a standalone net profit of ₹4,811 crore for the financial year 2024–25 (FY25). This marks a nearly 20% increase from the previous year, driven by its low-risk, indirect lending model.
SIDBI, which primarily operates as a refinancing institution, supports banks, NBFCs (Non-Banking Financial Companies), and MFIs (Microfinance Institutions), which in turn lend to MSMEs across India. As per its latest financials, 91% of its ₹4.96 lakh crore loan book is made up of such indirect lending, resulting in remarkably clean asset quality.
Its gross non-performing assets (GNPA) stood at ₹183 crore or 0.04%, and net NPAs were zero, a rare achievement in the banking sector, especially in the MSME space, which traditionally carries higher credit risks.
On a consolidated basis, including subsidiaries like SIDBI Venture Capital, SIDBI Trustee, and MUDRA, net profit reached ₹5,596 crore. MUDRA, in particular, is a government-backed institution that refinances loans to micro-enterprises across India.
Despite pressure from rising borrowing costs—its cost of funds increased to 5.73% in FY25 from 5.43% a year ago—SIDBI’s low operational expenses (₹1,430 crore) and efficient loan recovery systems helped it maintain profitability. It posted a Return on Assets (ROA) of 0.89%, with a net interest margin (NIM) of 1.3%.
Its capital adequacy ratio (CAR) remained strong at 19.62%, supported by a net worth of ₹33,999 crore as of March 31, 2025. The central government has proposed a further capital infusion of ₹5,000 crore to strengthen its lending capabilities.
SIDBI’s loan exposure is largely concentrated among top-rated banks and NBFCs, including public sector entities such as the State Bank of India (SBI) and LIC. As of March 2025, its top 10 borrowers accounted for 57% of the total loan book, though credit risk remains low due to the borrowers’ strong profiles.
The institution is gradually increasing direct MSME lending, now forming 8% of its portfolio. This includes working capital, term loans, and bill discounting aimed at underbanked businesses.
SIDBI also operates national digital platforms such as Udyamimitra and GST Sahay, enabling faster and easier access to credit for small entrepreneurs.
With its strategic role in executing key government schemes like CGTMSE, SMILE, and TReDS, SIDBI continues to serve as a nodal financial institution in India’s MSME ecosystem.
