SME Chapter Six

Unit VI - Project report and Role and Support of Government Institutions
Unit VI
Project report and Role and Support of
Government Institutions
Project Report
The project report is a document prepared by experts that contains all

information regarding the proposed project. It is served as a blueprint of all
operations. The project report is the business plan of action and clearly describes
its goals and objectives. It helps in transforming the business idea into a
productive venture without any confusion as it defines strategies for project
execution.
Project reports are important tools to both project teams and

stakeholders. Through these reports, we track the current progress of the
project and compare it against the original plan. They can identify risks early on,
and take corrective action. Reports estimate all costs of operations and possible
profitability of the proposed project.
Importance of Project Report:
 Project reports are an important source for managers and stakeholders, to

monitor the current progress and measure against the original schedule.
 It helps to predict the threats and develop proper steps to recover.
 The report makes it easier to control the cost and budget apart from the
budgeted cost.
 It will be a source of information to respond to success, stagnation, team
results, or quality of work.
 The project report requires completeness and accuracy, also ensures
coverage of all dimensions of the project, makes the data more viable.
 It helps the project manager to deal with potential or upcoming risks
during projects.
Compiled by – Dr. Pradip M. Joshi Page 1

 The report increases the amount of visibility into your projects and will
give you full insight into how your project is performing.
 It also helps to avail certain loans and funding from various banks, NBFC,
Private Equity, Venture Capital funds, Govt Schemes such as Mundra
Loan, and Financial institutions.
 It helps the entrepreneur to get an exact idea about the initial inputs
required for the business.
 Project Report is an important document for bank loan including business
plan, projected financials, viability study, technical analysis, etc, for availing
of the loan.
Contents of a Project Report
1. General Information
A project report must provide information about the details of

the industry to which the project belongs to. It must give
information about the past experience, present status, problems
and future prospects of the industry. It must give information
about the product to be manufactured and the reasons for
selecting the product if the proposed business is a
manufacturing unit. It must spell out the demand for the
product in the local, national and the global market. It should
clearly identify the alternatives of business and should clarify
the reasons for starting the business.
2. Executive Summary
A project report must state the objectives of the business and

the methods through which the business can attain success. The
overall picture of the business with regard to capital,

operations, methods of functioning and execution of the

business must be stated in the project report. It must mention
the assumptions and the risks generally involved in the business.
3. Organization Summary
The project report should indicate the organization structure

and pattern proposed for the unit. It must state whether the
ownership is based on sole proprietorship, partnership or joint
stock company. It must provide information about the bio data
of the promoters including financial soundness. The name,
address, age qualification and experience of the proprietors or
promoters of the proposed business must be stated in the
project report.
4. Project Description
A brief description of the project must be stated and must

give details about the following:
 Location of the site,
 Raw material requirements,
 Target of production,
 Area required for the work shed,
 Power requirements,
 Fuel requirements,
 Water requirements,
 Employment requirements of skilled and unskilled labour,
 Technology selected for the project,
 Production process,

 Projected production volumes, unit prices,

 Pollution treatment plants required.
If the business is service oriented, then it must state the type

of services rendered to customers. It should state the method
of providing service to customers in detail.
5. Marketing Plan
The project report must clearly state the total expected demand
for the product. It must state the price at which the product
can be sold in the market. It must also mention the strategies to
be employed to capture the market. If any, after sale service is
provided that must also be stated in the project. It must describe
the mode of distribution of the product from the production unit
to the market. Project report must state the following:
 Type of customers,
 Target markets,
 Nature of market,
 Market segmentation,
 Future prospects of the market,
 Sales objectives,
 Marketing Cost of the project,
 Market share of proposed venture,
 Demand for the product in the local, national and the
global market,
 It must indicate potential users of products and
distribution channels to be used for distributing the
product.

6. Capital Structure and operating cost
The project report must describe the total capital requirements

of the project. It must state the source of finance, it must
also indicate the extent of owner’s funds and borrowed funds.
Working capital requirements must be stated and the source of
supply should also be indicated in the project. Estimate of total
project cost, must be broken down into land, construction of
buildings and civil works, plant and machinery, miscellaneous
fixed assets, preliminary and preoperative expenses and working
capital. Proposed financial structure of venture must indicate
the expected sources and terms of equity and debt financing.
This section must also spell out the operating cost.
7. Management Plan
The project report should state the following.
a) Business experience of the promoters of the business,

b) Details about the management team,
c) Duties and responsibilities of team members,
d) Current personnel needs of the organization,
e) Methods of managing the business,
f) Plans for hiring and training personnel,
g) Programmes and policies of the management.
8. Financial Aspects
In order to judge the profitability of the business a projected

profit and loss account and balance sheet must be presented in

the project report. It must show the estimated sales revenue,

cost of production, gross profit and net profit likely to be
earned by the proposed unit. In addition to the above, a
projected balance sheet, cash flow statement and funds flow
statement must be prepared every year and at least for a
period of 3 to 5 years. The income statement and cash flow
projections should include a three-year summary, detail by
month for the first year, and detail by quarter for the second
and third years. Break-even point and rate of return on
investment must be stated in the project report. The
accounting system and the inventory control system will be
used is generally addressed in this section of the project report.
The project report must state whether the business is
financially and economically viable.
9. Technical Aspects
Project report provides information about the technology and

technical aspects of a project. It covers information on
Technology selected for the project, Production process,
capacity of machinery, pollution control plants etc.
10. Project Implementation
Every proposed business unit must draw a time table for the
project. It must indicate the time within the activities involved
in establishing the enterprise can be completed. Implementation
schemes show the timetable envisaged for project preparation
and completion.

11. Social responsibility
The proposed units draws inputs from the society. Hence its
contribution to the society in the form of employment,
income, exports and infrastructure. The output of the business
must be indicated in the project report.
District industries Centre (DIC)
A District industries Centre is a district-level entity that assists in the

establishment of small businesses in the rural areas of India. Before establishing a
DIC, a potential entrepreneur must visit various organisations in order to obtain
the necessary support and facilities, and in many instances, most of them will be
located outside of their neighbourhood.
So, there were a lot of delays, as well as the entrepreneur having to incur many
expenses which they can’t afford. Due to these inconveniences, several agencies
of the state authority have now been assigned appropriately in charge to the
DIC. Thus, an entrepreneur may obtain all of the help they require in setting up
their business from a single institution, namely DIC.
Role of District Industries Centres (DICs)
District Industry Centres exist only to promote and support the businesses of
their respective states. The Department of Commerce and Industry in each state
forms DICs. Alongside DICs, Sub-District Industries Centres provide assistance.
DIC's responsibilities include:
 DIC assists an entrepreneur in the DIC programs and guarantees continuous

support during the establishment of their business.
 DIC offers young business owners a single-window clearing system that
allows them to settle their business-related problems quickly.

 DIC encourages the expansion and development of many manufacturing

industries in rural and urban communities.
 Under the Standup India Scheme, DIC provides financing for MSMEs,
start-ups and growing companies.
 DIC provides self-employed individuals with machinery and tools to help
them with their businesses.
 DIC also carries out a periodic assessment of their programs and schemes
to ensure proper implementation and operation.
Schemes Under the District Industries Centres (DICs)
Below is the list of DIC schemes:
 Prime Minister’s Employment Guarantee Program: This program started

its operations in 2008. This scheme's purpose is to assist educated but
jobless persons in rural and urban regions. It offers adequate job related
skills.
 DIC Loan Scheme: This scheme is accessible in cities and rural regions under
one lakh people and a capital investment less than ₹2 lakhs. It assists the
self-employed and smaller businesses in rural regions. Small size Industries
Board and Village Industries locate similar businesses and aid them in
obtaining an MSME loan.
 Seed Money Scheme: This program aids self-employed individuals who are
part of self-employment initiatives or specialised wage jobs. The financing
under the scheme is ₹25 lakhs. For ventures up to ₹10 lakhs, the seed
money support will be 15 percent. A loan from a bank will cover 75
percent of the project costs, with a maximum aid limitation of ₹3.75
lakhs for all SC/ST/OBC and the total support will be 20 percent.
 District Awards Scheme: This scheme, as the name implies, boosts the
morale of new and successful businesses by recognizing them with district-
level prizes. Every year, the District Advisory Committee picks such
businesses and honours them on Vishwakarma Jayanti.
 Entrepreneurship Development Training Program: This program prepares
educated but jobless individuals to get self-employment or professional
jobs. The Entrepreneurship Introductory Program (Udyojakta Paricha

Karyakram), Entrepreneurship Development Training Program and the
Technical Training Program are the 3 training programs offered under this
scheme.
Eligibility Criteria For Applying for a Training Program Under the

District Industries Centres (DICs)
The eligibility requirements to apply for the various programs under DIC are
different. You can review the requirements for each scheme separately to see if
you qualify for MSME financing. The following are the prerequisites for a DIC
credit for an MSME:
 Candidates must be at least eighteen years old.

 Candidates must have completed the eighth grade.
 The value of the manufacturing company has to be greater than ₹10
lakhs, and the price of the product or commercial sector must be greater
than ₹5 lakhs.
To obtain a District Industry Centre certificate you will require only a few
documents. And these are Aadhar Card, the name and address proof of your
company, banking information, the date of the company's inception, the main
function of the company, the nature of business, the count of workers (if there
are any), and the business's financing details.
Maharashtra Industrial Development Corporation (MIDC)
Maharashtra Industrial Development Corporation (MIDC) is the nodal Investment

Promotion agency under the Government of Maharashtra.It provides businesses
with infrastructure such as land, roads, water supply, drainage facilities and
street lights etc.

Role of MIDC
Maharashtra State Financial Corporation

In the growth of the small and medium enterprises of the States, State
Financial Corporation, also known as SFC in short-form, plays a vital role. What
the SFC or State Financial Corporation does is provide Financial assistance to
small and medium enterprises. SFC provides this Financial assistance in various
forms, such as a direct subscription to the debentures or the equity, direct
subscriptions to the term loan, guarantees, discounting of the bills of exchange
and seed or the special capital. From all this, we can conclude that State
Financial Capital is an important aspect of commerce and hence it is important
for the students to study it.

Financial Capital (SFC) in detail.
The State Financial Corporations Act was passed in 1951 which empowered
all states and union territories to set up State Financial Corporations to meet
the need for financial assistance of micro, small and medium scale industries.
These State Financial Corporations provide loans to individual trading concerns,
partnership firms as well as private and public limited companies.
There are 18 State Financial Corporations in India at present, from which
17 are established in accordance with the State Financial Corporation Act 1951
and the eighteenth TamilNadu Industrial Investment Corporation Ltd was formed
according to Companies Act 1949. The State Financial Corporation of Punjab was
the first Financial Corporation to be set up in the country in 1953.
The Micro, Small, and Medium Enterprises are of increased importance in
India. They form a large part of Rural and Semi-Urban industries and provide
employment opportunities to a large number of people. The number of people
employed in Small and Medium industries is more as the technique of production
is labour-intensive than capital intensive. Due to the high number of employees
needed, the SMEs have a huge need for working capital and also fixed capital for
installing machinery and such. The State Financial Corporations are set up to
meet these requirements of Small and Medium Industries and to provide thrust
to the rural economy.
Functions of State Financial Corporations
The State Financial Corporations are established by the respective state
governments aimed at assisting Small and Medium industries. The major
functions of State Financial Corporations are-
1. Long Term Financial Assistance:

Providing long term financial assistance to finance small and medium industries is
the prominent function for which the State Financial Corporations are set up.
These enterprises may be in the form of individual proprietorships, partnership
firms, private or public companies and the maximum tenure of the loan is
twenty years.

2. Guarantee for Loans:

The State Financial Corporations also stand guarantee for loans taken by small
and medium business concerns from cooperative banks, commercial banks, or any
other banking financial institution for a tenure of up to 20 years.
3. Acts as Agents of Government:
The State Financial corporation also acts as an agent of the state as well as the
central government when it comes to implementing government schemes related
to small and medium industries financing. The SFCs also disburse loans as per
different schemes of the governments.
4. Underwriting and Subscription:
The State Financial Corporation also functions as an underwriter by underwriting
the shares of small and medium public companies. The SFCs also subscribe to
debentures of these small and medium firms which are of tenure of fewer than
20 years.
5. Credit and Guarantee for Purchases:
The State Financial Corporation also provides loans and guarantees deferred
payment for purchases for the industry like machinery, plant, or any other fixed
expenditure.
Working of (SFC) State Financial Corporations

Each State Financial Corporation is run and led by a board of directors.
The board of directors will have 10 members. The board itself is headed by a
managing director who is appointed by the state government in consultation
with the RBI. The state government also appoints three more directors. All
insurance companies, scheduled banks, investment banks, and other quasi-
government institutions elect the other three members. Therefore, the majority
of director appointments come from the government’s side.
The maximum paid-up capital of any State Financial Corporation is rupees
five crores. The minimum capital is fixed at rupees fifty lakhs. The total capital
of the State Financial Corporations is divided into shares and is acquired by the

state government, Reserve Bank of India, cooperative banks, other insurance, and
financial institutions, and even private parties.
SFCs can also add to its capacity of funds by issuing debentures and
bonds. These instruments will carry a fixed return and can be subscribed to by
the public. The issue of such borrowed capital should not exceed five times the
paid-up capital and reserve taken together. The maximum amount of reserve
that any State Financial corporation can hold is rupees ten lakhs.
Problems of State Financial Corporations

 Bad loans are prevalent in State Financial Corporations and are quite
common as in commercial banks and other financial institutions. The loans
are taken by small and medium industries who find it tough to repay the
loans which put the State Financial Corporations in a fix.
 The excessive focus on granting loans is also a problem of State Financial

Corporations. The small and medium firms are also in need of other
financial services that the corporations do not focus on.
 The leniency of the financial corporations to the larger firms is also very
common. This will lead to the lack of financial services for smaller firms,
which are actually in more need of funds.
 As the employees of the financial corporations are appointed by the

government via a general eligibility criterion, there is a dearth of
specialized technical staff. This leads to a lack of efficiency in the
implementation of policies and programs.
 One of the most important drawbacks of borrowing funds from the SFCs
is the high rate of interest charged by it. This high rate of interest
generally puts the small and medium entrepreneurs in a tough position.
 The rigorous procedures and formalities to gain a loan from an SFC is also
a huge hurdle for businessmen. People find it easier to borrow from
commercial banks and other financial institutions.

 The limited amount of resources that the SFCs possess is also a menace
when it comes to providing the necessary financial services. The SFCs are
constrained due to stringent laws curtailing them from acquiring extra
capital or even borrowings.
MSSIDC
OBJECTIVES OF MSSIDC
1. To aid, counsel, assist, finance and protect and promote the interests of
Small Industries in Maharashtra and in the Union Territory of Goa, Daman and
Diu, whether owned or funded by Government statutory body, company firm or
individuals and to provide them with capital, credit, means, resources and
technical and managerial assistance for the prosecution of their work and
business to enable them to develop and improve their methods of
manufacture, Management and marketing and their technique of production;
2. To enter into contracts with, and take up indents from, the

Government of India and State Government in the Union of India, corporations
and other subsidiaries and branches and from many agency or officer thereof
having the necessary powers, for fabrication, manufacture assembly and supply
of goods, materials, articles and equipment of every description and to arrange
for the performance of such contracts and indents by sub-contracting them to
or placing orders in respect thereof with, small industries or others for the
fabrication, manufacture, assembly or supply of such goods, materials, articles or
equipment or parts thereof, servicing or processing in connection therewith or
such Management services as may be necessary for the due performance of such
contracts and indents, and to have the goods, materials and equipment
fabricated, manufactured, assembled and supplied;
3. To take over or establish and administer industrial estate in the State of

Maharashtra and in the Union Territory of Goa, Daman and Diu;

4. To certify to the appropriate Government officers with respect to the

competency, as to capacity and credit, of any small industrial concern or group
of such concerns to perform any specific Government contract;
5. To grant or guarantee or recommend the grant of loans to Small Industries,

to which sub-contracts are given or orders are issued, as aforesaid, in order to
enable them, in carrying out the sub-contracts or orders, to finance plant
construction, conversion or expansion, including the acquisition of land, or to
finance the acquisition of equipment, facilities, machinery supplies or materials,
or to supply such concerns with working capital to be used in the manufacture
or articles, equipment supplies or materials under contract to Government or to
his company, to provide them with such financial, technical, managerial and other
assistance as may be deemed necessary for the purpose of enabling them to
execute and carry out the sub-contracts and orders satisfactorily and to
organize production and manufacture for meeting such contracts and sub-
contracts and orders adequately and according to specification, and to ensure
satisfactory production by all necessary instruction, assistance, inspection and
supervision;
6. To effect co-ordination between Large Industries and Small Industries by

suitable methods, enabling Small Industries to manufacture satisfactorily such
parts, accessories, ancillaries and components and other articles as may be
required by Large Industries;
7. To promote and operate schemes for development of Small Industries in the

State of Maharashtra and for that purpose to prepare and get prepared
reports, blue prints, statistics and other information;
8. To procure capital or financial assistance or accommodation for or provide

machinery equipment, technical and managerial assistance, information,
instruction, inspection, supervision and other facilities to any company , person
or association for the purpose of carrying into effect any of the aforesaid
objects;

9. To apply for, tender, purchase or otherwise acquire contracts and concessions

for, or in relation to the construction, execution, carrying out, equipment,
improvement, management, administrative or control of works and conveniences
and to undertake, execute, carry out, dispose of or otherwise turn to account
the same;
10. To manufacture, buy, sell, import, export, install work and generally
deal in any plant, machinery, substance, tools, materials, goods or things of any
description which in the opinion of the Company, may be conveniently dealt with
by the Company in connection with any of its objects;
11. To carry on any other trade or business (Whether manufacturing trading,

catering or otherwise) which may seem to the Company capable for being
conveniently carried out in connection with the above or calculated directly or
indirectly to enhance the value or tender profitably any of the
Company’s properties rights, activities and or to undertake Management of
Emporia in the State of Maharashtra or any other place and provided catering
or such other services necessary in the interest of business and of the Small
Scale industrial sector in general.
12. To apply for and take-out, purchase or otherwise acquire any trade mark,
patients, patent-rights, inventions, copyright, designs or secret processes which
may be useful for the Company’s objects and to grant license to use the same,
and to work, develop, carry out, exercise and turn to account the same;
13. To receive grants, loans, advances or other moneys on deposit or

otherwise, from the Central Government or State Government Banks,
Companies, Trusts or individuals with or without allowance of interest thereon;
14. To lend money to such persons or Companies and on such terms as may
seem expedient and in particular to customers and others having dealings with
the Company and to guarantee the performance of contracts by any such
persons or companies

Role and Importance MSSIDC

1. Employment generation: Small scale industries are one of the best sources of
employment generation in India. Employment is one of the most important
factors that determines the growth of a nation. Therefore, development of
small scale industries should be encouraged for the development of more
employment opportunities in the nation.
2. Less Capital Requirement: Small scale industries are less capital intensive than
the large scale industries. Capital is scarce in developing countries like India and
therefore, small scale industries are most suitable for maintaining the balance.
3. Use of resources and development of entrepreneurial skills: Small scale
industries allow for the development of entrepreneurial skills among the rural
population which is not having the scope of large scale industries. These
industries help in the appropriate use of the resources available in the rural
areas, which leads to development of rural areas.
4. Equal income distribution: Small scale industries by generating employment
opportunities create equal income opportunities for the youth of the
underdeveloped areas. This leads to the growth of the nation in terms of
employment, human development.
5. Maintains regional balance: It has been seen that large scale industries are
mostly concentrated in the large cities or restricted to areas which leads to
migration of people in search of employment to these cities. The result of such
a migration is overcrowding of the city and damage to the environment. For
sustaining a large population, more of natural resources need to be utilised.
6. Short production time: Small scale industries have a shorter production time
than the large scale industries which results in flow of money in the economy.
7. Supporting the large scale industries: Small scale industries help in the growth
of the large scale industries by producing ancillary products for the large
industries or producing small components that will be useful for the assembling
of final products by the large scale industries.

8. Improvement in Export: Small scale industries contribute to around 40% of

the total exports done by India, which forms a significant part of the revenue
earned from the exports. Small scale industries work towards increasing the forex
reserves of the country that reduces the load on balance of payment of the
country.
9. Reduce the dependence of agriculture: Most of the rural population will be
dependent on agriculture and this creates a burden on the agricultural sector.
Small scale industries by providing employment opportunities to the rural
population provides more avenues for growth and also paves way for a more
arranged distribution of occupation.
Small Industries Development Bank of India (SIDBI)

The government established SIDBI under a special Parliament Act as a subsidiary
of the IDBI. Now the SIDBI is an independent body of its own that focuses
mainly on the financing of the Small, Micro and Medium Enterprise (MSME)
Sectors of the economy. It now is responsible for the allocation of the Small
Industries Development Fund (which was the responsibility of the IDBI
previously).
SIDBI makes use of the current banking network to extend credit facilities to
the small business and micro industries sector. It provides direct financial
assistance to such banks and institutes which are passed over to the MSME
sector. It also provides indirect financial assistance via line of credit, refinancing
facilities, bills discounting, etc. It is a statutory body set up under an act of
the Indian Parliament in 1990.
Functions of SIDBI
When a private bank or institution provides loans or advances to small units
for business purposes, the SIDBI will refinance such loans.

SIDBI has arrangements with banks, government bodies other international

agencies, etc. to enable a holistic approach for the development of the MSME
sector.
 It will also discount or rediscount bills of such private institutions.
 SIDBI offers small-scale units with additional services like leasing, factoring,
etc.
 Ensures the timely flow of credit to make sure these small scale industries
always have adequate working capital.
 Provides assistance to the MSME sector to expand its market for their
products in both the domestic and the international market.
 It helps the small-scale industries modernize their technology for higher

efficiency and better products.
 Especially helps organizations such as Mahila Udyam Nidhi, National Equity

fund, etc. with initial capital, soft loans, advances, etc.
 Financially supports other organizations doing similar work. For example, it

provides financial assistance to SSI Development Corporations who then pass
on the assistance to the small units.
 Besides providing credit, SIDBI also provides these small scale industries with
support for development and promotion activities. They educate about
entrepreneurial development, responsible financing, environment protection,
energy efficiency. This we call as the Credit Plus Approach.
Small Industries Service Institutes (SISI)
The small industries service institutes (SISI’s) are set-up one in each state to
provide consultancy and training to small and prospective entrepreneurs. The
activities of SISs are co-ordinate by the industrial management training division

of the DC, SSI office (New Delhi). In all there are 28 SISI’s and 30 Branch
SISI’s set up in state capitals and other places all over the country.
SISI has wide spectrum of technological, management and administrative tasks to

perform.
Functions of SISI
1. To assist existing and prospective entrepreneurs through technical and

managerial counseling such as help in selecting the appropriate machinery and
equipment, adoption of recognized standards of testing, quality performance etc;
2. Conducting EDPs all over the country;
3. To advise the Central and State governments on policy matters relating to

small industry development;
4. To assist in testing of raw materials and products of SSIs, their inspection

and quality control;
5. To provide market information to the SISI’s;
6. To recommend SSI’s for financial assistance from financial institutions;
7. To enlist entrepreneurs for partition in Government stores purchase

programme;
8. Conduct economic and technical surveys and prepare techno-economic feasible

reports for selected areas and industries.
9. Identify the potential for ancillary development through sub-contract

exchanges;
10. Organize seminars, Workshops and Industries Clinics for the benefit of
entrepreneurs.

Maharashtra Centre for Entrepreneurship Development (MCED)
In all over India, there is Centre for Entrepreneurship Development Institutes

(CEDs)working in different state of country. These CEDs are working for
Entrepreneurship Development in their respective states. Maharashtra Centre for
Entrepreneurship Development
(MCED) is one of the CEDs in India working in the field of entrepreneurship

development since1988 and trained 14,50,703 participants up to 31st March
2018. Maharashtra Centre for Entrepreneurship Development is an autonomous
societyworkingunder Directorate of Industries, Government of Maharashtra. It is
an ISO 9001:2008 certifiedOrganization. MCED has been a pioneer in espousing
social & economic entrepreneurshipsince1988. It is a training institute in the
core area of entrepreneurship development. It worksasa facilitator & guide for
the creation & cultivation of the entrepreneurial spirit in the society.
Activity conducted by MCED



Pradhan Mantri Mudra Yojana (MUDRA)

Launched in April 2015 by the Prime Minister, the Mudra Yojana aims to enable
Micro Finance Institutions (MFIs), Non-Banking financial institutions/Companies
(NBFCs), Small Finance Banks, RBRs, Commercial Banks, Cooperative Banks, etc.
to provide Low Rate Loans to eligible entities.

Candidates can know the detailed information about the Pradhan Mantri Mudra
Yojana on the Official Website.
MMY Eligibility
To avail of the benefits of the PMMY Scheme, the person should be a citizen of
India. The loans are basically for people having a business plan in a Non-Farming
Sector with Income generating activities like the following:
 Manufacturing
 Processing
 Trade
 Service Sector
 Or any other fields whose credit demand is less than ₹10 lakhs.
The Indian Citizen seeking MUDRA Loans under the PMMY Scheme will have to
approach either an MFI, Bank or NBFC to avail it.
Objectives of Pradhan Mantri Mudra Yojana –
1. Funding the unfunded – To sanction loans up to rupees 10 Lakhs to

those who have a business plan to generate income from a non-farm
activity like manufacturing, processing, trading, or service sector but don’t
have enough capital to invest
2. Reducing jobless economic growth – To help generate sources of
employment and increase the overall GDP by providing micro-enterprises
with credit facilities.
3. Monitoring and regulating the Microfinance institutions (MFI) – With the
help of MUDRA bank, the network of microfinance institutions will be
monitored and new registration will also be done.

4. Integration of Informal economy into Formal sector – It will help India also
grow its tax base as incomes from the informal sector are non-taxed.
5. Promoting financial inclusion – PMMY further adds to the vision of
financial inclusion with the aim to reach the last mile credit delivery to
micro-businesses and taking the help of technology solutions.
Types of PMMY Loans

The Pradhan Mantri Mudra Yojana (PMMY) has three products as per the
funding requirements of the Beneficiary or the Entrepreneur.
Name of the Type of Coverage of the Loan

Loan
Shishu < ₹50,000
Kishor Above ₹50,000 up to ₹5,00,000
Tarun Above ₹5,00,000 up to ₹10,00,000
Functions of MUDRA Bank:

The MUDRA Bank will primarily perform the following functions in quest of its
objectives –
1. It will lay down policy guidelines for the micro and small enterprise (SME)
financing businesses.
2. Registration of Micro Finance Institutions (MFI) entities.
3. Regulation of the Micro Finance Institutions (MFI) entities
4. The MUDRA bank will provide accreditation and ratings of the MFI
entities

5. It will lay down the ‘responsible financing practices’ to ward off issues of
indebtedness and also ensure proper ‘client protection principles’ and
methods of recovery.
6. It will be responsible for development of standardised set of rules to
govern last mile lending to the micro and small enterprises.
7. MUDRA bank will be promoting right technology solutions for the last mile
lending.
8. It will also formulate and run a Credit Guarantee scheme to provide
guarantees to the loans which are being extended to the Small and micro
enterprises.
9. The MUDRA bank will create a good architecture for the Last Mile Credit
Delivery to micro business units under the scheme of Pradhan Mantri
Mudra Yojana.
Sectors Covered under PMMY

To maximize coverage of beneficiaries and tailor products to meet requirements
of specific business activities, sector/activity focused schemes would be rolled
out. To begin with, based on the higher concentration of businesses in certain
activities/sectors, schemes are proposed for:
Sector Comments Types of Activities under that Sector
Land Loans to support the  Auto-rickshaws, E- rickshaws, etc.

Transport purchase of transport  Passenger cars and taxis.
Sector vehicles. These vehicles  Small-goods transport vehicles.
could be used for goods  Other three-wheelers.
or personal transport.
Service This includes  Hair and beauty salons, beauty

Sector community services, parlours, etc.
social services, or  Tailoring stores, boutiques, dry

personal services. cleaning services, etc.

 Gymnasium, Athletic training,
medical shops, etc.
 Garage, Cycle & motorcycle repair
centres, etc.
 Other services like photocopying
shops, courier agencies, etc.
Food Support for small scale  Manufacturing papads, pickles,

Product food industries. jams/jellies, and other agricultural
Sector produce/preservation methods.
 Sweet shops, small service food
centres, etc.
 Everyday catering services, canteens,
etc.
 Micro cold storages, ice-making
factories, Cold chain vehicles, ice
cream making industries, etc.
 Bakeries and Baked products
manufacturing.
Textile Supporting micro  Handloom and power loom industry

Sector textile industries that  Handwork industry like embroidery,
produce garment and chikan work, dyeing and printing,
non-garment products. knitting, etc.
 Mechanical or computerized stitching
for garments and non-garments.
 Production of automobile and
furnishing accessories, etc.

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Unit VI - Project report and Role and Support of Government Institutions

The project report is a document prepared by experts that contains all

Project reports are important tools to both project teams and

Importance of Project Report:

 Project reports are an important source for managers and stakeholders, to

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Contents of a Project Report

A project report must provide information about the details of

A project report must state the objectives of the business and

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operations, methods of functioning and execution of the

The project report should indicate the organization structure

A brief description of the project must be stated and must

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 Projected production volumes, unit prices,

If the business is service oriented, then it must state the type

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6. Capital Structure and operating cost

The project report must describe the total capital requirements

The project report should state the following.

a) Business experience of the promoters of the business,

In order to judge the profitability of the business a projected

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the project report. It must show the estimated sales revenue,

Project report provides information about the technology and

10. Project Implementation

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11. Social responsibility

District industries Centre (DIC)

A District industries Centre is a district-level entity that assists in the

Role of District Industries Centres (DICs)

 DIC assists an entrepreneur in the DIC programs and guarantees continuous

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 DIC encourages the expansion and development of many manufacturing

Schemes Under the District Industries Centres (DICs)

Below is the list of DIC schemes:

 Prime Minister’s Employment Guarantee Program: This program started

jobs. The Entrepreneurship Introductory Program (Udyojakta Paricha

Eligibility Criteria For Applying for a Training Program Under the

 Candidates must be at least eighteen years old.

Maharashtra Industrial Development Corporation (MIDC)

Maharashtra Industrial Development Corporation (MIDC) is the nodal Investment

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Maharashtra State Financial Corporation

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Financial Capital (SFC) in detail.

1. Long Term Financial Assistance:

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2. Guarantee for Loans:

Working of (SFC) State Financial Corporations

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Problems of State Financial Corporations

 The excessive focus on granting loans is also a problem of State Financial

 As the employees of the financial corporations are appointed by the

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2. To enter into contracts with, and take up indents from, the

3. To take over or establish and administer industrial estate in the State of

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4. To certify to the appropriate Government officers with respect to the

5. To grant or guarantee or recommend the grant of loans to Small Industries,

6. To effect co-ordination between Large Industries and Small Industries by

7. To promote and operate schemes for development of Small Industries in the

8. To procure capital or financial assistance or accommodation for or provide

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