Context: Recently, Small Industries Development Bank of India (SIDBI) launched the second window of Swavalamban Challenge Fund (SCF).

Swavalamban Challenge Fund

• SIDBI in partnership with Foreign, Commonwealth & Development Office, UK launched ‘Swavalamban Challenge Fund’ (SCF) to help the entrepreneurs.
• Aim: To provide financial support to non-profit organizations, educational institutions, or social startups for addressing developmental gaps.
• Themes of the challenge: Women empowerment, financial literacy and inclusion, responsible business, sustainable livelihood, focus on green initiatives including climate change mitigation, adaptation measures, and offering solutions to reduce carbon footprint.

Categories

• Pilot Category: Applicants can apply with their proposal to pilot their innovative ideas
• Scale-up Category: Ongoing or completed projects done by the applicants for scaling-up will be nominated.

Outlay: The total outlay of fund will depend on number of proposals selected in various themes

• Pilot category: Up to Rs 20 lakh
• Scale-up Category: Up to Rs 35 lakh for the

Eligibility

• Project period shall be more than six months and up to two years.

What is a Challenge Fund?

• A challenge fund is a fund support mechanism to allocate funds for specific purposes using competition among organisations.
• If there is an idea which needs to be scaled up, but funds are an issue, challenge fund provides a platform to present the idea in prescribed theme, implement and validate it.
• The same can be scaled up by leveraging another donor or financier support.

About SIDBI

• The SIDBI was established under the Act of the Parliament 1988.
• Headquarters: Lucknow, UP.
• Aim: To promote, develop and finance MSME (Micro, Small and Medium Enterprise) sector.

Objectives

• Focus on cleaner production and energy efficiency.
• It helps MSMEs in acquiring the funds required to grow, and commercialize their technologies and innovative products.
• The bank provides several schemes, financial services for meeting the individual’s requirement of various businesses.

Functions

• It discounts and rediscounts bills.
• It helps in expanding marketing channels for the products of SSI (Small Scale Industries) sector in domestic and international markets.
• It offers services like factoring, leasing etc. to the industrial concerns in the small-scale sector.
• Promotes employment-oriented industries in semi-urban areas for creating employment opportunities.
• Initiate steps for modernization and technological up-gradation of current units.
• It enables the timely flow of credit for working capital as well as term loans to Small Scale Industries in cooperation with commercial banks