Download VTU (Visvesvaraya Technological University) MBA 2nd Semester (Second Semester) 17MBA26-Entrepreneurial Development module 3 Financial Institutions Important Lecture Notes (MBA Study Material Notes)
SUPPORTING
ENTREPRENEURS
MODULE 3
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INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
Various support and services offered by NSIC:
? Managing globalization
? A few focused sectors
? Up gradation of these identified sectors in terms of:
Product design
Application of new technologies
Quality control
Packaging
Marketing
Links to global markets
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
Various support and services offered by NSIC:
? Managing globalization
? A few focused sectors
? Up gradation of these identified sectors in terms of:
Product design
Application of new technologies
Quality control
Packaging
Marketing
Links to global markets
Common programs with the stakeholders in the
identified sectors. The components of these programs
are:
? Identification of new markets
1. Buyer seller meets
2. Quality assurance and rating
3. Offering integrated support through:
4. Technology up gradation
5. Marketing support
6. Financial support
7. International partnership
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
Various support and services offered by NSIC:
? Managing globalization
? A few focused sectors
? Up gradation of these identified sectors in terms of:
Product design
Application of new technologies
Quality control
Packaging
Marketing
Links to global markets
Common programs with the stakeholders in the
identified sectors. The components of these programs
are:
? Identification of new markets
1. Buyer seller meets
2. Quality assurance and rating
3. Offering integrated support through:
4. Technology up gradation
5. Marketing support
6. Financial support
7. International partnership
? Focus on specific sectors:
? Agro and food processing
? Auto components
? Bio technology
? Glass and ceramics dimensional stones
? Information technology communication
? Knit wear and garments
? Leather and leather products
? Light engineering
? Low cost building material
? Pharmaceutical and chemicals
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
Various support and services offered by NSIC:
? Managing globalization
? A few focused sectors
? Up gradation of these identified sectors in terms of:
Product design
Application of new technologies
Quality control
Packaging
Marketing
Links to global markets
Common programs with the stakeholders in the
identified sectors. The components of these programs
are:
? Identification of new markets
1. Buyer seller meets
2. Quality assurance and rating
3. Offering integrated support through:
4. Technology up gradation
5. Marketing support
6. Financial support
7. International partnership
? Focus on specific sectors:
? Agro and food processing
? Auto components
? Bio technology
? Glass and ceramics dimensional stones
? Information technology communication
? Knit wear and garments
? Leather and leather products
? Light engineering
? Low cost building material
? Pharmaceutical and chemicals
DISTRICT INDUSTRIES CENTRES (DICs)
?Govt of Karnataka established DIC in 1913 under
the old Mysore princely state to develop
industrialization.
?The organisational structure of DICs consists of 1
General Manager, 4 Functional Managers & 3
Project Managers to provide technical service in
the area relevant to needs of district concerned.
?Management of the DIC?s is done by the State
Govts.
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
Various support and services offered by NSIC:
? Managing globalization
? A few focused sectors
? Up gradation of these identified sectors in terms of:
Product design
Application of new technologies
Quality control
Packaging
Marketing
Links to global markets
Common programs with the stakeholders in the
identified sectors. The components of these programs
are:
? Identification of new markets
1. Buyer seller meets
2. Quality assurance and rating
3. Offering integrated support through:
4. Technology up gradation
5. Marketing support
6. Financial support
7. International partnership
? Focus on specific sectors:
? Agro and food processing
? Auto components
? Bio technology
? Glass and ceramics dimensional stones
? Information technology communication
? Knit wear and garments
? Leather and leather products
? Light engineering
? Low cost building material
? Pharmaceutical and chemicals
DISTRICT INDUSTRIES CENTRES (DICs)
?Govt of Karnataka established DIC in 1913 under
the old Mysore princely state to develop
industrialization.
?The organisational structure of DICs consists of 1
General Manager, 4 Functional Managers & 3
Project Managers to provide technical service in
the area relevant to needs of district concerned.
?Management of the DIC?s is done by the State
Govts.
o To conduct industrial potential service keeping in view the availability of
resources in terms of material & human skill, infrastructure, demand for
product, etc. to prepare techno-economic surveys & identify product lines
& then to provide investment advice to Entrepreneurs.
o To prepare an action plan to effectively implement the schemes identified.
o To guide entrepreneurs in matters in relating to selecting the most
appropriate machinery and equipment, sources of its supply and
procedure for procuring imported machinery, if needed, assessing
requirements for raw materials, etc.
o To appraise the worthiness of the various proposals received from
entrepreneurs.
o To assist the entrepreneurs in marketing their products and assess the
possibilities of ancillarisation & export promotion of their products.
o To undertake product development work appropriate to small industries.
o To conduct artisan training programmes.
o To function as the technical arms of DRDA in administering IRD and TRYSEM
programs.
Functions of DIC:
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
Various support and services offered by NSIC:
? Managing globalization
? A few focused sectors
? Up gradation of these identified sectors in terms of:
Product design
Application of new technologies
Quality control
Packaging
Marketing
Links to global markets
Common programs with the stakeholders in the
identified sectors. The components of these programs
are:
? Identification of new markets
1. Buyer seller meets
2. Quality assurance and rating
3. Offering integrated support through:
4. Technology up gradation
5. Marketing support
6. Financial support
7. International partnership
? Focus on specific sectors:
? Agro and food processing
? Auto components
? Bio technology
? Glass and ceramics dimensional stones
? Information technology communication
? Knit wear and garments
? Leather and leather products
? Light engineering
? Low cost building material
? Pharmaceutical and chemicals
DISTRICT INDUSTRIES CENTRES (DICs)
?Govt of Karnataka established DIC in 1913 under
the old Mysore princely state to develop
industrialization.
?The organisational structure of DICs consists of 1
General Manager, 4 Functional Managers & 3
Project Managers to provide technical service in
the area relevant to needs of district concerned.
?Management of the DIC?s is done by the State
Govts.
o To conduct industrial potential service keeping in view the availability of
resources in terms of material & human skill, infrastructure, demand for
product, etc. to prepare techno-economic surveys & identify product lines
& then to provide investment advice to Entrepreneurs.
o To prepare an action plan to effectively implement the schemes identified.
o To guide entrepreneurs in matters in relating to selecting the most
appropriate machinery and equipment, sources of its supply and
procedure for procuring imported machinery, if needed, assessing
requirements for raw materials, etc.
o To appraise the worthiness of the various proposals received from
entrepreneurs.
o To assist the entrepreneurs in marketing their products and assess the
possibilities of ancillarisation & export promotion of their products.
o To undertake product development work appropriate to small industries.
o To conduct artisan training programmes.
o To function as the technical arms of DRDA in administering IRD and TRYSEM
programs.
Functions of DIC:
Single Window
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
Various support and services offered by NSIC:
? Managing globalization
? A few focused sectors
? Up gradation of these identified sectors in terms of:
Product design
Application of new technologies
Quality control
Packaging
Marketing
Links to global markets
Common programs with the stakeholders in the
identified sectors. The components of these programs
are:
? Identification of new markets
1. Buyer seller meets
2. Quality assurance and rating
3. Offering integrated support through:
4. Technology up gradation
5. Marketing support
6. Financial support
7. International partnership
? Focus on specific sectors:
? Agro and food processing
? Auto components
? Bio technology
? Glass and ceramics dimensional stones
? Information technology communication
? Knit wear and garments
? Leather and leather products
? Light engineering
? Low cost building material
? Pharmaceutical and chemicals
DISTRICT INDUSTRIES CENTRES (DICs)
?Govt of Karnataka established DIC in 1913 under
the old Mysore princely state to develop
industrialization.
?The organisational structure of DICs consists of 1
General Manager, 4 Functional Managers & 3
Project Managers to provide technical service in
the area relevant to needs of district concerned.
?Management of the DIC?s is done by the State
Govts.
o To conduct industrial potential service keeping in view the availability of
resources in terms of material & human skill, infrastructure, demand for
product, etc. to prepare techno-economic surveys & identify product lines
& then to provide investment advice to Entrepreneurs.
o To prepare an action plan to effectively implement the schemes identified.
o To guide entrepreneurs in matters in relating to selecting the most
appropriate machinery and equipment, sources of its supply and
procedure for procuring imported machinery, if needed, assessing
requirements for raw materials, etc.
o To appraise the worthiness of the various proposals received from
entrepreneurs.
o To assist the entrepreneurs in marketing their products and assess the
possibilities of ancillarisation & export promotion of their products.
o To undertake product development work appropriate to small industries.
o To conduct artisan training programmes.
o To function as the technical arms of DRDA in administering IRD and TRYSEM
programs.
Functions of DIC:
Single Window New Industrial Policy, 1991
? July 24, 1991 P V Narasimha Rao introduced NIP, 1991.
? Main objectives were:
? - Liberalisation of industry
? - Introduce globalization
? - Enhance privatization
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
Various support and services offered by NSIC:
? Managing globalization
? A few focused sectors
? Up gradation of these identified sectors in terms of:
Product design
Application of new technologies
Quality control
Packaging
Marketing
Links to global markets
Common programs with the stakeholders in the
identified sectors. The components of these programs
are:
? Identification of new markets
1. Buyer seller meets
2. Quality assurance and rating
3. Offering integrated support through:
4. Technology up gradation
5. Marketing support
6. Financial support
7. International partnership
? Focus on specific sectors:
? Agro and food processing
? Auto components
? Bio technology
? Glass and ceramics dimensional stones
? Information technology communication
? Knit wear and garments
? Leather and leather products
? Light engineering
? Low cost building material
? Pharmaceutical and chemicals
DISTRICT INDUSTRIES CENTRES (DICs)
?Govt of Karnataka established DIC in 1913 under
the old Mysore princely state to develop
industrialization.
?The organisational structure of DICs consists of 1
General Manager, 4 Functional Managers & 3
Project Managers to provide technical service in
the area relevant to needs of district concerned.
?Management of the DIC?s is done by the State
Govts.
o To conduct industrial potential service keeping in view the availability of
resources in terms of material & human skill, infrastructure, demand for
product, etc. to prepare techno-economic surveys & identify product lines
& then to provide investment advice to Entrepreneurs.
o To prepare an action plan to effectively implement the schemes identified.
o To guide entrepreneurs in matters in relating to selecting the most
appropriate machinery and equipment, sources of its supply and
procedure for procuring imported machinery, if needed, assessing
requirements for raw materials, etc.
o To appraise the worthiness of the various proposals received from
entrepreneurs.
o To assist the entrepreneurs in marketing their products and assess the
possibilities of ancillarisation & export promotion of their products.
o To undertake product development work appropriate to small industries.
o To conduct artisan training programmes.
o To function as the technical arms of DRDA in administering IRD and TRYSEM
programs.
Functions of DIC:
Single Window New Industrial Policy, 1991
? July 24, 1991 P V Narasimha Rao introduced NIP, 1991.
? Main objectives were:
? - Liberalisation of industry
? - Introduce globalization
? - Enhance privatization
Salient features of NIP
? Abolition of industrial licensing
? Diminishing role of public sector
? Incentives and concession for foreign investment and technology
? Drastic amendments to MRTP
? Removal of compulsory convertibility clause
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
Various support and services offered by NSIC:
? Managing globalization
? A few focused sectors
? Up gradation of these identified sectors in terms of:
Product design
Application of new technologies
Quality control
Packaging
Marketing
Links to global markets
Common programs with the stakeholders in the
identified sectors. The components of these programs
are:
? Identification of new markets
1. Buyer seller meets
2. Quality assurance and rating
3. Offering integrated support through:
4. Technology up gradation
5. Marketing support
6. Financial support
7. International partnership
? Focus on specific sectors:
? Agro and food processing
? Auto components
? Bio technology
? Glass and ceramics dimensional stones
? Information technology communication
? Knit wear and garments
? Leather and leather products
? Light engineering
? Low cost building material
? Pharmaceutical and chemicals
DISTRICT INDUSTRIES CENTRES (DICs)
?Govt of Karnataka established DIC in 1913 under
the old Mysore princely state to develop
industrialization.
?The organisational structure of DICs consists of 1
General Manager, 4 Functional Managers & 3
Project Managers to provide technical service in
the area relevant to needs of district concerned.
?Management of the DIC?s is done by the State
Govts.
o To conduct industrial potential service keeping in view the availability of
resources in terms of material & human skill, infrastructure, demand for
product, etc. to prepare techno-economic surveys & identify product lines
& then to provide investment advice to Entrepreneurs.
o To prepare an action plan to effectively implement the schemes identified.
o To guide entrepreneurs in matters in relating to selecting the most
appropriate machinery and equipment, sources of its supply and
procedure for procuring imported machinery, if needed, assessing
requirements for raw materials, etc.
o To appraise the worthiness of the various proposals received from
entrepreneurs.
o To assist the entrepreneurs in marketing their products and assess the
possibilities of ancillarisation & export promotion of their products.
o To undertake product development work appropriate to small industries.
o To conduct artisan training programmes.
o To function as the technical arms of DRDA in administering IRD and TRYSEM
programs.
Functions of DIC:
Single Window New Industrial Policy, 1991
? July 24, 1991 P V Narasimha Rao introduced NIP, 1991.
? Main objectives were:
? - Liberalisation of industry
? - Introduce globalization
? - Enhance privatization
Salient features of NIP
? Abolition of industrial licensing
? Diminishing role of public sector
? Incentives and concession for foreign investment and technology
? Drastic amendments to MRTP
? Removal of compulsory convertibility clause
Implications of NIP
? Growth of new economy companies
? Economy bailed out
? New breed of entrepreneurs
? FDI and new technologies
? Greater competitive strength
? Healthy competition
? Sustained economic growth
FirstRanker.com - FirstRanker's Choice
INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
Various support and services offered by NSIC:
? Managing globalization
? A few focused sectors
? Up gradation of these identified sectors in terms of:
Product design
Application of new technologies
Quality control
Packaging
Marketing
Links to global markets
Common programs with the stakeholders in the
identified sectors. The components of these programs
are:
? Identification of new markets
1. Buyer seller meets
2. Quality assurance and rating
3. Offering integrated support through:
4. Technology up gradation
5. Marketing support
6. Financial support
7. International partnership
? Focus on specific sectors:
? Agro and food processing
? Auto components
? Bio technology
? Glass and ceramics dimensional stones
? Information technology communication
? Knit wear and garments
? Leather and leather products
? Light engineering
? Low cost building material
? Pharmaceutical and chemicals
DISTRICT INDUSTRIES CENTRES (DICs)
?Govt of Karnataka established DIC in 1913 under
the old Mysore princely state to develop
industrialization.
?The organisational structure of DICs consists of 1
General Manager, 4 Functional Managers & 3
Project Managers to provide technical service in
the area relevant to needs of district concerned.
?Management of the DIC?s is done by the State
Govts.
o To conduct industrial potential service keeping in view the availability of
resources in terms of material & human skill, infrastructure, demand for
product, etc. to prepare techno-economic surveys & identify product lines
& then to provide investment advice to Entrepreneurs.
o To prepare an action plan to effectively implement the schemes identified.
o To guide entrepreneurs in matters in relating to selecting the most
appropriate machinery and equipment, sources of its supply and
procedure for procuring imported machinery, if needed, assessing
requirements for raw materials, etc.
o To appraise the worthiness of the various proposals received from
entrepreneurs.
o To assist the entrepreneurs in marketing their products and assess the
possibilities of ancillarisation & export promotion of their products.
o To undertake product development work appropriate to small industries.
o To conduct artisan training programmes.
o To function as the technical arms of DRDA in administering IRD and TRYSEM
programs.
Functions of DIC:
Single Window New Industrial Policy, 1991
? July 24, 1991 P V Narasimha Rao introduced NIP, 1991.
? Main objectives were:
? - Liberalisation of industry
? - Introduce globalization
? - Enhance privatization
Salient features of NIP
? Abolition of industrial licensing
? Diminishing role of public sector
? Incentives and concession for foreign investment and technology
? Drastic amendments to MRTP
? Removal of compulsory convertibility clause
Implications of NIP
? Growth of new economy companies
? Economy bailed out
? New breed of entrepreneurs
? FDI and new technologies
? Greater competitive strength
? Healthy competition
? Sustained economic growth
Limitations of NIP
? Industrial policy resolution 1956 was terminated
? Indian industries faced threat from multinationals
? Scope for frauds/scams due to less regulations
? MNCs could rule the market with their technology and
money power
? May lead to social and economic inequalities
? MNCs could exploit small scale industries for their
advantage.
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INSTITUTIONS
SUPPORTING
ENTREPRENEURS
MODULE 3
Small industries Financing in
developing countries.
Small scale industries are usually run by an
entrepreneur alone or a small group of
entrepreneurs and hence availability of
finance is a matter of concern for them.
Thus they usually adapt the given below
measures to overcome the problem of
insufficiency of funds.
v Rent a building
v Purchase of second hand
machinery
v Keep inventory level low
v Seek cash sales
v Hire a machinery
v Substitute equipment by labour
Need of small industry financing
?Cash flow challenges
?Capital investments
?Lengthy product development
cycles
Sources of finance
?Amount of funds depends upon nature of
business.
?Manufacture requires more funds than trading.
?Period of funds depends upon application as
well. Capital investments need money over a
longer period as compared to working capital.
Sources and period of finance
Type of finance Period of finance purpose
Short term Less than a year RM, wages, rent,
insurance
Medium term 0ne to five years Modernisation,
renovation,
advertisement, etc
Long term More than five
years
Land, building,
machinery, etc
Short term sources ?
Short term needs for day-to-day functioning of the
business is obtained from
?Indigenous Banks
?Installment credit
?Advances
?Accrued expenses and deferred income
?Accounts payable/creditors
?Trade credit
?Bills discounting
?Factoring
?Commercial banks
Medium term sources
?Special financial institutions
?Commercial banks
?Public deposits
?Investment companies
?Hire purchase
?Lease financing
?Internal sources
?Loans from government
Long term sources
?Equity shares
?Preference shares
?Debentures
?Retained earnings
?Loans from fin institutions
?Commercial banks
?Venture capital
?Institutional financing
Watch this video?.
? https://www.youtube.com/watch?v=vhDBg833iTI
Institutions supporting Entrepreneurs
CENTRAL LEVEL
? - SISI
? - SIDO
? - NABARD
? - IIE
STATE LEVEL
? - DIC
? - TCO
? - SFS
? - KVIC
FINANCIAL INSTITUTIONS
? Commercial banks
? SIDBI
? IDBI
? SIDCO
? ICICI
NABARD
? A Development bank providing and regulating credit and
other facilities for agriculture, SSIs, cottage and village
industries, handicrafts and other activities related to integrated
rural development.
? Functions of NABARD:
? Refinancing IRDP projects
? Refinancing projects for development of women and children
in rural areas
? Provides grants to agencies engaged in training and
production centre for women
? Establishes linkages between SHGs and credit agencies
? Refinances projects under National watershed development
program and National mission of watershed development
? Monitores and does evaluation of programs
implemented by various banks
? Vikas volunteer vahini program ? organises farmers
club in tribal areas which is involved in educating
tribals on asset utilisation, technology etc.
? External aid projects ?formulation and
implementation of external aided projects like world
bank, OPEC etc. including monitoring and reporting
? Inspection and supervision of co-op banks and RRBs
? HRD ? provides training to staff of credit institutions at
its centres like BIRD and RTC
? Support to develop PACs as MSCs
? Project on core banking solutions in co-operatives
Small Industries Development Org (SIDO)
?SIDO is a sub-ordinate office of the dept. of SSI
& ARI.
?It is an apex body and nodal agency for
formulating, coordinating and monitoring the
policies & programs for promotion &
development of SSI.
?Development commissioner is the head of the
SIDO.
Main functions of SIDO
?Co-ordination
?Industrial development
?Extension
qThe SIDO functions through 27 Offices, 31
Small Industries Service Institutes (SISI), 37
Extension Centres, 3 Product-cum-
Process Development Centres, and 4
Production Cenrtres.
SMALL SCALE INDUSTRIES BOARD (SSIB)
?It is also known as Central Small Industries
Board.
?It is an apex advisory body constituted to
render advice to the Govt on all issues
pertaining to development of small-scale
industries.
?The SSIB comprises of 50 members including
State Industry Ministry, some members of
Parliament, Secretaries of various Depts of
Govt of India, financial institutions, public
sector undertakings, industry associations
and eminent experts in the field.
Functions of SISIs:
? Economic Consultancy/Information/EDP Consultancy.
? Trade & market information.
? Project profiles.
? State industrial potential survey.
? District industrial potential surveys.
? Modernisation and in-plant studies.
? Workshop facilities.
? Training in various trade/activities.
The National Institute For Entrepreneurship
and Small Business Development.
?NIESBUD was established in 1983 by the Ministry
of Industry ,Government of India.
?The activities of the institute include:
?1.Evolving effective training strategies and
methodology
?2.Standardizing model for training various target
groups
?3.Formulating scientific selection procedure
?4.Developing training aids manuals and tools
?5.Facilitating and supporting edp for state and
central unit.
Activities of NIESBUD:
? Assisting/supporting EDPs
? Training for trainers/promoters
- Evolving standardized material and research publication
- Creation and capacity building of EDP Institutions
- Small business focus
- National /international forum for exchange of ideas
- Developing entrepreneurial culture
- National entrepreneurship development board
- Services to affiliate members
- Sustaining entrepreneurship.
- Schemes for medical profession
- schemes for tourism related activities
- Schemes for hotel and restaurant projects
? Schemes for infrastructure development
? Equity type assistance schemes
? Scheme for women entrepreneur
? Special scheme for assistance to Ex-Servicemen
? Scheme for specialized marketing agencies
? Schemes for ancillary sub-contracting units
? Schemes for development of industrial areas for SSI Sector.
INDIAN INSTITUTE OF ENTREPRENEURSHIP
(IIE)
? Set up by the ministry of industry in Gawhati in 1993 to promote training, research
and consultancy in SME sector
? Objectives:
to promote and develop entrepreneurs
to conduct research and provide consultancy for entrepreneurship development
to coordinate and collaborate with other institutions in research training and
consultamcy
to promote consultancy and monitoring service to mSMEs
to promote greater use of IT in activities of IIE
to comply with statutory requirements
Functions of IIE
? Designing and organising training activities for
different target groups and undertaking research
relevant to entrepreneurship
? Improving efficiency, effectiveness and delivery of
change agents and development practitioners
? Provide consultancy service to prospective and
existing entrepreneurs
? Increasing the outreach of the institute through
collaboration and effectiveness through use of IT
Financial institutions
Small Industries Development Bank of
India(SIDBI)
SIDBI was established in April 2 1990 as a wholly owned
subsidiary of IDBI for:
? Promotion, Financing, Development of industries in the small
scale sector.
? Co- coordinating the functions of other institutions engaged
in similar activities.
? Aims at empowering MSME in economic growth,
employment generation and balanced regional
development.
Objectives of SIDBI
Main purpose was to ensure support to SSIs. In
terms of
?Initiating steps for technological
upgradation and modernisation of existing
units
?Expanding channels for marketing of SSI
products
?Promotion of employment in semi-urban
areas to check migration to urban areas,
Functions of SIDBI
Provides assistance to SSI through existing banking and other financial
institutions like state fin corps, state industrial development corps,
commercial banks, co-operatives, RRBs.
Functions:
Refinances loans given by existing fin institutions to SSIs
Discounts and rediscounts bills arising out of sale and purchase of
machinery by SSIs
Extends seed capital/soft loan assitence under National Equity fund,
Mahila Udyam Nidhi, Mahila Vikas Nidhi and seed capital schemes.
Direct assistance and refinances loans to SSIs for exports
Provides leasing, factoring services to SSI units
Extends financial support to sate small industries corporation for
providing scarce RM and marketing of products of SSIs
Extends financial support to National small industries corporation for
providing leasing, hire purchase and marketing help to SSIs
SIDBI schemes . . .
Scheme of Refinance Assistance
1. Schemes for setting up SSI units
2.composite loan scheme
3.scheme for SC/ST and physically handicapped persons
4.schemes for acquisition of:
? In house quality control facilities
? Diesel generating sets and pollution control equipment
? computers
? For import substitution
? For manufacturing and installation of renewable
energy
5.Equipment refinance scheme
6.Scheme for small road transport operation
7.Schmee for professionals
8.Scheme for Marketing activities
Small Industries Development
Corporations (SIDCO)
? State owned companies in different states of
India for the promotion of small scale industries
like
? Kerala small industries development corporation
ltd
? Small industries development corporation of
Jammu and Kashmir
? Tamilnadu small industries development
corporation limited (TANSIDCO)
Industrial development bank of India
Objectives Of IDBI was to promote the growth of industries in the backward regions
India, established in July 1964.
FUNCTIONS OF IDBI:
Direct financial assistance to industrial concerns in the form of giving loans or
subscribing/underwriting stocks bonds and debentures
Indirect financial assistance to SMEs through other fin institutions like State Fin corps,
state ind dev corps, coop banks RRBs, commercial banks. Tis is done in the form of
refinance, buying shares/bonds or rediscounting of bills.
Development assistance in the form of development assistance fund. Open to
industries who have high investment or low expected returns. Source of fund is mainly
govt and assistance requires approval of govt
Promotional function like market research, techno-economic survey. Gives technical
and administrative advice for better management.
Industrial Finance corporation of India (IFCI)
? IFCI was the first developmental finance corporation set up in India in 1948.
FUNCTIONS:
? In order to provide long term credit to medium and large industries.
? Provides loans in rupee and foreign currencies
? subscribes to stocks, debentures, underwrites them
? Provides loans only to public limited companies/cooperatives and not private ltd and partnerships
? Merchant banking, syndication of loansrehabilitation programs, M&As etc
ACTIVITIES:
? Self-loan assistance- soft loans to small and medium enterprises to develop technology through in-
house R&D
? Entrepreneur development- provides financial support to Entrepreneurial Development Programs
conducted by other agencies
? Industrial development in backward areas by concessional finance
? Subsidised consultancy for promoting ancillary industries, doing MR, reviving sick units, pollution
control etc
? Management development ? sponsored management development institute in 1973. established
development banking centre to develop managerial manpower in development banks,
commercial banks and industrial concerns.
National small industries corporations
Ltd
NSIC,an ISO 9001:2000 certified company, since its
establishment in 1995 has been working to fulfill its
mission of promoting ,aiding and fostering the
growth of small scale industries and industry related
small scale services business enterprises in the
country.
Various support and services offered by NSIC:
? Managing globalization
? A few focused sectors
? Up gradation of these identified sectors in terms of:
Product design
Application of new technologies
Quality control
Packaging
Marketing
Links to global markets
Common programs with the stakeholders in the
identified sectors. The components of these programs
are:
? Identification of new markets
1. Buyer seller meets
2. Quality assurance and rating
3. Offering integrated support through:
4. Technology up gradation
5. Marketing support
6. Financial support
7. International partnership
? Focus on specific sectors:
? Agro and food processing
? Auto components
? Bio technology
? Glass and ceramics dimensional stones
? Information technology communication
? Knit wear and garments
? Leather and leather products
? Light engineering
? Low cost building material
? Pharmaceutical and chemicals
DISTRICT INDUSTRIES CENTRES (DICs)
?Govt of Karnataka established DIC in 1913 under
the old Mysore princely state to develop
industrialization.
?The organisational structure of DICs consists of 1
General Manager, 4 Functional Managers & 3
Project Managers to provide technical service in
the area relevant to needs of district concerned.
?Management of the DIC?s is done by the State
Govts.
o To conduct industrial potential service keeping in view the availability of
resources in terms of material & human skill, infrastructure, demand for
product, etc. to prepare techno-economic surveys & identify product lines
& then to provide investment advice to Entrepreneurs.
o To prepare an action plan to effectively implement the schemes identified.
o To guide entrepreneurs in matters in relating to selecting the most
appropriate machinery and equipment, sources of its supply and
procedure for procuring imported machinery, if needed, assessing
requirements for raw materials, etc.
o To appraise the worthiness of the various proposals received from
entrepreneurs.
o To assist the entrepreneurs in marketing their products and assess the
possibilities of ancillarisation & export promotion of their products.
o To undertake product development work appropriate to small industries.
o To conduct artisan training programmes.
o To function as the technical arms of DRDA in administering IRD and TRYSEM
programs.
Functions of DIC:
Single Window New Industrial Policy, 1991
? July 24, 1991 P V Narasimha Rao introduced NIP, 1991.
? Main objectives were:
? - Liberalisation of industry
? - Introduce globalization
? - Enhance privatization
Salient features of NIP
? Abolition of industrial licensing
? Diminishing role of public sector
? Incentives and concession for foreign investment and technology
? Drastic amendments to MRTP
? Removal of compulsory convertibility clause
Implications of NIP
? Growth of new economy companies
? Economy bailed out
? New breed of entrepreneurs
? FDI and new technologies
? Greater competitive strength
? Healthy competition
? Sustained economic growth
Limitations of NIP
? Industrial policy resolution 1956 was terminated
? Indian industries faced threat from multinationals
? Scope for frauds/scams due to less regulations
? MNCs could rule the market with their technology and
money power
? May lead to social and economic inequalities
? MNCs could exploit small scale industries for their
advantage.
?THANK YOU
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This post was last modified on 18 February 2020