Institutions SupportingEntrepreneurs for mba students vtu

1. PriyankasahuPriyankasahu
UNIT-3
Institutions Supporting
Entrepreneurs
Presented By:
Priyanka sahu
Vishwesweraya Technological
University(CPGS)
Kalburgi.

2. Priyankasahu
Contents
● Small industry financing in developing countries:
An Overview
● A brief overview of financial institutions in India
● Central level and state level institutions
● SIDBI,NABARD
● IDBI,SIDCO
● Indian Institute of Entrepreneurship, DIC
● Single Window
● Latest Industrial Policy of Government of India

3. Priyankasahu
Small Industry Financing In
Developing Countries
● Small industry is a term usually used for companies operating on
relatively smaller establishments.
● The definition of small scale industries differs from country to
country, but usually it is based on the index of investment in plant
and machinery.
● In India, if the investment in plant and machinery is upto 1 crore
then it is called as small scale industry.
● Small Industries:
◦ Provide employment opportunities to many
◦ Help in balanced regional development
◦ Help in development of entrepreneurship
◦ Help in developing local resources and
◦ Help in decentralization of the industry
◦ Lead to equitable distribution of income and wealth.

4. Priyankasahu
Small Industry Financing In
Developing Countries
● Finance is a major constraint for SSIs
● These entrepreneurs face the problems of insufficient ownership
capital to start up and run a business enterprise.
● Lack of availability of finance affects the growth and development of
small-scale industries.
● In a developing country like India, SSI plays a vital role and hence
holds a prominent place in National Planning.
● In conformity with the plans, SSI‟s have been given the privilege of
priority sectors of the economy and have received active
encouragement from government, banks and financial institutions.

5. Priyankasahu
A Brief Overview Of Financial
Institutions In India
• Commercial Banks
The Scheduled Commercial Banks(SCBs) in the country
comprise
◦ The state bank of India and its associated banks
◦ Nationalized banks
◦ Private sector banks
◦ Regional rural banks and
◦ Foreign banks.

6. Priyankasahu
A Brief Overview Of Financial
Institutions In India

7. Priyankasahu
Other Financial Institutions
● Industrial Development Bank of India (IDBI)
● State Industrial Development Corporations
(SIDCO)
● Small Industries Development Bank of India
(SIDBI)
●National Bank For Agriculture And Rural
Development (NABARD)

8. Priyankasahu
Institutions Supporting Small-scale
Industries
CENTRAL LEVEL
• SSI BOARD
• KVIC
• SIDO
• NSIC
• NSTEDB
• NPC
• NISIET
• NIESBUD
• IIE
• EDI
STATE LEVEL
• DIs
• DICs
• SFCs
• SIDCs/SIICs
• SSIDCs
OTHERS
• Industry Association
• Non Governmental Organizations
• R & D Laboratories
SSIs

9. Priyankasahu
Central Level Institutions
● Small-scale Industries Board (SSI Board)
● Khadi & Village Industries Commission (KVIC)
● Small Industries Development Organization (SIDO)
● National Small Industries Corporation Ltd. (NSIC)
● National Science & Technology Entrepreneurship
Development Board (NSTEDB)
● National Productivity Council (NPC)
● National Institute For Small Industry Extension And
Training (NISIET)
● National Institute For Entrepreneurship And Small
Business Development ( NIESBUD)
● Indian Institute Of Entrepreneurship (IIE)
● Entrepreneurship Development Institute of India (EDII)

10. Priyankasahu
State Level Institutions
● Directorate of Industries (DIs)
● District Industries Centres ( DICs)
● State Financial Corporations (SFCs)
● State Industrial
● Development/Investment Corporation
(SIDCs/SIICs)
● State Small Industrial Development
Corporations ( SSIDCs)

11. Priyankasahu
District Industries Centres (DICs)
In order to extend promotion of small-scale and cottage industries
beyond big cities and state capitals to district headquarters, DIC
program was initiated in May,1978, as a centrally sponsored
scheme. DIC was established with the aim of generating greater
employment opportunities especially in rural and backward areas in
the country. At present DICs operate under respective Sate
budgetary provisions. DICs extend services of the following nature –
● economic investigation of local resources
● supply of machinery and equipment
● provision of raw materials
● arrangement of credit facilities
● marketing
● quality inputs
● consultancy

12. Priyankasahu
National Bank for Agriculture and
Rural Development (NABARD)
Set up in 1982, provides refinance
assistance to State Cooperative Banks, Regional
Rural Banks, and other approved institutions for
all kinds of production and investment credit to
SSIs, artisans, cottage and village industries,
handicrafts and other allied activities. Helps SSI
entrepreneurs to get loan for setting up SSIs in
any part of the country

13. Priyankasahu
National Bank for Agriculture and
Rural Development (NABARD)
● National Bank for Agriculture and Rural Development (NABARD)
came into Existence
on 12th July 1982 by an act of Parliament.
● Its objective is providing focused and undivided attention to the
development of rural India.
● NABARD mission statement underscores “to promote sustainable &
equitable agricultural & rural prosperity through effective support,
related services, institution development and other innovative
initiatives.
● NABARD at present has 28 regional offices at the state capitals, a
sub-office at Port Blair and 376 district development offices. NABARD is
an apex institution accredited with all matters concerning policy,
planning and operations in the field of credit for
agriculture and other economic activities in rural areas.

14. Priyankasahu
Functions of NABARD
• Credit Support
• Self Help Group
• Rural Infrastructure Development Fund
• Watershed Development
• Rural Entrepreneurship Development Programme
• Attracting youth to rural non-farm sector
• Marketing
• Rural Innovation Fund

15. Priyankasahu
Small Industries Development Bank of
India (SIDBI)
• SIDBI was established on 2nd April, 1990 under
an Act of Indian Parliament as the Principal
financial institution for :
I. Promotion
II. Financing
III. Development of Industries in the small scale
sector
IV. Co-coordinating the functions of other institutions
engaged in similar activities.

16. Priyankasahu
Functions SIDBI
● Indirect assistance to Primary Lending Institutions (PLI‟s):
◦ SIDBI‟s schemes of indirect assistance envisage credit to SSI s through a large
network of 913 PLI‟s spread across the country, with a branch network of over
65000.
◦ The assistance is provided by way of refinance, bills rediscounting, and resource
support in the form of short term loans / Line of Credit (LoC) in lieu of refinance
etc.
● Direct assistance to small units:
◦ Scheme for specialized marketing agencies- Cost of project betweenRs.25 Lakh and
Rs.300 lakhs, with a Debt-Equity Ratio of 2:1 Down payment of 70- 80% of value of
goods purchased
● Schemes for Ancillary/ Sub-contracting units-
◦ Cost of project is need based and
◦ proposals for assistance are to be recommended by the Mother unit.
● Schemes for Development of Industrial Areas for SSI Sector.
◦ Eligible borrowers are SIDCs/SSIDCs and cost of project not exceeding Rs.300 lakhs

17. Priyankasahu
Functions SIDBI
● Development and support services:
Over the years, the initiatives of SIDBI under
promotional and developmental activities have crystallized
in the following important areas-
◦ Enterprise promotion with emphasis on rural
industrialization
◦ Human Resource Development to suit the SSI sector
needs
◦ Technology up gradation
◦ Quality of environment management
◦ Marketing promotion
◦ Information dissemination

18. Priyankasahu
Industrial Development Bank of
India(IDBI)
Industrial Development Bank of India (IDBI) was established in 1964
by an Act to provide credit and other financial facilities for the
development of the fledgling Indian industry. Initially it operated as
a subsidiary of Reserve Bank of India RBI transferred it to GOI .
Many institutes of national importance finds their roots in IDBI like
Sidbi, Exim bank, NSE and NSDL. The war cry for reforms in financial
space saw GOI reducing its stake in the bank in the year 2019. At
present, Life Insurance Corporation of India holds 51% stake in IDBI
Bank. For the first quarter of the current financial year 2017-18, the
bank reported a net loss of Rs.853 crore compared to a profit of
Rs.241 crore during the corresponding period last financial year. In
the fourth quarter of financial year 2016-17, the bank had reported
a loss of Rs.3,200 crore. While the reported loss was lower than the
preceding quarter, bad loans continued to surge. In the quarter
ending September 2017 the bank bounced back with a loss of
Rs.198 crore compared to a loss of over Rs.2,000 crore in the
previous quarter. The bank is expected to return to profit in the
upcoming financial year.

19. Priyankasahu
Functions of IDBI
● To grant loans and advances to IFCI, SFCs or any other financial
institution by way of refinancing of loans granted by such
institutions which are repayable within 25 year.
● To grant loans and advances to scheduled banks or state
cooperative banks by way of refinancing of loans granted by such
institutions which are repayable in 15 years.
● To grant loans and advances to IFCI, SFCs, other institutions,
scheduled banks, state co- operative banks by way of refinancing of
loans granted by such institution to industrial concerns for exports.
● To discount or re-discount bills of industrial concerns.
● To underwrite or to subscribe to shares or debentures of industrial
concerns.
● To subscribe to or purchase stock, shares, bonds and debentures of
other financial institutions.
● To grant line of credit or loans and advances to other financial
institutions such as IFCI, SFCs, etc.

20. Priyankasahu
State Small Industries Development
Corporations (SIDCO)
● The State Small Industries Development Corporations (
SIDCO)ere set up in various States under the
Companies Act,1956 as State GovernmentUndertakings
to cater to the primary developmental needs of the
small, tiny and village industries in the State/Union
Territories under their jurisdiction.
● Incorporation under the companies Act has provided
SIDCOs with greater operational flexibility and wider
scope for undertaking a variety of activities for the
benefit of the small sector.

21. Priyankasahu
Functions of SIDCO’S
• To produce and distribute scarce raw materials
• To supply machinery on hire purchase system
• To provide marketing assistance to SSIs
• To construct Industrial estates/sheds
• To provide allied infrastructure facilities and their
maintenance
• To extend seed capital assistance on behalf of
the state governments concerned
• To provide management assistance to production
units

22. Priyankasahu
Indian Institute of Entrepreneurship
( IIE)
● Indian Institute of Entrepreneurship (IIE) is an autonomous organization under the
Ministry of Skill Development & Entrepreneurship.
● The main aim of the Institute is to provide training, research and consultancy
activities to Small and Micro Enterprises (SME),with special focus on
entrepreneurship development.
● The Indian Institute of Entrepreneurship (IIE) registered under the Societies
Registration Act,1860 was established in the year 1993 in Guwahati by the
erstwhile Ministry of Industry (now the Ministry of Micro, Small and Medium
Enterprises), Government of India.
● The Institute began operating from April 1994 with the North East Council(NEC),
Governments of Assam, Arunachal Pradesh and Nagaland and SIDBIas its other
stakeholders.
● IIE has been transferred to the Ministry of Skill Development &Entrepreneurship on
22nd May’2015.
● The headquarter of IIE is at Lalmati, Basistha Chariali, 37 NH bypass,Guwahat

23. Priyankasahu
Objectives of Indian Institute of
Entrepreneurship ( IIE)
● To promote and develop entrepreneurship.
● To conduct research and provide consultancy for
entrepreneurship development.
● To coordinate and collaborate with other organizations in
undertaking training, research and other activities to
increase
outreach of the institute.
● To provide consultancy and monitoring service to
MSMEs/potential entrepreneurs and enhancing
employability of participants.
● To promote greater use of information technology in the
activities/ functions of the IIE.
● To comply with statutory responsibility.

24. Priyankasahu
Single Window
● A single window is a system where all facilities are available in
one place.
For example, in banking there are various dealings like
withdrawing cash from a savings account, current account,
purchase of drafts or pay orders, making fixed deposits, etc.
● Earlier, for each type of transaction, a customer had to
approach different staff at different counters.
● Today, all the facilities can be availed of at one counter or
window. Hence, it's called a single window facility.
● It is a single point contact to reduce the time and efforts
involved in various clearances and approvals of
layouts/applications for the proposed investment, submitted
by investors

25. Priyankasahu
New Small Enterprise Policy (1991)
• The Govt. of India for the first time tabled a
new small enterprise policy titled „Policy
Measures for Promoting and Strengthening
and Supplementing Small, Tiny and Village
Enterprises‟ in the Parliament on 6th August,
1991.