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Role of Financial Institutions in Promoting

Entrepreneurship

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Role of Financial Institutions in Promoting

Entrepreneurship
In tr o d u c t io n

C h a r a c t e r is t ic s

Im p o rta n ce

Ty p e s o f E n t r e p r e n e u rs

F u n c t io n s

B e n e fi t s

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CHAPTER 1: INTRODUCTION OF ENTREPRENEURSHIP
1.1 INTRODUCTION:
Entrepreneurship is the process of designing, launching and running a new business, i.e.
a startup company offering a product, process or service. It has been defined as the "...capacity
and willingness to develop, organize and manage a business venture along with any of its risks in
order to make a profit." The entrepreneur is "a person who organizes and manages any
enterprise, especially a business, usually with considerable initiative and risk" Rather than
working as an employee, an entrepreneur runs a small business and assumes all the risk and
reward of a given business venture, idea, or good or service offered for sale. The entrepreneur is
commonly seen as a business leader and innovator of new ideas and business
processes." Entrepreneurs perceive new business opportunities and they often exhibit
positive biases in their perception (i.e., a bias towards finding new possibilities and unmet
market needs) and a pro-risk-taking attitude that makes them more likely to exploit the
opportunity."Entrepreneurial spirit is characterized by innovation and risk-taking."
The exploitation of entrepreneurial opportunities may include actions such as developing
a business plan, hiring the human resources, acquiring financial and other required resources,
providing leadership and being responsible for the venture's success or failure. Joseph
Schumpeter (18831950) stated that the role of the entrepreneur is creative destruction and the
changes and dynamic disequilibrium brought on by the innovating entrepreneur ... is the norm
of a healthy economy.
Entrepreneurship typically operates within an entrepreneurship ecosystem which includes
government programs and services that promote and support entrepreneurs non-government
organizations such as small business associations or organizations that offer advice and
mentoring to entrepreneurs (e.g., through entrepreneurship centers or websites), entrepreneurship
resources (e.g., business incubators and seed accelerators), entrepreneurship education programs,
training and financing (e.g., loans, venture capital financing, angel investing and grants). The
best entrepreneurship ecosystems are those found in top entrepreneurship hubs such as Silicon
Valley, where there is a cluster of high-tech firms, top research universities and venture
capitalists.
Concept of Entrepreneurship:
The word entrepreneur is derived from the French verb enterprendre, which means to
undertake. This refers to those who undertake the risk of new enterprises. An enterprise is
created by an entrepreneur. The process of creation is called entrepreneurship.

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Entrepreneurship is a process of actions of an entrepreneur who is a person always in search of
something new and exploits such ideas into gainful opportunities by accepting the risk and
uncertainty with the enterprise.

1.2 Characteristics of Entrepreneurship:

Entrepreneurship is characterized by the following features:
1. Economic and dynamic activity:
Entrepreneurship is an economic activity because it involves the creation and operation of an
enterprise with a view to creating value or wealth by ensuring optimum utilisation of scarce
resources. Since this value creation activity is performed continuously in the midst of uncertain
business environment, therefore, entrepreneurship is regarded as a dynamic force.
2. Related to innovation:
Entrepreneurship involves a continuous search for new ideas. Entrepreneurship compels an
individual to continuously evaluate the existing modes of business operations so that more
efficient and effective systems can be evolved and adopted. In other words, entrepreneurship is a
continuous effort for synergy (optimization of performance) in organizations.

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3. Profit potential:
Profit potential is the likely level of return or compensation to the entrepreneur for taking on the
risk of developing an idea into an actual business venture. Without profit potential, the efforts of
entrepreneurs would remain only an abstract and a theoretical leisure activity.
4. Risk bearing:
The essence of entrepreneurship is the willingness to assume risk arising out of the creation and
implementation of new ideas. New ideas are always tentative and their results may not be
instantaneous and positive.
An entrepreneur has to have patience to see his efforts bear fruit. In the intervening period (time
gap between the conception and implementation of an idea and its results), an entrepreneur has to
assume risk. If an entrepreneur does not have the willingness to assume risk, entrepreneurship
would never succeed.
1.3 Importance of Entrepreneurship:
1. Development of managerial capabilities:
The biggest significance of entrepreneurship lies in the fact that it helps in identifying and
developing managerial capabilities of entrepreneurs. An entrepreneur studies a problem,
identifies its alternatives, compares the alternatives in terms of cost and benefits implications,
and finally chooses the best alternative.
This exercise helps in sharpening the decision making skills of an entrepreneur. Besides, these
managerial capabilities are used by entrepreneurs in creating new technologies and products in
place of older technologies and products resulting in higher performance.
2. Creation of organizations:
Entrepreneurship results into creation of organizations when entrepreneurs assemble and
coordinate physical, human and financial resources and direct them towards achievement of
objectives through managerial skills.
3. Improving standards of living:

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By creating productive organizations, entrepreneurship helps in making a wide variety of goods
and services available to the society which results into higher standards of living for the people.
Possession of luxury cars, computers, mobile phones, rapid growth of shopping malls, etc. are
pointers to the rising living standards of people, and all this is due to the efforts of entrepreneurs.
4. Means of economic development:
Entrepreneurship involves creation and use of innovative ideas, maximization of output from
given resources, development of managerial skills, etc., and all these factors are so essential for
the economic development of a country.

Factors affecting Entrepreneurship:

Entrepreneurship is a complex phenomenon influenced by the interplay of a wide variety of

factors.
Some of the important factors are listed below:
1. Personality Factors:
Personal factors, becoming core competencies of entrepreneurs, include:
(a) Initiative (does things before being asked for)
(b) Proactive (identification and utilization of opportunities)
(c) Perseverance (working against all odds to overcome obstacles and never complacent with
success)
(d) Problem-solver (conceives new ideas and achieves innovative solutions)
(e) Persuasion (to customers and financiers for patronization of his business and develops &
maintains relationships)
(f) Self-confidence (takes and sticks to his decisions)
(g) Self-critical (learning from his mistakes and experiences of others)
(h) A Planner (collects information, prepares a plan, and monitors performance)
(i) Risk-taker (the basic quality).
2. Environmental factors:
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These factors relate to the conditions in which an entrepreneur has to work. Environmental
factors such as political climate, legal system, economic and social conditions, market situations,
etc. contribute significantly towards the growth of entrepreneurship. For example, political
stability in a country is absolutely essential for smooth economic activity.
Frequent political protests, bandhs, strikes, etc. hinder economic activity and entrepreneurship.
Unfair trade practices, irrational monetary and fiscal policies, etc. are a roadblock to the growth
of entrepreneurship. Higher income levels of people, desire for new products and sophisticated
technology, need for faster means of transport and communication, etc. are the factors that
stimulate entrepreneurship.
Thus, it is a combination of both personal and environmental factors that influence
entrepreneurship and brings in desired results for the individual, the organization and the society.
1.4 Types of Entrepreneurs:
Depending upon the level of willingness to create innovative ideas, there can be the
following types of entrepreneurs:
1. Innovative entrepreneurs:
These entrepreneurs have the ability to think newer, better and more economical ideas of
business organization and management. They are the business leaders and contributors to the
economic development of a country.
Inventions like the introduction of a small car Nano by Ratan Tata, organized retailing by
Kishore Biyani, making mobile phones available to the common may by Anil Ambani are the
works of innovative entrepreneurs.
2. Imitating entrepreneurs:
These entrepreneurs are people who follow the path shown by innovative entrepreneurs. They
imitate innovative entrepreneurs because the environment in which they operate is such that it
does not permit them to have creative and innovative ideas on their own.
Such entrepreneurs are found in countries and situations marked with weak industrial and
institutional base which creates difficulties in initiating innovative ideas.
In our country also, a large number of such entrepreneurs are found in every field of business
activity and they fulfill their need for achievement by imitating the ideas introduced by
innovative entrepreneurs.
Development of small shopping complexes is the work of imitating entrepreneurs. All the small
car manufacturers now are the imitating entrepreneurs.
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3. Fabian entrepreneurs:
The dictionary meaning of the term fabian is a person seeking victory by delay rather than by a
decisive battle. Fabian entrepreneurs are those individuals who do not show initiative in
visualizing and implementing new ideas and innovations wait for some development which
would motivate them to initiate unless there is an imminent threat to their very existence.

4. Drone entrepreneurs:
The dictionary meaning of the term drone is a person who lives on the labor of others. Drone
entrepreneurs are those individuals who are satisfied with the existing mode and speed of
business activity and show no inclination in gaining market leadership. In other words, drone
entrepreneurs are die-hard conservatives and even ready to suffer the loss of business.
5. Social Entrepreneur:
Social entrepreneurs drive social innovation and transformation in various fields including
education, health, human rights, workers rights, environment and enterprise development.
They undertake poverty alleviation objectives with the zeal of an entrepreneur, business practices
and dare to overcome traditional practices and to innovate. Dr Mohammed Yunus of Bangladesh
who started Gramin Bank is a case of social entrepreneur.
1.5 Functions of an Entrepreneur:
The important functions performed by an entrepreneur are listed below:
1. Innovation:
An entrepreneur is basically an innovator who tries to develop new technology, products,
markets, etc. Innovation may involve doing new things or doing existing things differently. An
entrepreneur uses his creative faculties to do new things and exploit opportunities in the market.
He does not believe in status quo and is always in search of change.
2. Assumption of Risk:
An entrepreneur, by definition, is risk taker and not risk shirker. He is always prepared for
assuming losses that may arise on account of new ideas and projects undertaken by him. This
willingness to take risks allows an entrepreneur to take initiatives in doing new things and
marching ahead in his efforts.
3. Research:
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An entrepreneur is a practical dreamer and does a lot of ground-work before taking a leap in his
ventures. In other words, an entrepreneur finalizes an idea only after considering a variety of
options, analyzing their strengths and weaknesses by applying analytical techniques, testing their
applicability, supplementing them with empirical findings, and then choosing the best alternative.
It is then that he applies his ideas in practice. The selection of an idea, thus, involves the
application of research methodology by an entrepreneur.
4. Development of Management Skills:
The work of an entrepreneur involves the use of managerial skills which he develops while
planning, organizing, staffing, directing, controlling and coordinating the activities of business.
His managerial skills get further strengthened when he engages himself in establishing
equilibrium between his organization and its environment.
However, when the size of business grows considerably, an entrepreneur can employ
professional managers for the effective management of business operations.
5. Overcoming Resistance to Change:
New innovations are generally opposed by people because it makes them change their existing
behavior patterns. An entrepreneur always first tries new ideas at his level.
It is only after the successful implementation of these ideas that an entrepreneur makes these
ideas available to others for their benefit. In this manner, an entrepreneur paves the way for the
acceptance of his ideas by others. This is a reflection of his will power, enthusiasm and energy
which helps him in overcoming the societys resistance to change.
6. Catalyst of Economic Development:
An entrepreneur plays an important role in accelerating the pace of economic development of a
country by discovering new uses of available resources and maximizing their utilization.
To better appreciate the concept of an entrepreneur, it is desirable to distinguish him from an
entrepreneur and promoter.
1.6 Benefits Of Entrepreneurship
Any individual, who possesses a business, firm, or venture, is known as an entrepreneur. He or
she is accountable for its development, the inherent risks and returns associated with it.
Entrepreneurship is defined as the practice of beginning a new trade or reviving an existing
business, for capitalizing on fresh opportunities. The entrepreneurial activities for a particular
kind of business depends upon various factors and is quite specific on the kind of business or
firm being run. Whatever may be the course of action, entrepreneurship has a lot of benefits both
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for the entrepreneurs and the society in which these businesses are carried out. Some of these
benefits include:
1. Opportunity to get control.
Owning a firm or a business endows the entrepreneurs with the independence and opportunity to
control their own business. They can aim to achieve targets that are important to them.
Entrepreneurship provides entrepreneurs a chance to take decisions according to their own
wishes.

2. Offers a chance to make a difference

Some people begin and put a lot of effort just to make a difference in society. This has given rise
to the concept of social entrepreneurship, which is a recent phenomenon. Such people search for
opportunities to serve a cause that is significant to them and try to find pioneering solutions to
some of the most pressing and challenging problems of society.
3. To reap high Profits
Reaping high profits by being an entrepreneur is one of the most important factors that motivate
people to become one and take up all the challenges associated with it. The profits their
companies and businesses make play a vital role in any decision made by entrepreneurs. Owning
a business or a firm is the best way towards accumulation of wealth.
4. Helps people work to their full potential
Many entrepreneurs find their work to be extremely enjoyable. They consider their business as
an instrument of self-actualization and self-expression. Owning a firm or a business acts as a test
for the creativity skills, abilities, and determination of an entrepreneur and is taken up as a
challenge towards success.
5. Offers a chance to pursue their interests.
Most entrepreneurs dont believe their work to be actual work. Most of them establish businesses
closely associated with their interests. As such, there is no particular age for retirement of
entrepreneurs. With all these benefits people now consider the alternative of running their own
small businesses rather than doing jobs for others.

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CHAPTER 2: FINANCIAL
INSTITUTIONS IN
PROMOTING
ENTREPRENEURSHIP

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CHAPTER 2: FINANCIAL INSTITUTIONS IN PROMOTING
ENTREPRENEURSHIP
INTRODUCTION
With the quickened pace of economic development under the impetus of the Five-Year Plans, the
most striking change in the Indian economy has been the initiation of an industrial revolutionist
and the reemergence of small-scale industries. Further, during the past decade, there has been a
deepening as well as widening of the entrepreneurial structure as well as the small-scale
preindustrial structure. Not only have the established small industries increased their installed
capacity and output, but a wide range of new small industries has also come into being. During
the last two decades, there is a boom of entrepreneurial activities in the country. Thus, in the field
of capital-and product goods industries, enterprises manufacturing such items as machine tools,
electrical and engineering equipment, chemicals etc., which provide the foundation for a self
(sustained growth of the economy have been set-up. Amongst the consumer goods industries,
small units producing such items as -bicycles, sewing machines, plastic products, etc. are
forgoing ahead.
These far-reaching developments and the scale and scope of operation of entrepreneurs,
particularly in small-scale industries, have brought to the fore the importance -of provision of
administrative and institutional assistance at various levels.
Over the years, financial institutions are playing a key role in providing finance and counseling
to the entrepreneurs to start new ventures as well as mode diversify and even rehabilitate sick
enterprises. In this context, we shall discuss the scale and scope of operation of various
development banks (institutions) that have been rendering financial assistance, directly or
indirectly, to entrepreneurs and their various ventures.
Development Function
The need for capital is continuous and (also boundless. However, capitals is not only necessary
for development but capital, (also generated by development. Economic progress creates its
surpluses with which further deployment is achieved, often at an accelerated rate. Indias FiveYear Plans are a proof in themselves that substantially larger resources used is each successive
plan same from the economic growth resulting from investment in the preceding plans. Only a
relatively small part of the resources came from external sources though they were crucial to
Development. Similarly, in consonance with the development activities in the country, the
development banks activities are on higher scale as well as diversified in multi-directional way.

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Institutional Finance
With the launching of the Five Year Plans, in the absence of a sufficiently broad domestic capital
market, there .was need for adopting and enlarging the Institutional structure to meet the medium
and long-term credit requirements of the industrial sector. It was in this context that the RBI took
the initiative in setting-up statutory corporations at the all-India and regional levels to function
as specialized financial agencies purveying term credit.
Institutional Framework for Industry
Institutional finance for -large, medium, small and tiny industries by commercial banks - the
State Bank of India group, nationalized banks, private sector banks and development
corporations which have been especially established to provide industrial finance. In addition,
the Reserve Bank of India gives credit guarantees and the ECGC gives export guarantees to the
small-scale sector. By its refinance operations, the Industrial Development Bank of India, too,
plays a significant role in the promotion of the small scale-sector for it has enabled the SFCs
SSIDC/SSIACS and commercial banks to extend a large quantum of financial assistance to this
sector. The National Small Industries Corporation offers financial assistance is the form of its
hire-purchase schemes.
This apart, a host of newly cropped up institutions such as mutual funds, lease companies,
financial service institutions, investment companies, merchant banks, asset management
companies etc. provide financial assistance and financial services to industries. Some of them go
to the extent of conceiving a project and see through its progress till the end.
In India, long-term loans are provided for a host of financial institutions of the five all-India
develop merits IDBI and SIDBI are apex banks providing refinance facilities to other
institutions. Like-wise, NABARD is an apex bank for agricultural finance and Exim bank of
export import trade. Then industrial development banks, special institutions, saving and
investment institutions, financial service institutions and regulatory institutions. RBI, SEBI, and
NSEIL are three regulatory bodies.

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CHAPTER 3:
LONG TERM FUNDS

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CHAPTER 3: LONG TERM FUNDS
1. Industrial Finance Corporation of India (IFCI)
Incorporation and Purpose
The Industrial Finance Corporation of India (IFCI) was established in 1948 under an Act of
Parliament with the object of providing medium and long-term credit to industrial concerns in
India. IFCI transformed into a corporation from 21st May, 1993 to, provides greater flexibility
to respond to the needs of the rapidly changing financial system.

Management
1
2
3
4

The Board of Directors consists of a whole-time Chairman and twelve directors.

The Chairman is appointed by the Central Government after consultation with the lDBI.
Two directors are nominated by the Central Government and four by the lDBI.
Six Directors are elected by shareholders other than the IDBI.

Financial assistance provided by the IFCI can be in one or more of the

following forms:
Rupee and foreign currency term loans.
Underwriting of share and debenture issues.
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Direct subscription to equity
Guarantees
Soft loans
Equipment financing

Forms of Assistance
Section 23 of the IFCI Act outlines the types of activities, which the Corporation is authorized, to
undertake. These are indicated below with the year in which it was authorized to undertake each
type of activity shown within the brackets.
1) Granting loans on subscribing to debentures repayable within a period not exceeding 25 years.
(1948)
2) Underwriting the issue of stock, shares, bonds or debentures by industrial concerns provided
that it does not retain any shares, etc., which it may have had to take up in fulfillment of its
underwriting liabilities beyond a period of 7 years except with the permission of the central
Government (now the IDBI).
3) Guaranteeing loans
a. raised by industrial concerns, which are repayable within a period not exceeding 25 years and
are floated in the market. (1948)
b. raised by industrial concerns from scheduled banks or state cooperative banks (1960)
4) Guaranteeing deferred payments due from any industrial concern
a. In connection with the import of capital goods from outside India
b. In connection with the purchase of capital goods within India
5) Guaranteeing loans (with the prior approval of the Central Government) raised from, or credit
managements made with, any bank or financial institution in any country outside India by
Industrial concerns in foreign currency (1960)
6) Acting as agent for the Central Government or, with its approval, for the International Bank
for Reconstruction and Development (lBRD) in respect of loans granted or debentures
subscribed by either of them (1952)
7) Subscribing to the stock or shares of any industrial concern (1960)

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Functions and Lending Policies
Any limited company or co-operative society incorporated and registered in India which is
engaged, or proposes to engage itself, in the manufacture, preservation or processing of goods, or
in the shipping, mining or hotel industry, or in the generation or distribution of electricity or any
other form of power, is eligible for financial assistance from the Cooperation on the same basis
as industrial projects in the private and joint sectors.
Public sector projects are also eligible for financial assistance from the Corporations on the.
Same basis as industrial projects in the private and joint sectors. The assistance may take the
form of long-term loans both in rupees and foreign currencies, the underwriting of equity,
preference and debenture issues; subscribing to equity, preference and debenture capital;
guaranteeing of deferred payments in respect of machinery imported from abroad of purchased
in India. And guaranteeing of loans raided in foreign currency from foreign financial institutions.
Financial projects and for the expansion, diversification, renovation or modernization of existing
ones.
Financial assistance on concessional terms is available for the setting-up of new industrial
projects in industrially less developed districts in the States/Union Territories notified by the
Central Government.
New Promotional Schemes
In 1989, the Corporation framed two new schemes of promotional activities, which (encourage
new entrepreneurs and technologists to set up their own industries, and which assist in the
growth of indigenous technology and small industries. The scheme for encouraging the
development of ancillary industries was liberalized.
The present positions is that IFCI has fourteen Promotional Schemes, of which eight areconsultancy fee subsidy schemes, four interest subsidy schemes and two entrepreneurship
development schemes, as per details given below:
Consultancy Fee Subsidy Schemes
Scheme of subsidy to small entrepreneurs in the Rural, cottage, tiny and small sectors for
meeting cost of feasibility studies, etc.
Scheme of subsidy for consultancy to industries relating to animal husbandry, dairy farming,
poultry forming and fishing.
Scheme of subsidy for consultancy to industries based on or related to agriculture, horticulture,
sericulture and Pisciculture.
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Scheme of subsidy for promotion of ancillary and small-scale industries.
Scheme of subsidy to new entrepreneurs for meeting cost to market research surveys.
Scheme of subsidy for Providing Marketing Assistance to Small Scale Units.
Scheme of subsidy for Consultancy on Use of Non-Conventional Sources of Energy and
Energy Conservation Measures.
Scheme of Subsidy for Control of Pollution in the Village and Small Industries Sector.
Own generation by way of repayment of past borrowings and plough-back of profits.

2. The Industrial Development Bank of India (IDBI)

The industrial bank of India (IDBI) was established on 1 July, 1964 under the industrial
development bank of India act, as a wholly owned subsidiary of the reserve bank of India.
In terms of the public financial institutions laws (Amendment) Act, 1975, the ownership of the
lDBI has been transferred to the central government with effect from 16 the February 1976. The
most distinguishing feature of the lDBI is that it has been assigned the role of the principal
financial institution for co-ordinating, in conformity with national priorities, the activities of the
institutions engaged in financing, promotion or developing industry. The IDBI has been assigned
a special role to play in regard to industrial development.

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Objectives and Functions

To serve as an apex institution for term finance for industry, to co-ordinate the working of
institutions engaged in financing, promoting or developing industries and to assist in the
development of these institutions.
To plan, promote and develop industries to fill gaps in the industrial structure in the country.
To provide technical and administrative assistance for promotion, management or expansion of
industry.
To undertake market and investment research and surveys as also technical and economic
studies in connection with development of industry.
To act as lender of last resort and to finance all types of industrial concerns which are engaged,
or which propose to be engaged, in the manufacture, processing or preservation of goods, or in
mining, shipping, transport, hotel industries, or in the generation distribution of power, in fishing
or in providing shore fishing, or in the maintenance, repairs, testing or servicing of machinery or
vehicles, vessels, etc., or for the setting-up of industrial estates. The Bank may also assist
industrial concerns engaged in the research and development of any process or product or in
providing special or technical knowledge or other services for the promotion of industrial
growth. Besides, it provides finance or the export of engineering goods and service on deferred
payment basis.
The IDBI has been playing a significant role in the promotion of small-scale industries. Its
assistance has been channeled through its scheme for the refinance of industrial loans, and to a
limited extent, through the Bills Rediscounting Scheme. Since its inception, the lost has been
playing a significant role in the promotion of small scale industries.
Its assistance has been channeled through its scheme for the refinance of industrial loans, and to
a limited extent, through the Bills Rediscounting Scheme Since its inception, the IDBI has been
operating a special scheme of concessional assistance to the small-scale sector. The procedure in
respect of loans to the small-scale sector has been put on a semi automatic basis under the
liberalized refinance scheme (LRS).
IDBI Schemes
IDBI is having the following schemes for the benefit of enterprise and entrepreneurs in the small
and medium scale sector;

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Direct Assistance
Project finance scheme (loans, underwriting, direct subscription and guarantees);
Project Finance Scheme (loans, underwriting, direct subscription and guarantees)
o
o
o
o
o
o
o
o

Modernization Assistance Scheme for all industries;

Textile Modernization Fund Scheme;
Technical Development Fund Scheme;
Venture Capital Fund Scheme;
Energy Audit Subsidy Scheme;
Equipment Finance for Energy Conservation Scheme;
Equipment Finance Scheme;
Foreign Currency Assistance Scheme.

Indirect Assistance
Refinance Scheme for Industrial Loans for Small and Medium Industries;
Refinance Schemes for Modernization and Rehabilitation of Small and Medium Industries;
Equipment Refinance Scheme;
Bills. Discounting/Rediscounting Scheme;
Seed Capital Scheme;
Scheme for Concessional Assistance for Development of No-Industry Districts and Other
Backward Areas;
Scheme for Concessional Assistance for Manufacture & Industrialization of
Renewable Energy Systems;
Scheme for Investment Shares and Bonds of Other Financial Institutions.

3. ICICI (The Industrial Credit and Investment Corporation of India)

The ICICI (Industrial Credit and Investment Corporation of India) was conceived as a private
sector development bank in 1955 with the primary function of providing development finance to
the private sector. Its objectives now include:
assisting in the creation, expansion and modernization of such enterprises;
encouraging and promoting the participation of private capital, both internal and external, in
ownership of industrial investment and the expansion of investment markets.
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Apart from its head office at Mumbai, the ICICI has four regional offices located at Mumbai,
Calcutta, Chennai and New Delhi.
Financial assistance is being provided by ICICI in the following forms:
Rupee and foreign currency term loans
Underwriting of share and debenture issues
Direct subscription to equity
Guarantees
Soft loans
Suppliers line of credit for promoting sale of industrial equipment on deferred payment terms
Lease financing
Financial Indo-US joint ventures in research and development.
In practice only such projects costing in excess of Rs. 300 lakh are considered for financial
assistance by the ICICI. However, for purpose of foreign currency loans, no minimum project
cost restriction is imposed.

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Finance for Industry

Over the past thirty years, the ICICI, in pursuit of its objective of promoting industrial
development, has provided financial assistance in various forms, such as:
Underwriting of public and private issues and offers of sale of industrial securities ordinary
shares, preference shares, bonds and debenture stock;
Direct subscription to such securities;
Securing loans in rupees, repayable over periods up to 15 years.
Providing similar loans in foreign currencies for the payment for imported capital equipment
and technical services;
Guaranteeing payments for credits made by others;
Providing credit facilities to-manufacturers for the promotion of the sale of industrial
equipment on deferred payment terms.
The primary purposes for which assistance is extended is the purchase of capital assets in the
form of land, buildings -and machinery. Of the alternative types of assistance provided by the
ICICI, the one best calculated to assure the success of enterprise in chosen in each case.
Any company with a limited liability (or the promoter of such a company), any sole proprietary
concern, partnership firm or any cooperative society may approach the ICICI for assistance in
financing a sound proposal for the establishment, expansion or modernization of an industrial
enterprise.
The applicant may be an Indian or foreigner; his plans may provide for invent in any part of
India; he may require assistance in any form. He must, however, be prepared to make a
reasonable contribution to the resources required for the implantation of his proposal. The
enterprise should have, or should undertake to obtain, experienced management and expert
technical personnel and advice. Special consideration is given to projects promoted by new
entrepreneurs and those who desire to set up industries in backward areas.
There are neither firm limits to the size of the enterprise the ICICI is prepared to assist, nor is
there a maximum or a minimum limit to the assistance that it may offer. In practice, the lower
limit of the finance provided by the ICICI is set at Rs. 5 lakh because there are other institutions
which provide assistance for smaller amounts. However, to meet the requirements of industry for
loans in foreign currency, the ICICI may offer assistance for smaller amounts. However, to meet
the requirements of industry for loans in foreign currency, the ICICI may offer assistance below
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this limit. At the upper end, prudence requires that it limit the proportion of its resources, which
it can safely invest in a single enterprise. However, no proposal is too large for the ICICI to
handle it is prepared to enlist the cooperation of other financial institutions, in India and abroad,
to share in the investment.
In promoting industrial investment, the ICICI is anxious not only to invest, but also to encourage
others to invest. Accordingly, it seeks to encourage other financial institutions and individuals,
both Indian and - foreign, to co-operate with it in its investment and lending operations. .
In order to promote new industries, to assist in the expansion and modernization of existing
industries, and to furnish technical and managerial assistance, the ICICI grants long term and
medium term loans, subscribes to shares, underwrites new shares and debentures, guarantees
loans from other private investment sources, and provides managerial and technical advice.
ICICI also provides assistance byway of suppliers credit, equipment, leasing, installment sale
and venture capital and renders merchant banking services. Technology, development and
Information Company of India Ltd. (TBICI), established by ICICI in 1988, provides
technological information and finances technology intensive development activities including
commercial R&D schemes. It also manages the venture capital fund of Rs. 20 crores that ICICI
had established along with UTI in 1988.

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4. The Small Industries Development Bank of India (SIDBI)
The idea of setting up small industries development bank of India (SIDBI), in response to a long
standing domain form the small scale sector as an apex level national institution for promotion,
financing and development of industries in the small scale sector, embodied an opportunity to set
up proactive, responsive and forward looking institution to serve the current and emerging needs
of small scale industries in the country. As a precursor to the setting up of the new institution, the
small industries development fund was cleared by industrial development fund was created by
industrial development bank of India (IDBI) in 1986 exclusively for refinancing, bills
rediscounting and equity support to the small castle sector.
The outstanding portfolio of the order of Rs. 4200 crore from IDBI was transferred to SIDBI in
March 1990. SIDBI started off from a strong base; percentage of IDBI, banking of a special
statute, the small industries development bank of India act of 1989, a large capital base of Rs,
450 crore, availability of experienced manpower endowed with development banking skills
carved out of IDBIs professional staff and ready availability of a cast network of institutional
infrastructure and enduring financial linkages with state financial corporations (SFCs),
commercial banks and other institutions; all these augured well for the growth of the nascent
institution. SIDBI became operational on April 2, 1990.
The Environment
Indian economy has been in transition for most part of the last five years: the industrial policy,
fiscal policy, public sector policy, foreign investment policy, trade policy and monetary and
credit policies have been in various stages of liberalization.
Decontrol, deregulation and delicensing have given enormous scope for private initiative and
market forces to come to play. New relationships within and between different sectors in the
economy are being evolved; the small-scale sector has been an important constituent of such a
liberalization in the country, Government of India formulated a set of new policies aimed at
harnessing the potential of the small-scale sector in August 1991 a year and-half after the
establishment of SIDBI. The prescriptions of the policy focused at removal of implements
affecting the growth of small-scale sector together With consolidation of the strengths, in the
context of the emerging economic order. SIDBI has been refining its strategies and business
policies in alignment with the policy, charges that have been taking place at the national level.
Operational Strategy
Stepping up of flow of credit to the units in the small scale sector through direct and indirect
financing mechanisms and ensuring speedy disbursement have remained the, main plank of the
operational strategy of SIDBI. Over the years, the share of direct assistance in the total assistance
has steadily gone up.
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5. Life Insurance Corporation of India
The Life Insurance Corporation of India. (LIC) was set up under the LIC Act in 1956, as a
wholly-owned Corporation of the Government of India, on nationalization of the life insurance
business in the country. LIC took over the life insurance business from private companies to
carry on the business and deploy the funds in accordance with the Plan priorities. UC operates a
variety of schemes so as to extend social security to various segments of society and for the
benefit of individuals and groups from the urban and rural areas. The Committee on Reforms in
the Insurance Sector set up by the Government has recommended privatization and restructuring
of UC with Government -retaining 50% stake. The Committee has also suggested that foreign
companies be allowed to conduct life insurance business in the country through joint ventures
with India partners.
According to the investment policy of LIC, out of the accretion to its Controlled Fund, not less
than 75% has to be invested in Central and State Government securities including Governmentguaranteed marketable securities in the form of shares, bonds and debentures. UC extends loans
for the development of socially-oriented sectors and infrastructure, facilities like housing, rural
electrification, water supply, sewerage and provides financial assistance to the corporate sector
by way of term loans and underwriting/direct- subscription to shares and debentures. UC also
extends resource support to other financial institutions by way of subscription to their shares and
bonds and also by way of term loans.

6. General Insurance Corporation of India

The General Insurance Corporation of India (GIC) was established in January 1973 on
nationalization of general insurance companies in the country. GIC has four subsidiaries, viz.,
National Insurance Co. Ltd., New India Assurance Co. Ltd., Oriental Fire & General Insurance
Co. Ltd. and United India Insurance Co. Ltd. GIC and its subsidiaries operate a number of
insurance schemes to meet the diverse and emerging needs of various segments of society. In the
recent past, GIC and its subsidiaries devised several need-based covers to keep pace with the
new liberalized economic environment.
The investment policies of GIC and its subsidiaries have been evolved within the ambit of the
provision 27(B) of the Insurance Act 1938 and guidelines issued by the Government from time to
time. According to Government guidelines, 70% of the annual accretions to their investible funds
are required to be invested in socially oriented sectors of the economy. Since April 1976, GIC
has been participating with other financial institutions in extending term loans to industrial
undertakings and providing facilities for underwriting/direct subscription to their shares and
debentures.

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CHAPTER 4:
WOMEN ENTREPRENEURSHIP

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CHAPTER 4: WOMEN ENTREPRENEURSHIP
Meaning and Concept of Women Entrepreneurship:
Increase in cost of living has prompted the Indian women to undertake economic activities in
order to support their families. They are coming forward to take risks, face challenges and prove
to the world that their role in the society is no more limited to that of buyers but they can be also
successful sellers.
There are thousands of good examples where women have shown entrepreneurial talents and
have succeeded. Women entrepreneurs are the key players in any developing country in terms of
their contribution to economic development. Now, it is imperative to know who is an women
entrepreneur.
In the simplest sense, women entrepreneurs are those women who take the lead and organize the
business or industry and provide employment to others. It signifies that section of female
population who venture out into industrial activities. It may be defined as a woman or group of
women who initiate, organize and run a business enterprise.
However, Government of India has given a broader definition of the term women entrepreneur. It
defined women entrepreneur as "an enterprise owned and controlled by women having a
minimum financial interest of 51% of the capital and giving at least 51% of the employment
generated in the enterprise to women".
According to J.A. Schumpeter, "Woman who innovates, imitates, or adopts a business activity is
called woman entrepreneur." Thus women entrepreneur are those women who initiate, organize
and operate business enterprise and want to prove their mettle in innovative and competitive
jobs. She also wants to oversee and control every aspects of her business for its overall success.
Growth of Women Entrepreneurship:
Almost half of India's population consists of women. But they constitute a very negligible
proportion of the total entrepreneurs. Entrepreneurial traits and competencies have not been well
developed amongst the women entrepreneurs. They are very shy in nature and emotionally
attached to the family. They are treated as weak and dependent on men. They are the neglected
sections in the society. The much low literacy rate 39%, low work participation rate 28% and low

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urban population share 10% of women as compared to 63%, 52% and 18% respectively of their
male counterpart well confirm their precarious position in the society.
In spite of the above, in sixties, women have started entrepreneurial activities as one- woman
enterprises at home and from home for self-occupation and engagement. The numbers of women
entrepreneurs were only 6000 which miserably low during the period.
Indian women started their entrepreneurial work in 1970s. Their entrepreneurship is traced out as
an extension of kitchen activities mainly pickles, powder and pappad. Women are encouraged to
start an occupation or venture with an urge to do something independently started to tide over
their economic difficulties and responsibilities.
In the seventies, Government of India has also brought a change in its policy objective of welfare
approach of women to development approach of women. Women were given priorities in all the
sectors including small scale industries sector. As a result, the number of women entrepreneurs
has increased over the years.
During 1980s, government and non-government bodies have paid increasing attention to women
entrepreneurs through formulation of various policies and programmes and introduction of new
schemes and incentives. It adopted a multi-disciplinary approach for development of women
entrepreneurs. Women entrepreneurs were given top priority for implementation of programmes
under agricultural and its allied activities of dairy farming, poultry, animal husbandry,
handlooms, handicrafts and small scale industries, etc.
In the nineties, out of the total women population of 437.10 millions, there are 126.48 million
women workforce of which only 1,85,900 women accounting for self employed in the country.
This indicates a dismally low level of women participation in the entrepreneurial activities.
Further women entrepreneurs in India accounted for 9.01% of the total 1.70 million
entrepreneurs during 1988-89. There were more than 2, 95,680 women entrepreneurs claiming
11.2% of the total 2.64 million entrepreneurs in India during 1995-96. The numbers of women
entrepreneurs have increased to 3, 28,000 in 1996-97.
During the ninth five year plan, the government has introduced in 1998 an important scheme on
Trade Related Entrepreneurship of Assistance and Development (TREAD) aiming at economic
empowerment of women in rural, urban and semi-urban areas. It develops their entrepreneurial
skill and eliminates the constraints faced by women entrepreneurs.
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The TREAD programme was operated through Small Industries Development Bank of India
(SIDBI). SIDBI has initiated various schemes for the growth of women entrepreneurs through
Mahila Udyam Nidhi (MUN), Mahila Vikash for Nidhi (MVN), Micro Credit Scheme (MSC),
Women Entrepreneurial Development Programme (EDP), and Marketing Development Fund
(MDF) for women entrepreneurs.
In the context of the opening up of the economy and the need for up gradation of technology, the
Consortium of Women Entrepreneurs of India (CWEI) is a common platform to help the very
women entrepreneurs in finding innovative techniques of production and marketing and finance.
Prime-Minister Rozgar Yojna (PMRY), National Rural Employment Programme and (NREP),
Rural Landless Employment Guarantee Programme (RLEGP) are some of the important schemes
floated by the Government which encourage women to enter into work entrepreneurial activities.
With growing awareness about business and due to growth of educational level, in professional
education, industrialization, urbanization and democratic values awareness, the tradition bound
Indian society has undergone a change and women entrepreneurs have shifted their
entrepreneurial activities to engineering, electronics and energy. They made personal choices,
stood up for their convictions and had the courage and strength to enter into new ventures. As a
result of these efforts, numbers of women entrepreneurs have increased over the years.
Characteristic of women entrepreneurship
1. Management and Control:
A woman or a group of women manages the whole business of enterprise. She prepares various
plans and executes them under her own supervision and control. There may be some persons to
help her but ultimate control lies with the woman.

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2. Employment to Women:
A woman entrepreneur must provide at least 51 percent of the employment generated in her
enterprise to women.
3. Risk-taking:
Risk means uncertainty. It is the condition of not knowing the outcome of an activity. A woman
entrepreneur takes calculated risk.
She faces uncertainty confidently and assumes risk. She has to tie up capital and wait for good
returns. A woman entrepreneur likes to take realistic risks because she wants to be a successful
entrepreneur.
4. Good organizer:
The most critical skill required for industrial development is the ability of building a sound
organization. A woman entrepreneur assembles, co-ordinates, organizes and manages the other
factors namely land, labor and capital. She obtains factors of production from the society and
supplies them finished product.
5. Self confidence:
It is essential to be a self confident for a woman entrepreneur. She should have faith in herself
and in her abilities. She should have the confidence to implement the change and overcome any
resistance to change. A woman entrepreneur should have courage to own the mistakes and
correct them.
6. Decisionmaker:

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The main function of a woman entrepreneur is to make decision. She takes various decisions
regarding the activities of her enterprise. She decides about the type of business to be done and
the way of doing it. A woman entrepreneur must be clear and creative in decision making
process.
7. Visionary:
A woman entrepreneur is one who incubates new ideas, starts her enterprise with these ideas and
provides added value to society based on their independent initiative.
8. Hard worker:
A distinguishing feature of a woman entrepreneur is the willingness to work hard. She has to
follow the principle, Hard-work is the key to success.

9. Achievement oriented:
A woman entrepreneur is an achievement oriented lady, not money hungry. She works for
challenge, accomplishment and service to others. Achievement orientation is a derive to
overcome challenges, to advance and to grow.
10. Optimistic:
A woman entrepreneur must be optimistic. She should approach her venture with a hope of
success and attitude for success rather than with a fear of failure. The positive thinking of woman
entrepreneur can turn the situation favorable to her.
11. Technically competent:
The success of an enterprise largely depends upon the ability of woman entrepreneur to cope
with latest technology. Technical competency refers to the ability to devise and use the better
ways of producing and marketing goods and services.
12. Bold and brave:
Women entrepreneurs face the adversities boldly and bravery. She has faith in herself and
attempts to solve the problems even under great pressure.
13. Mentally sound:
A woman entrepreneur is energetic, single-minded, having a mission and a clear vision. She
should be a lady of creative thinking and analytical thinking. She must be intelligent, adaptable
and problem solver.
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14. Leadership:
Leadership quality is one of the most important characteristic of a woman entrepreneur. It is the
process of influencing and supporting others to work enthusiastically towards achieving
objectives.
Problems of Women Entrepreneurs:
There are umpteen problems faced by women at various stages beginning from their initial
commencement of enterprise, in running their enterprise. Their various problems are as follows:
1. Patriarchal Society:
Entrepreneurship has been traditionally seen a male preserve and idea of women taking up
entrepreneurial activities considered as a distant dream. Any deviation from the norm is frowned
and if possible, immediately curbed. Women also have to face role conflict as soon as they
initiate any entrepreneurial activity. It is an uphill task for women to face such conflicts and cope
with the twin role.

2. Absence of Entrepreneurial Aptitude:

Many women take the training by attending the Entrepreneurship Development Programmes
without entrepreneurial bent of mind. As per a study, involvement of women in small scale sector
as owners stands at mere 7 percent. Women who are imparted training by various institutes must
be verified on account of aptitude through the tests, interviews etc.
3. Quality of EDPs:
All women entrepreneurs are given the same training through EDPs. Second-generation women
entrepreneurs dont need such training as they already have the previous exposure to business.
4. Marketing Problems:
Women entrepreneurs continuously face the problems in marketing their products. It is one of the
core problems as this area is mainly dominated by males and even women with adequate
experience fail to make a dent.

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For marketing the products women entrepreneurs have to be at the mercy of middlemen who
pocket the chunk of profit. Although the middlemen exploit the women entrepreneurs, the
elimination of middlemen is difficult, because it involves a lot of running about. Women
entrepreneurs also find it difficult to capture the market and make their products popular.
5. Financial Problems:
Obtaining the support of bankers, managing the working capital, lack of credit resources are the
problems which still remain in the males domain. Women are yet to make significant mark in
quantitative terms. Marketing and financial problems are such obstacles where even training
doesnt significantly help the women. Some problems are structural in nature and beyond the
control of entrepreneurs.
6. Family Conflicts:
Women also face the conflict of performing of home role as they are not available to spend
enough time with their families. They spend long hours in business and as a result, they find it
difficult to meet the demands of their family members and society as well. Their inability to
attend to domestic work, time for education of children, personal hobbies, and entertainment
adds to their conflicts.
7. Credit Facilities:
Though women constitute about 50 per cent of population, the percentage of small scale
enterprise where women own 51 percent of share capital is less than 5 percent. Women are often
denied credit by bankers on the ground of lack of collateral security. Therefore, womens access
to risk capital is limited.
The complicated procedure of bank loans, the inordinate delay in obtaining the loans and running
about involved do deter many women from venturing out. At the same time, a good deal of selfemployment programme has been promoted by the govt. and commercial banks.

8. Shortage of raw-materials:
Women entrepreneurs encounter the problems of shortage of raw-materials. The failure of many
women co-operations in 1971 such as these engaged in basket making were mainly because of
the inadequate availability of forest-based raw materials.
9. Heavy Competition:
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Many of the women enterprises have imperfect organizational set up. But they have to face
severe competition from organized industries.
10. High cost of production:
High cost of production undermines the efficiency and stands in the way of development and
expansion of womens enterprises, government assistance in the form of grant and subsidies to
some extent enables them to tide over the difficult situations. However, in the long run, it would
be necessary to increase efficiency and expand productive capacity and thereby reduce cost to
make their ultimate survival possible, other than these, women entrepreneurs so face the
problems of labour, human resources, infrastructure, legal formalities, overload of work, lack of
family support, mistrust etc.

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CHAPTER 5:
ROLE PLAYED BY
FINANCIAL
INSTITUTIONS IN
ENTREPRENEURSH
IP

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CHAPTER 5: ROLE PLAYED BY FINANCIAL INSTITUTIONS IN
ENTREPRENEURSHIP
Role played by financial institutions and commercial banks in providing financial assistance to
small scale entrepreneurs.
The small scale industrial sector raises term credit and working, capital required by it
from commercial banks, co- operative banks, regional rural banks and state- financial
corporations. The banking system provided mainly working capital and the State
Financial Corporations mainly provides investment capital.
Financial assistance in kind is available to the small- scale industrial sector from the
National Small Industries Corporation (NSIC) at the national level, the State Small
Industries Development Corporations (SSIDCs) at the state level which supply machinery
on hire- purchase basis.
The Industrial Development Bank of India (IDBI), the National Bank for Agriculture and
Rural Development (NABARD) and the Industrial Reconstruction Bank of India (IRBI)
provides refinance facilities to banks and financial corporations for financing the small
scale industrial sector.
The credit provided by banks to the small scale industrial sector is treated as credit to the
priority sector. The commercial banks are required to lend 40% of their total loans to
the priority sector, of which 15% to 16% are required to be in the form of direct
agricultural advances and the rest can be to small scale industry, small business, small
transport, operators etc.
State Financial Corporations provide financial assistance up to Rs. 60 Lakh to private/
public limited companies and up to Rs. 30 Lakh to proprietors and partnership firms.
Rates of interest charged vary according to the size of the loan and category of
entrepreneurs like SC/ ST, women entrepreneurs, ex-servicemen, physically handicapped
persons etc. Composite loans up to Rs. 50,000 are provided form meeting both term- loan
and working capital so that, the small scale entrepreneurs does not have to go to other
institutions.
Locus of control is an attribute indicating the sense of control that a person has over life.
One of the concerns the people have when considering forming a new venture is, whether
they will be able to sustain the drive and energy required not only to overcome the inertia
in forming something new but also to manage the new enterprise and make it grow.
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CHAPTER 6: MUDRA BANK

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CHAPTER 6: MUDRA BANK
Introduction
Micro Units Development and Refinance Agency Bank (MUDRA Bank), is a new institution
setup by the Government of India for development of micro units and refinance of MFIs to
encourage entrepreneurship in India & provide the funding to the non corporate small business
sector.
MUDRA Yojana had announced by the Finance Minister in Parliament during Union Budget for
FY 2016.
MUDRA Bank will need two type of product like refinance for the micro units having loan
requirement from Rs 50 thousands to 10 lakh and support of Micro Finance Institutions (MFI)
for on landing.
MUDRA will refinance to micro business under the scheme of Pradhan Mantri MUDRA Yojana.
MUDRA Scheme/ Yojana
Under the guideline of Pradhan Mantri MUDRA Scheme, MUDRA Bank has launched its three
initiative product and its name is SHISHU, KISHOR & TARUN to signify the stage of growth
and funding needs of the micro units or entrepreneur.
MUDRA Bank is refinancing through State level institutions, MUDRA will deliver the loan
through NBFCs, MFIs, Rural Banks, District Banks, Nationalize Banks, Private Banks, Primary
Lending Institutions and other intermediaries.
Interest Rate of MUDRA Bank
Loan: There is no fix Interest rate in MUDRA loan. According to source banks are charging
around Base Rate + 1% to 7% minimum. The interest rate can be higher according to risk and
customer profile and it can be different in all banks. So please check all nearest bank branches
once before apply the MUDRA Bank Loan. There is no subsidy for the loan given under PMMY.
However, if the loan proposal is linked some Government schemes, wherein the Government is
providing capital subsidy, it will be eligible under PMMY also.
The usual terms and conditions of the lending agency may have to be followed for availing of
loans under PMMY. The Interest rates are as per the RBI guidelines issued in this regard from
time to time.

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Eligibility for MUDRA Bank Loan
Any Indian Citizen who are involve in income generating activity such as manufacturing,
processing, trading or service sector and whose credit need is less than 10 lakh can approach
either a Banks, MFIs, Financial Institutions or NBFC for availing of MUDRA loans under
Pradhan Mantri Mudra Yojana (PMMY). MUDRA Bank is not refinancing agriculture sector
under PMMY but traders of vegetables & fruits covers under MUDRA Bank Schemes.
Recently Central Government decides to provide an additional fund of One Lakh crore to the
market and it will be allocate according to below list.40,000 Crore Rupee for Mudra Bank
Shishu Loan Scheme.35, 000 Crore Rupee for Mudra Bank Kishor Loan Scheme. 25, 000 Crore
Rupee for Mudra Bank Tarun Loan Scheme.
MUDRA Interest Rate
Modi Government has launched the MUDRA Scheme for weaker sections & small entrepreneurs
but after the launch there is not clarity on Interest Rate.
Now we are providing interest Rate details according to MUDRA Scheme.
MUDRA SHISHU Yojana
Under Mudra Shishu Yojana banks are providing loan up to 50,000/-. It is basic scheme and
banks are charging very nominal interest rate which is around 10% to 12%. We also found that
the Nationalize banks are charging less interest rate than private banks etc.
MUDRA KISHOR Yojana
Under Mudra Kishor Yojana bank are providing loan up to 5,00, 000/- rupee .It is middle scheme
& comes in category of unsecured loan & its Interest rate is high from14% to 17% depends on
bank to bank. We suggest you to differentiate interest rate between Nationalize bank and Private
bank before apply MUDRA Loan.
MUDRA TARUN Yojana
Mudra Tarun Yojana is the last scheme of government of India. Under MUDRA Tarun Scheme
applicant can apply loan between 5,00,001 to 10,00,000/-. It is also an unsecured Loan and its
rate of interest rate is high and starts from 16% and very bank to bank. In every case the interest
rate between Nationalize bank and Private banks are different. Please check interest rate before
apply loan.

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As per our experience banks are not taking interest to approve MUDRA loan because of insecure loan. Bank has right to disapprove your loan request but they will process your loan
application before deny. If you are still facing any issue or bank employees are harassing you or
demanding bribe. Please contact with CVO of concern Bank or local authority or mail at info (at)
mudrabank.com.
List of industries which are eligible for MUDRA Bank loan.
Non Corporate Small Business Segment (NCSBS) comprising of millions of
proprietorship /partnership firms running as small manufacturing units.
Service sector units :- Such as saloons, beauty parlors, gymnasium, boutiques, tailoring
shops, dry cleaning, cycle and motorcycle repair shop, DTP and Photocopying Facilities,
Medicine Shops, Courier Agents, etc.
Shopkeepers
Fruits / vegetable vendors
Truck operators :- purchase of transport vehicles for goods and personal transport such as
auto rickshaw, small goods transport vehicle, 3 wheelers, e-rickshaw, passenger cars,
taxis, etc.
Food-service units
Repair shops
Machine operators
Small industries:- handloom, power loom, chikan work, zari and zardozi work,
traditional embroidery and hand work, traditional dyeing and printing, apparel design,
knitting, cotton ginning, computerized embroidery, stitching and other textile non
garment products such as bags, vehicle accessories, furnishing accessories, etc.
Artisans
Food processors:- papad making, achaar making, jam / jelly making, agricultural produce
preservation at rural level, sweet shops, small service food stalls and day to day catering /
canteen services, cold chain vehicles, cold storages, ice making units, ice cream making
units, biscuit, bread and bun making, etc.
Lots of others in rural and urban areas.

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CHAPTER 7 CONCLUSION

Realizing that small scale enterprise lack sufficient finance to run their enterprises, the
government has set up a number of financial institutions-both at the Central and State level-to
provide financial assistance required by the entrepreneurs to run their units. The important types
of assistance are term finance, refinance, working capital finance, and underwriting, direct,
venture capital. Merchant banking, rehabilitation finance, exports finance, etc. Finance as life
blood is important but not a magic wand to run an enterprise. The supportive facilities and
services rendered by these institutions and centers include project appraisals, construction of
infrastructure facilities, distribution of raw materials by SSIs, rendering consultancy and training
services, conducting EDPs, undertaking industrial potential surveys, etc. institutions are not just
the latest buzzword in development of economics, they are the crucial and unavoidable upon
which societies develop and grow.

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BIBLIOGRAPHY
FINANCIAL INSTITUTIONS AND MARKETS BY LM BHOLE AND JITENDRA
MAHAKUD
MANANGEMENT OF FINANCIAL INSTITUTIONS IN INDIA
WEBLIOGRAPHY
www.scribd.com
www.mudra.org.in
www.google.com
www.businessdictionary.com
www.investopedia.com

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