Institutional Finance To Entrepreneurs

Entrepreneurship Management

Institutional Assistance to SSI • Industrial Finance Corporation of India (IFCI) • Industrial Credit and Investment Corporation of India (ICICI) • Industrial Development Bank of India (IDBI) • Maharashtra State Financial Corporation (MSFC) • State Industrial and Investment Corporation of Maharashtra Limited (SIICOM) • Maharashtra Small scale Industries Development Corporation Ltd (MSSIDC) • National Small Industries Corporation (NSIC) • District Industrial Centres (DIC) • Technical Consultancy Organisations (TCO)

Entrepreneurship Management

Industrial Finance Corporation of India (IFCI) •

Established on July 1, 1948 to cater to the long-term finance needs of the industrial sector

•

Until the establishment of ICICI in 1956 and IDBI in 1964, IFCI remained solely responsible for implementation of the government’s industrial policy initiatives

•

Some sectors that have directly benefited from IFCI’s disbursals include: Consumer goods industry (textiles, paper, sugar) Service industries (hotels, hospitals) Basic industries (iron & steel, fertilizers, basic chemicals, cement) Capital & intermediate goods industries (electronics, synthetic fibers, synthetic, plastics, miscellaneous chemicals) – Infrastructure (power generation, telecom services) – – – –

•

IFCI has sanctioned financial assistance of Rs 462 billion to 5707 concerns

•

IFCI has promoted Technical Consultancy Organizations (TCOs)

Entrepreneurship Management

Industrial Credit and Investment Corporation of India (ICICI) • Incorporated in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry • Objective of creating a development financial institution for providing medium-term and long-term project financing • ICICI Bank, ICICI Venture, ICICI Securities Limited (i-SEC), ICICI Prudential Life Insurance Company, ICICI Lombard General Insurance Company Limited • Activities: – Underwriting of shares, bonds, stocks – Provision of loans in foreign currency to pay for imported equipment

Entrepreneurship Management

Industrial Development Bank of India (IDBI) • Incorporated in 1964 • National Stock Exchange of India (NSE), National Securities Depository Services Ltd. (NSDL), Stock Holding Corporation of India (SHCIL) are built by IDBI • Services offered: – – – – – –

Loans against securities Underwriting Loans for modernisation, renovation Assist financial institution by subscription to shares, bonds Direct financing of exports Refinancing industrial loans granted by banks, financial institutions

Entrepreneurship Management

Maharashtra State Financial Corporation (MSFC) • Established in 1953 as Bombay State Finance Corporation • Operational in Maharashtra since 1962 • Provides term loan assistance to Small and Medium scale industries • Activities: – Major share in small scale units – Encouragement to first generation entrepreneurs – Dispersal of industries/service units to the backward and developing areas – Total sanction: Rs. 3688 crores including term loans of Rs. 3414 crores

Entrepreneurship Management

State Industrial and Investment Corporation of Maharashtra Limited (SIICOM) • Established in 1966, 100% state owned company • Objective of industrialising the backward areas of the State of Maharashtra • Extended long term finance of more than Rs. 4,000 crores to over 3,000 units • Activities include advising on: – – – – – –

Project Identification/Location Govt. Clearances Assistance in Legal Documentation Arranging for infrastructure Merchant Banking Equipment Leasing

Entrepreneurship Management

Maharashtra Small scale Industries Development corporation Limited (MSSIDC) • Established in 1962

• Initially, conceived as an agency for supply of raw materials to SSI units and also to extend marketing assistance to these units in selling their products • Provides services like – Marketing Assistance, Raw Materials availability, Commercial warehousing, Exports (making export quota available, assistance in packing credit, documentation, shipping etc) and Handicrafts • MSSIDC started with a share capital of Rs. 10 lakhs in 1963-64 and its turnover was Rs.86.57 lakhs • Today, paid up capital is 9.13 crores

Entrepreneurship Management

National Small Industries Corporation (NSIC) • Establishment in 1955 • Services include: – Marketing support (Exhibitions and Technology Fairs, Buyerseller meets, export of products) – Credit support (Financing for procurement of Raw Material, financing for marketing activities) – Technology support (Advising on application of new techniques, material testing facilities, common facility support, classroom and practical training for skill up gradation) – Small Enterprise Establishment Programme (SEEP) – Insurance of Export Credit for Micro and Small Enterprises

Entrepreneurship Management

District Industrial Centres (DIC) • Objective - provide a focal point for the promotion of SSI, provide service and support to the decentralized industries under a single roof at pre investment, investment and post investment stage • Initiated from 1st May 1978 • Main activities/functions of the Public authority: – – – – – – – – – –

Registration of SSI Census of SSI Financing of SSI through banks Provision of industrial estates Implementation of Industrial Policy Subsidies to SSI Technical assistance Matters relating to KVIC Trade fairs, exhibition, awareness programme Training

Entrepreneurship Management

Technical Consultancy Organisations (TCO) • Set up by IDBI, IFCI and ICICI, state level financial institutions and commercial banks • Services: – Consultants to individual entrepreneurs, government agencies, commercial banks in task of industrial development – Project Consultancy (Identify industrial potential through research, feasibility reports, pre investment studies, providing assistance to potential entrepreneurs) – Management consultancy (Project supervision, technical and administrative assistance, rehabilitation of sick units) – Market consultancy ( Market research and surveys for specific products) – Export consultancy (Assistance to export oriented projects for modern technology)