institutions supporting entrepreneurs

7/28/2019 institutions supporting entrepreneurs

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INSTITUTIONS SUPPORTINGENTREPRENEURSModule IV


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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.These entrepreneur face the problems of

insufficient ownership capital to start up and run a

business enterprise.


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In a developing country like India, SSI plays a vital role

and hence holds a prominent place in the five year

plans. In conformity with the plans, SSIs have been given the

privilege of priority sectors of the economy & have

received active encouragement from government,

banks and financial institutions.


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FINANCIAL INSTITUTIONSIN INDIA

Financial Institutions in India are divided in twocategories. The first type refers to the regulatory

institutions and the second type refers to the

intermediaries.


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1. The regulators are assigned with the job of governing all

the divisions of the Indian financial system. These

regulatory institutions are responsible for maintaining

the transparency and the national interest in the

operations of the institutions under their supervision.

The regulatory bodies of the financial institutions in Indiaare as follows:

Reserve Bank of India (RBI)

Securities and Exchange Board of India (SEBI)

Central Board of Direct Taxes (CBDT)

Central Board of Excise & Customs


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2. The Regulatory bodies, there are the Intermediaries

that include the banking and non-banking financial

institutions. Some of the specialized financialinstitutions in India are as follows:

Unit Trust of India (UTI)

Securities Trading Corporation of India Ltd. (STCI)

Industrial Development Bank of India (IDBI)

Industrial Reconstruction Bank of India (IRBI), now

(Industrial Investment Bank of India)

Export - Import Bank of India (EXIM Bank)Small Industries Development Bank of India (SIDBI)


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National Bank for Agriculture and Rural Development

(NABARD)Life Insurance Corporation of India (LIC)

General Insurance Corporation of India (GIC)

Shipping Credit and Investment Company of India

Ltd. (SCICI)

Housing and Urban Development Corporation Ltd.

(HUDCO)

National Housing Bank (NHB)


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CENTRALANDSTATELEVEL

INSTITUTIONS


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INDUSTRIALDEVELOPMENTBANKOF INDIA (IDBI)

RBI categorized IDBI as an "other public sector bank". It was

established in 1964 by an Act of Parliament to provide credit and

other facilities for the development of the fledgling Indian industry

Objectives

The main objectives of IDBI is to serve as the apex institution for term

finance for industry in India. Its objectives include

(1) Co-ordination, regulation and supervision of the working of

other financial institutions such as IFCI , ICICI, UTI, LIC,

Commercial Banks and SFCs.

(2) Supplementing the resources of other financial institutions and

thereby widening the scope of their assistance.(3) Planning, promotion and development of key industries and

diversifications of industrial growth.

(4) Devising and enforcing a system of industrial growth that conforms

to national priorities.


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Functions

The IDBI has been established to perform the following

functions-

(1) 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.(2) To grant loans and advances to scheduled banks or

state co-operative banks by way of refinancing of loans

granted by such institutions which are repayable in 15

years.


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(3) 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.

(4) To discount or rediscount bills of industrial concerns.

(5) To underwrite or to subscribe to shares or debentures of

industrial concerns.


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(6) To subscribe to or purchase stock, shares, bonds and

debentures of other financial institutions.

(7) To grant line of credit or loans and advances to other

financial institutions such as IFCI, SFCs, etc.

(8) To grant loans to any industrial concern.

(9) To guarantee deferred payment due from any industrialconcern.

(10) To guarantee loans raised by industrial concerns in the

market or from institutions.


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INDIANINSTITUTEOFENTREPRENEURSHIP IIE

With an aim to undertake training, research and

consultancy activities in the small industry sector

focusing on entrepreneurship development, the

Indian institute of entrepreneurship (IIE) wasestablished in the year 1993 at Guwahati by the

erstwhile ministry of Industry (now ministry of

small scale industry) government of India as an

autonomous national institute.


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The objectives of IIE are:

1. To organise and conduct training for entrepreneurship

development.

2. To evolve strategies and methodologies for different target

groups and locations and conduct field tests.

3. To identify training needs and offer training programmes to

government and non government organisations engaged in

promoting and supporting entrepreneurship.

4. To identify, design and conduct training programmes for

existing entrepreneurs.

5. To prepare and publish literature related to

entrepreneurship and industrial development.

6. To conduct research for generating knowledge to accelerate

the process of entrepreneurship development.


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NT


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ME


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DISTRICTINDUSTRIESCENTERS (DICS)

Main ActivityTo develop and promote Cottage and Small Scale

Industries in the district. The Small Scale Industries (SSI)

means the Industries with investment upto Rs 1 (one)

crore in plant & machinery


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FINANCIAL ASSISTANCE SCHEMES (DEPARTMENTAL)1) Prime Minister Rozgar Yojona (PMRY)

It is a self-employment scheme for educated unemployed youth with

eligibility...a) Class VIII passedb) Age 18 to 35 years (relaxable upto 45 years for SC / ST /Women / Physically handicapped / Ex-Servicemen)c) Project upto Rs 2.00 lakh for Industries/Service and Rs 1.00 lakhfor Business

d) Annual family income Rs 40,000/- (Max)

2) Normal Bank Finance SchemeIf is one of the major schemes for setting up SSI unit. TheProjects/Schemes for the purpose should have sufficient equityparticipation.

3) Loan Under BSAI ActThis assistance is mainly for Handicrafts Sector. Limit of loan uptoRs 10,000/-. The rate of interest is 8% with a rebate of 2.5% onregular re-payment.


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FACILITIES AND OTHER SERVICES1. S.S.I. Registration

a) Provisional/Temporary Registration : Before starting the SSI

Unit, this registration is issuedb) Permanent/Final Registration : After commencement of

production of SSI Unit, this registration is issued

2. Preference for power connectionPriority is given for WBSEB electric power connection to

registered SSI Unit

3. Project/Scheme VettingProject Scheme of SSI unit is vetted for technical feasibility

4. Marketing Assistance to Handicraft ProductsGiven through participation in WB Handicrafts Expo'

5. Special Assistance renderedFor setting up Haldia Petrochemicals Downstream Units.


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6. National Project of Bio-Gas Development (NPBD)Construction of Bio-gas plant (family size 1-cum to 10-cum).

Main usage are...

a) Domestic cooking and lightingb) Production of organic manure (enriched with NPK) for

better yield in agricultural, horticultural & piscicultural sectors

c) Helps to maintain ecological balance. Provision of Govt.

subsidy to all categories of beneficiaries

7. Pollution Clearance for SSI UnitsPollution Clearance Certificate (consent for starting all

categories, viz. Green, Orange, Red of SSI units) is issued on

behalf of WBPCB west Bengal pollution control board and

also the consent to operate for Green category only

8. Training ProgrammeSome training programmes on different trades as mentioned

below are organised from time to time for prospective

entrepreneurs and handicraft artisans

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institutions supporting entrepreneurs