Institutional Support to

Entrepreneurship
Module 5

Compiled By Prof. Dipti Taleja

 District Industries Centers
 Established in 1978, District Industries Centers’ program was
initiated by central government to promote tiny, cottage,
village and Small Scale Industries (SSIs) in smaller towns and
their particular areas to make them available with all the basic
needs, services and facilities. DIC’s primary focus is to
generate employment in rural regions of India. District
Industries Centers are managed and operated at district level to
provide all the necessary support services to entrepreneurs or
first time business owners to start their own Micro Small and
Medium Enterprises (MSMEs). DICs also promote
Registration and Development of Industrial Cooperatives.

Compiled By Prof. Dipti Taleja

 Roles
 Arrangements for credit facilities, machinery & equipment
 Development and expansion of industrial clusters
 Identification of suitable schemes
 Recognizing and financially supporting new entrepreneurs
 Preparation of feasibility reports
 Providing financial support to small units
 Providing raw materials

Compiled By Prof. Dipti Taleja

 DICs allots sheds in Electrical & Electronic Industrial
Estates
 Provides clearance of licenses etc. through Single Window
Meeting
 Conducts Motivational Campaigns
 Helps in the distribution of Project profiles among
entrepreneurs
 Grants subsidies to Small Scale Industries (SSIs) units
 Implements Prime Minister’s Rozgar Yojana (PMRY)
 Provides marketing and raw material assistance via Small
Industries Development Corporation (SIDCO)
Compiled By Prof. Dipti Taleja
 Organizes Industrial Cooperative Societies
 Recommends Awards to SSI units and loan applications to
banks under KVIC Scheme
 Helps in Registration of Handicrafts/Cottage industries &
SSI units (Permanent/Provisional)
 Provides rehabilitation of sick SSI units
 Undertakes training programs for Entrepreneur
Development

Compiled By Prof. Dipti Taleja

Functions
 Loan Arrangement

 Undertakes Training Courses

 Machinery and Equipment

 Conducts Surveys

 Promoting rural artisans

Compiled By Prof. Dipti Taleja

 Directorate of Industries (DOI)

 Directorate of industries is the state level office

responsible for implementing the policies and
programmed for industrial development in the state.

Compiled By Prof. Dipti Taleja

 Objectives

 The primary function and objectives of the Directorate of

Industries are supervision and control of District Level
functionaries, i.e., the District Industries Centers in
implementation of the various schemes and programmed
of the Department.

Compiled By Prof. Dipti Taleja

 The basic objective of the Department is also to act as the
Nodal Promotional Agency in the development of
industries and industries activities in the State as a whole.
 And to promote and achieve the above-mentioned
purpose, the Department organizes and implements
various programmed and schemes to provide the basic
infrastructural facilities for the creation of industrial
awareness and atmosphere viz.,
 Investment Awareness Programmed
 Entrepreneurship Development Programmed
 Workshop and seminars etc.

Compiled By Prof. Dipti Taleja

 Besides, the Department also runs regular vocational
training courses for creation of skilled manpower in the
following trades: –
 Knitting
 Tailoring and Embroidery
 Carpentry and Furniture making
 Leather, Blacksmith and Fabrication
 Carpet Weaving

Compiled By Prof. Dipti Taleja

 To replacement the above purpose, regular sponsoring
with stipend is also offered to local youths for under-going
training and study courses both inside and outside the
State.
 To accelerate the pace of industrialization process,
infrastructure development and development of industrial
areas and estates are being given importance.
 Financial Assistance is made available to tiny/ cottage, to
large/ medium sector of industrial units in the form of
grants-in-aid to technical entrepreneurs to package scheme
of incentives and central transport subsidy.

Compiled By Prof. Dipti Taleja

SIDBI Small Industries Development Bank of India
 The SIDBI (Small Industries Development Bank of India) is
a wholly owned subsidiary of IDBI (Industrial Development
Bank of India), established under the special Act of the
Parliament 1988 which became operative from April 2, 1990.
 Besides focusing on the development of the Micro, Small
and Medium Enterprise sector, SIDBI also promotes cleaner
production and energy efficiency. SIDBI helps MSMEs in
acquiring the funds they require to grow, market, develop
and commercialize their technologies and innovative
products. The bank provides several schemes and also offers
financial services and products for meeting the individual’s
requirement of various businesses.

Compiled By Prof. Dipti Taleja

 1.Direct Finance
 SIDBI offers Working Capital Assistance, Term Loan Assistance,
Foreign Currency Loan, Support against Receivables, equity support,
Energy Saving scheme for the MSME sector, etc.
 2. Indirect Finance
 SIDBI offers indirect assistance by providing Refinance to PLIs
(Primary Lending Institutions), comprising of banks, State Level
Financial Institutions, etc. with an extensive branch network across the
country. The key objective of the refinancing scheme is to raise the
resource position of Primary Lending Institutions that would ultimately
enable the flow of credit to the MSME sector.
 3. Micro Finance
 Small Industries Development Bank of India offers microfinance to
small businessmen and entrepreneurs for establishing their business.

Compiled By Prof. Dipti Taleja

 Functions
1.Small Industries Development Bank of India refinances loans
that are extended by the PLIs to the small-scale industrial units
and also offers resources assistance to them

2. It discounts and rediscounts bills

3. It also helps in expanding marketing channels for the products

of SSI (Small Scale Industries) sector both in the domestic as
well as international markets

4. It offers services like factoring, leasing etc. to the industrial

concerns in the small-scale sector
Compiled By Prof. Dipti Taleja
 Functions
5. It promotes employment oriented industries particularly in
semi-urban areas for creating employment opportunities and thus
checking relocation of people to the urban areas

6. It also initiates steps for modernization and technological up-

gradation of current units

7. It also enables the timely flow of credit for working capital as

well as term loans to Small Scale Industries in cooperation with
commercial banks

8. It also co-promotes state level venture funds

Compiled By Prof. Dipti Taleja
 Benefits
1. Custom-made
 SIDBI policies loans as per the requirements of your businesses. If your
requirement doesn’t fall into the ordinary and usual category, Small Industries
Development Bank of India would assist funding you in the right way.

2. Dedicated Size
 Credit and loans are modified as per the size of the business. So, MSMEs
could avail different types of loans custom-made for suiting their business
requirement.

3. Attractive Interest Rates

 It has a tie-up with several banks and financial institutions world over and
could offer concessional interest rates. The SIDBI has tie-ups with World
Bank and the Japan International Cooperation Agency.

Compiled By Prof. Dipti Taleja

4. Assistance
 It not just give provides a loan, it also offers assistance
and much-required advice. It’s relationship managers
assist entrepreneurs in making the right decisions and
offering assistance till loan process ends.

5. Capital Growth
 Without tempering the ownership of a company, the
entrepreneurs could acquire adequate capital for meeting
their growth requirements.

Compiled By Prof. Dipti Taleja

6. Equity and Venture Funding
 It has a subsidiary known as SIDBI Venture Capital Limited which is
wholly owned that offers growth capital as equity through the venture
capital funds which focusses on MSMEs.

7. Subsidies
 SIDBI offers various schemes which have concessional interest rates and
comfortable terms. SIDBI has an in-depth knowledge and a wider
understanding of schemes and loans available and could help enterprises
in making the best decision for their businesses.

8. Transparency
 Its processes and the rate structure are transparent. There aren’t any
hidden charges.

Compiled By Prof. Dipti Taleja

 NSIC :National Small Industries Corporation

 NSIC (National Small Industries Corporation) is an ISO

certified Indian Government Enterprise under Micro,
Small and Medium Enterprises.  National Small Industries
Corporation is working to aid, foster and promote the
growth of MSMEs (micro, small and medium enterprises)
all across the country. NSIC operates all across the nation
through a network of Technical Centres and offices

Compiled By Prof. Dipti Taleja

Schemes of NSIC

 National Small Industries Corporation facilitates MSMEs

with specially tailored scheme to build and improve their
competitiveness. National Small Industries Corporation
provides complete integrated services under Finance,
Marketing, Technology and another allied Support
service.

Compiled By Prof. Dipti Taleja

 Functions
Marketing Support

 Marketing support has been considered as one of the most

important tools for the development of any business. It is
crucial for the survival and growth of Micro, Small and
Medium Enterprises in today’s intensely competitive
market.  National Small Industries Corporation devised
numerous of schemes to support enterprises (both
domestic and foreign markets) in their marketing efforts.
These schemes are briefly described as under:

Compiled By Prof. Dipti Taleja

Consortia and Tender Marketing

 Micro and Small Enterprises in their individual capacity encounter

several issues in order to procure & deliver large orders, which negate
them a level playing field vis-a’-vis large enterprises. National Small
Industries Corporation forms consortia of MSEs manufacturing the
same or similar product or products, thereby combining in their
capacity.

 National Small Industries Corporation applies the tenders on behalf of

single Micro and Small Enterprise/Consortia of Micro and Small
Enterprise for securing orders for them. Finally, these orders are
dispersed amongst Micro and Small Enterprises in tune with their
capacity of production.

Compiled By Prof. Dipti Taleja

Marketing Intelligence

 Disseminate and collect both international as well as

domestic marketing intelligence for the benefit of Micro
and Small Enterprises. This Marketing Intelligence cell,
apart from to spreading awareness about several schemes
for MSMEs, will maintain a database in detail and
distribute information.

Compiled By Prof. Dipti Taleja

Exhibitions and Technology Fairs

 To showcase the core competencies of Micro and Small

Enterprises in India and to capitalize market opportunities,
National Small Industries Corporation participates in
National and International Trade Fairs and Exhibitions
every year. National Small Industries Corporation
facilitates the participation of the MSEs by offering
concessions in rental etc. Participation in these national and
international events exposes Micro and Small Enterprises
units to international practices and improves their business
competencies and prowess.
Compiled By Prof. Dipti Taleja
Credit Support

 National Small Industries Corporation enables credit

requirements of MSEs in the following areas:

Compiled By Prof. Dipti Taleja

Financing for Raw Material Procurement

 The scheme framed by National Small Industries Corporation for

the assistance of Raw Material helps MSEs by way of financing the
procurement of Raw Material (both indigenous & imported). The
salient features are as follows:
 Bulk purchase of basic raw materials at competitive rates.
 Financial Assistance for Raw Materials procurement up to 90 days.
 National Small Industries Corporation facilitates import of scares
raw materials.
 National Small Industries Corporation takes overall care of all the
documentation, procedures and issuance of a letter of credit in case
of imports.
Compiled By Prof. Dipti Taleja
Financing for Marketing Activities

 National Small Industries Corporation provides assistance

in the financing of marketing actives such as Exports,
Internal Marketing and Bill Discounting.

Compiled By Prof. Dipti Taleja

Credit Rating Scheme and Performance for Small
Industries

 The need of Credit Rating Mechanism and Performance

appraisal for MSMEs was highlighted in Union
Budget’04-05. A scheme for MSMEs has been drafted in
consultation with Rating Agencies and  IBA (Indian
Banks’ Association). National Small Industries
Corporation has been appointed the nodal agency for
implementation of this scheme through impanelled
agencies.

Compiled By Prof. Dipti Taleja

Benefits of Performance and Credit Rating

 Availability of credit at attractive interest rates

 A trusted, independent third party opinion on credit-worthiness
and capabilities of Micro and Small Enterprises
 Prompt sanctions of Credit from Banks and Financial Institutions
 Recognition in global trade
 Facilitate buyers/vendors in capacity and capability assessment of
MSMEs
 Subsidized rating fee structure for Micro and Small Enterprises
 Enable MSMEs to ascertain the strengths and weaknesses of their
existing operations and take corrective measures.

Compiled By Prof. Dipti Taleja

Technology Support

 NSIC offers small enterprises the following support

services through its Technical Services Centers.
 Material testing facilities through accredited laboratories
 Advise on application of new techniques
 Energy and environment services at selected centres
 Classroom and practical training for skill upgrading

Compiled By Prof. Dipti Taleja