Which specialized financial institution acts as the apex agency for meeting the credit needs of micro, small, and medium enterprises (MSMEs) and coordinates the functions of other institutions engaged in similar activities?

💡 Solution & Explanation

Established in 1990 under the Small Industries Development Bank of India Act, SIDBI serves as the principal financial institution for promoting, financing, and developing the micro, small, and medium enterprises sector. Institutions like NABARD focus primarily on agriculture and rural development, while EXIM Bank deals with foreign trade and NHB focuses on housing finance, making them incorrect choices. SIDBI also coordinates the functions of other institutions engaged in similar activities within the MSME ecosystem.