INSTITUTIONS

SUPPORTING
ENTREPRENEURS
 Institutions supporting
entrepreneurs
 The term institutional support refers to the part of economic environment of industry
and business. It consisting of authorities and institutions whose decisions and active
support in form of laws, regulation, financial and non-financial help brings a lot of
changes in the functioning of any business.

 The institutions could be government owned, statutory, semi autonomous or

autonomous. It is the government or government supported institutions authorized
to take up certain activities - financing, marketing, project preparation, training the
to promote industrial activities in the state

There are three stages of promotion - inception stage, operational stage and
expansion or diversification stage.
Small industry financing developing
countries:

 Small industry is a term usually used for

companies operating on relatively smaller
establishments. In India, if the investment in
plant and machinery is up to 1 crore then it is
called as small scale industry.

 They not only help in providing employment

opportunities to many, but also help in balanced
regional development.
 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, SSI’s have been given the privilege of
priority sectors of the economy and have received active
encouragement from government, banks and financial institution

 They help in development of entrepreneurship, utilization of local

resources and in decentralization of the industry and hence lead
to equitable distribution of income and health.
 Since 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.

They usually adapt the following measures to overcome the problem of

insufficiency of funds:
(a) Rent a building
(b) Purchase of second hand machineries
(c) Keep inventory level low
(d) Seek cash sales
(e) Hire machinery
Substitute equipments by labour Though all the above mentioned
methods reduce the requirement of capital but they further create problems
in their own unique way respectively.
 A brief overview of financial institutions in India

An entrepreneur requires a continuous flow of funds not only for setting

up of his/her business, but also for successful operation as well as regular
up gradation/modernisation of the industrial unit.

To meet this requirement , the government (both central and state level )has
been undertaking several steps like setting up of banks and financial
institution; formulating various policies and scheme etc.

Three dimensions of institutional support system are:

 Central Government
 State Government
 Non-government Support System
Central Level Institutions

A.)Small-Scale Industries Board (SSI Board)

b) Khadi & Village Industries Commission (KVIC)
c) Small Industries Development Organization (SIDO)
d) National Small Industries Corporation Ltd. (NSIC)
e) National Science & Technology Entrepreneurship Development
Board (NSTEDB)
f) National Productivity Council (NPC)
g) National Institute for Small Industry Extension and Training
(NISIET)
h) National Institute for Entrepreneurship and Small Business
Development ( NIESBUD)
i) Indian Institute of Entrepreneurship (IIE)
j) Entrepreneurship Development Institute of India (EDII)
 SMALL SCALE INDUSTRIES
BOARD
Established in 1954 to provide effective coordination and
inter-institutional linkages for the benefit of small scale sector.
The Small Scale Industries Board (SSI Board) is the apex
advisory body constituted to render advise to the Government on
all issues pertaining to the small scale sector. The Board is
reconstituted every two years and is headed by the Minister In
charge of Small Scale Industries in the Government of India.

The Board broadly operates in the following areas:

 Policies and programs
 Development of industries in a specific region
 Ancillary development, quality improvement
 and marketing assistance
 Credit facilities, taxation and modernization
 Industrial Sickness
 Khadi and Village
Industries Commission
(KVIC)
 The KVIC is a statutory body created by an act of
parliament (No. 61 1956 and as amended by Act No.
12 of 1987).

 KVIC is entrusted with the task of providing financial

assistance to institutions or persons engaged in the
development and operation of khadi and village
industries and guide them through supply of designs,
prototypes, and other technical information.
 It is charged with planning, promotion, organization, and
implementation of the programme for the development of
khadi and other village industries engaged in rural
development wherever necessary, KVIC’s functions also
comprise building up a reserve of raw materials and
implements for supply to producers, creation of common
service facilities for marketing of KVIC products apart from
organization of training of artisans engaged in these industries
and encouragement of cooperative efforts amongst them.
 SMALL INDUSTRIES
DEVELOPMENT ORGANISATION
(SIDO)
SIDO was established in 1954 on the recommendations of Ford
Foundation. Over the years, it has seen its role evolve into an
agency for advocacy, handholding and
facilitation for the small industries sector
Main objectives of SIDO are:
 To formulate policy for promotion of SSI
 Provide coordination of policies of state government
 To collect and disseminate information
 To provide wide range of extension services through allied institutions
 To promote facilities for technology up gradation
 To offer consultancy services
Services Rendered by SIDO:

 Entrepreneurship development and Management

training.
 Efforts for skill development.
 Preparation of feasibility reports for different
products.
 Provision of testing services.
 Availability of tool room facilities.
 NATIONAL SMALL INDUSTRIES
CORPORATION (NSIC)

 It was established in 1955 to promote and develop

micro and smalls scale industries and enterprises in
the country . With the objective of promoting and
developing SSIs.
Main functions are:
 Supply of machinery and equipment.

 Provision of financial assistance.

 Assistance for arrangement of raw materials.

 Establishment of technology transfer centers.

 Arrangement of marketing assistance.

 Indian Institute of
Entrepreneurship ( 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 was established in the year 1993 at
Guwahati by the Ministry of Small Scale Industry, Govt. of India as an
autonomous national Institute. The Institute stated its operations from April
1994 with North East Council (NEC), Govts. of Assam, Arunachal Pradesh
and Nagaland and SIDBI as other stakeholders.
Its objectives are IIE:

 To organize and conduct training for entrepreneurship development

 To evolve strategies and methodologies for different target groups and
locations and conduct field test.
 To identify training needs and offer training programmers to government
and non-government organizations engaged in promoting and supporting
entrepreneurship.
 To document and disseminate information needed for policy formulation
and implementation related to self-employment.
 To identify, design and conduct training programmes for existing
entrepreneurs.
 To prepare and publish literature related to entrepreneurship and industrial
development.
 Functions of IIE:

1.designing and organizing training for different target groups and

undertaking research relevant to entrepreneurship.

2.Improving the efficiency, effectives and delivery of the change agents and
development practitioners I.e. trainers, support organizations engaged in
enterprise building etc.

3.Provide consultancy service to the prospective and existing entrepreneurs.

4.Increasing the outreach of activities of the institute through collaborative

activities and increasing their effectiveness through use of different tools of
information technology.
Industrial investment bank of India
(IIBI)
 Set Up In 1985 Under The Industrial Reconstruction Bank of India Act
1984, as the principal credit and reconstruction agency for sick industrial
units. It was converted into IIBI on march 17 ,1997, as a full-fledged
development financial institution.

 It assists industry mainly in medium and large sector through wide

ranging product and services.

 IIBI also provides short duration non-project asset-backed financing in

form of underwriting/direct subscription, deferred payment guarantees and
working capital/other short –term loans to the companies.
 Functions of IIBI:

1. To provide financial assistance to sick industrial units.

2. To provide managerial and technical assistance to sick industrial units
3. To securer the and government agencies for the reveal and revitalization of
sick industrial units
4. To provide consultancy services to the banks in matter of sick units
5. To undertake leasing business
6. To provide merchant banking services for amalgamation ,merger ,
reconstruction.
 Entrepreneurship
Development Institute of
India (EDI
 The entrepreneurship Development
Institute of India, Ahmedabad,
 is an autonomous nonprofit institution, set
up in 1983, sponsored by financial
institutions, such as Industrial
Development Bank of India, Industrial
Finance Corporation of India, Industrial
Credit and Investment Corporation of India
and State Bank of India. The Government
of Gujarat has also provided assistance for
the setting up of EDI
 objectives of the EDII are as follows:

• Augment the supply of trained entrepreneurs through training.

• Generate a multiplier effect on opportunities for self-employment.
• Improve managerial capabilities of small-scale industries.
• Sensitize the support environment to facilitate potential as well as existing
Entrepreneurs to establish and manage their enterprises.
• Promote micro enterprise and manage their enterprises.
• Augment the supply of trainer motivators for entrepreneurship
development.
• Participate in institution building efforts.
State Level Institution
State Financial Corporation are the state level financial institutions which
plays a crucial role in the development of small and medium enterprises in
the concerned states. they provide financial assistance in the form of term
loans, direct subscription to equity/debentures , guarantees , discounting of
bills of exchange and seed /special capital ,etc.

 Objectives of state finance institution

 To develop the uniformity in the regional industries.
 To provide incentives to new industries
 To bring efficiency in regional industrial units.
 To provide finance to small ,medium and cottage industries in the state.
 To develop regional financial resources
 State financial corporation:

1.Andra Pradesh state financial corporation

2.Madhya Pradesh financial corporation
3.Himachal Pradesh corporation
4.North Eastern Development Finance
Corporation
5.Rajasthan finance corporation
6.Tamil naidu industrial investment corporation
limited
7.Delhi finance corporation
8. Jammu and Kashmir sate finance corporation
State level institutions
 Directorate of Industries:-
 District Industries Centers (DICs)
 State Financial Corporations
 State Industrial Development /Investment
Corporation
 State Small Industrial Development Corporations
Directorate of Industries:
• At the state level, the Commissioner/Director of Industries implements
policies for the promotion and development of small-scale, cottage, medium-
and large-scale industries.
• he Department of Industries and Commerce acts as a catalyst for the overall
development of the industrial sector through effective discharge of
developmental and facilitation roles
• With a view to promote investment and trade, the Department formulates and
implements the Policies of the State,
• The Department helps enhance the competitiveness of domestic industry
through modernization, technology up gradation and adoption of best
practices.
• It also provides a forum for entrepreneurs and industrialists through their
associations to represent their needs to the Government, which translates
into Policies of the State

• The Central policies for the SSI sector serve as guidelines but each state
evolves its own policy and package of incentives. The
commissioner/Director of Industries in all the States/UTs, oversee the
activities of field offices. That is, the District Industries Centers(DICs) at
the district t level.
DISTRICT INDUSTRIES
CENTERS (DIC)
 In order to extend the promotion of small-scale and cottage industries beyond
big cities and state capitals to the district headquarters, the DIC programme was
initiated in May 1978 as a centrally sponsored scheme with the objective of
developing small, tiny and cottage sector industries in the country.

 DIC‟s were also established with the aim of generating greater employment
opportunities especially in the rural and backward areas in the country. These
centers provide support facilities/concessions/centrally in widely dispersed rural
areas and other small towns. There were 430 centrally approved DIC‟s which
covered almost all the districts of the country (except the metropolitan cities) at the
time of the withdrawal of the central sponsorship in 1993-94

 At present, DIC‟s operate under respective State budgetary

provisions
The main functions of DIC are:
 To prepare and keep model project profiles for reference of the entrepreneurs
 To prepare action plan to implement the schemes effectively already identified
 To provide guidance for appropriate loan amount and documentation.
 To help the entrepreneurs in obtaining required licenses/permits/clearance
 To conduct product development work appropriate to small industry
 To conduct artisan training programme
 It is responsible for the implementation and monitoring of prime minister
employment generation programme.
 It helps in arranging buyer-seller meets.
 It also involved in conduction various entrepreneurship and vendor development
and awareness programmes at Hobli,Taluk and District levels.
State Financial
Corporations
 SFC‟s, established under the SFC‟s Act, 1951, play an important role in
the development of small and medium enterprises.

 The main objectives of SFC‟s are to finance and promote small and
medium enterprises in their respective states for achieving balanced
regional growth, catalyses investment, generate employment and widen
the ownership base of industry.

 At present, there are 18 SFC‟s of which one as set up under the SFCs Act,
while Tamil Nadu Industrial and Investment Corporation Ltd., was set up
under the Companies Act

 SFCs operate a number of schemes of refinance of IDBI and SIDBI and

also extend equity type assistance
state Industrial
Development
/Investment Corporation:
 SIDCs/SIICs, set up under the Companies Act, 1956, as wholly owned
undertakings of the state governments, act as catalysts for industrial
development in their respective states.

 SIDCs play an important role by developing land providing industrial

infrastructural facilities in the form of ready made factor sheds and or
developed plots together with facilities like road, power water supply,
drainage and other amenities.

 Set up primarily for providing assistance to medium and

large-scale industries. SIDCs/SIICs also extend assistance to
the small-scale sector by way of term loans, subscription to
equity and promotional services..
 SSIDCs established under the companies Act, 1956, as State government
undertaking, cater to the needs of the small, tiny and village industries in
their respective state/Union Territory. Being operationally flexible,SSIDCs
undertake a variety of activities of the benefits of the SSI sector.

 important activities undertaken by SSIDCs include:

1.Procurement and distribution of scarce raw materials.
2.Supply of machinery to SSI units on hire-purchase basis.
3. assistance for marketing of products.
4. extending seed capital assistance on behalf of State
government; and
5. providing management assistance to production units
Single Window
 The system facilitates delivery of all banking services at a single counter,
that is, all customer needs are attended to at a single point of delivery.
 A facility that allows parties involved in trade and transport to lodge
standardized information and documents with a single entry point to fulfill
all import, export, and transit-related regulatory requirements. If information
is electronic then individual data elements should only be submitted once.
 Single window is a system where all facilities are available at
one place .
Eg: banking there are various dealings like withdrawing cash
from a savings accounts, current account, purchase of draft
or pay orders, making fixed deposits etc.
Earlier for each transaction customers had to approach
different staff at different counters. today all the facilities can
be at one counter or window
 small industries
development bank of
India (SIDBI)
 The Small Industries Development Bank of India (SIDBI) was
established in April 2, 1990 as a wholly owned subsidiary of IDBI.
 it is the principal financial institution for promotion, financing and
development of small scale industries in the economy.

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.
Objectives of SIDBI:

 Initiating steps for technological up gradation and

modernization of existing sector .

 Expanding the channels for marketing the product

of small scale sector

 Promotion of employment-oriented industries,

especially in semi-urban arears to create more
employment opportunities and thereby checking
migration of population to urban areas.
 Function of SIDBI:
1.It refinances loans and advances provided by the existing leading institutions
to the small-scale units.

2.It provides service like factoring, leasing etc to small units

3.To grant direct assistance and refinance loans extended by primary lending
institutions for financing exports of products manufactured by small-scale
units.
4.It discount and rediscounting bills arising from sale of machinery to and
manufactured by small-scale industrial units.
5.To extends financial support to state small industries corporations for
providing scarce raw materials to and marketing the products of the small-
scale industries.
The aim of SIDBIs EDPs is to build & nurture a
reservoir of entrepreneurs .it is constantly endeavoring to
address the problems (management deficiency & low level
of skill &technology )by bringing the reputed management
& technical institutions close to small scale industries &
arrange specially designed programmes .
National Bank for Agriculture
and Rural Development
(NABARD)
 NABARD is an apex development bank in India having
headquarters based in Mumbai Maharashtra.NABARD
was established on the recommendations of
Shivaraman Committee, by an act of Parliament on 12
July 1982 to implement the National Bank for
Agriculture and Rural Development Act 1981.
 Role of NABARD

 Serves as an apex financing agency for the institutions providing investment

for promoting the various Developmental activities in rural areas.

 It regulates the institution which provides financial help to the rural economy.

 It provides training facilities to the institutions working the field of rural

upliftment.

 It regulates the cooperative banks and the RRB’s, and manages talent
acquisition

 NABARD also keeps a check on its client institutes.

 Providing refinance to lending institutions in rural areas.

 Evaluating, monitoring and inspecting the client banks .

 Acts as a coordinator in the operations of rural credit institutions. Extends

assistance to the government, the RBI and other organizations for rural
development.

 Helps the state governments in reaching their targets of providing assistance

agriculture and rural development.

 It promotes research in the fields of rural banking, agriculture and rural

development.

 Farm Innovation and Promotion Fund Rural Infrastructure Development Fund.

 It helps SSI Entrepreneurs to get loan for setting up small scale industries in any
part of country
 Functions of NABARD:

 Watershed Development: With the entire country facing the problems of water
scarcity, NABARD was engaged in perfecting its experiments in creating a
sustainable cost effective solution to the water harvesting techniques in rural India.

 Tribal Development & WADI Approach: With over 8% of the population

comprising tribals largely development on forests, livestock and agriculture,
NABARD found a holistic approach by addressing production, processing and
marketing of the produce with WADI as the core of the programme.

 District Rural Industries project (DRIP): The objective of DRIP is to create

sustainable employment opportunities in rural areas
 Rural Entrepreneurship Development Programme (REDP): REDP is a
promotional programme to motivate train educated unemployed rural youth to set
up their enterprises.

 Rural Innovation Fund: In association with Swiss Agency for Development and
Cooperation (SDC) NABARD has constituted the NABARD-SIDC Rural
Innovation Fund (RIF) to support innovative projects in farm, non-farm and micro-
finance sectors.

 Marketing: A number of marketing interventions have been made for marketing

of rural non-farm products since marketing is a key factor in the success of any
programme. With the support of NABARD under in various promotional
programmes like rural haats, rural marts, participation in fairs, exhibition etc.
Artisans and entrepreneurs get larger marker to showcase their talents and products
to urban markets

 Credit Support: At its business, NABARD provides credit support that suits
every activity in rural India.
Industrial Development Bank of India
(IDBI)
It is the principal financial institution for
providing credit and other facilities for developing
industries and assisting development institutions.
was established in the july 1964 as an
apex financial institution for industrial
development in the country
It caters to the diversified needs of medium and
large scale industries in the form of financial
assistence,both direct and indirect.
 Objectives of IDBI

I. Co-ordination, regulation and supervision of the working of

other financial institutions such as IFCI, ICICI, UTI, LIC,
Commercial Banks and SFCs.
II. Supplementing the resources of other financial institutions
and there by widening the scope of their assistance.
III. Planning, promotion and development of key industries
and diversification of industrial growth.
IV. Devising and enforcing a system of industrial growth that
conforms to national priorities.
 Functions of IDBI:
 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 loans to any industrial concern.

 To guarantee deferred payment due from any industrial concern.



 To guarantee loans raised by industrial concerns in the market or from

institutions.
 To provide consultancy and merchant banking services in or
outside India.

 Planning, promoting and developing industries to fill up gaps

in the industrial structure in India.

 To provide technical, legal, marketing and administrative

assistance to any industrial concern or person for promotion,
management or expansion of any industry.

 To act as trustee for the holders of debentures or other

securities.
State industrial development corporation
(SIDCO)
 The State Small Industries Development Corporations ( SIDCO) were set
up in various States under the Companies Act,1956 as State Government
Undertakings 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.
The important functions performed by the SIDCOs
include:
 To procure and distribute scarce raw materials

 To supply machinery on hire purchase system

 To Provide assistance for marketing of the products

of small-scale industries.
 To construct industrial estates/sheds, providing

allied infrastructure facilities and their

maintenance.
 To extend seed capital assistance on behalf of the

state government concerned. Provide management

assistance to production units.
Various Small Industries Development Corporations (SIDCO)

1.Kerala Small Industries Development corporation limited:

Kerala small industries development corporation ltd is a
state agency of Kerala, India, established for the promotion of
small scale industries in state of Kerala.

2.Small industries development corporation of Jammu and Kashmir:

Incorporated on Nov 28,1975 as a fully owned J&K
government undertaking under the Indian companies act 1956, it
was set up with authorized share capital of Rs.500 lac and paid up
capital of Rs 311.85 lac with objective to promote and develop
the small scale industries in the state of Jammu and Kashmir.

3.Tamilnadu small industries development corporation limited:

it establishes industrial parks through the state ,providing
the necessary infrastructure for small-scale industries, gives –
away government subsidies for the sector, and provides technical
assistance for the new industries.
Latest industrial policy of government
of india

 It covers rules, regulations, principles, policies, & procedures

laid down by government for regulating & controlling
industrial undertakings in the country.

 It prescribes the respective roles of the public, private, joint,

cooperative large, medium & small scale sectors for the
development of industries.

 It incorporates fiscal & monetary policies, tariff policy, labor

policy.

 It shows the government attitude not only towards external

assistance but also toward public & private sectors
 The Government has announced a new industrial policy for 2010-15,
enhancing the investment limit of mega projects from Rs.100 to
Rs.250crore for the purpose of offering benefits to them

 Maximize employment opportunities, Implement self-employment

schemes effectively, and provides jobs to local people in the upcoming
industrial units in the states.( Pradhan mantri employment generation
programme launched by the government of India.)

 Promote agro-based and food processing industry to make agriculture a

most profitable proposition.

 In order to ensure productive uses of land, multi-stored complexes for

micro and small enterprises/industries will be constructed either through
department’s corporations or through or private sector participation at
potential sites.

 Attract investments in the industry and service sector by developing

quality infrastructure.
 It covers rules, regulations, principles, policies, &
procedures laid down by government for regulating &
controlling industrial undertakings in the country

 t prescribes the respective roles of the public, private, joint,

cooperative large, medium & small scale sectors for the
developmentof industries.

 It incorporates fiscal & monetary policies, tariff policy, labor

policy.
 It shows the government attitude not only towards external
assistance but also toward public & private sectors.
Thank you