Role of other Supporting Institutions, Entrepreneurship Development II Notes

Entrepreneurship Development II

Unit – III: Role of other Supporting Institutions

Industrial Development Bank of India (IDBI)

The full form of IDBI is Industrial Development Bank of India. It was established in July, 1964. However, in February 1976, the IDBI was taken over by the government and was made an autonomous institution. It was established with the object of recognizing and integrating the structure of the existing financial institution in the country for gearing up the needs of rapid industrialization.

Features of IDBI:

It provides direct loans to the industrial concerns;
Extending refinancing facilities for industrial and export credit.
Subscribing to and underwriting of the shares, bonds and debentures of the industrial concerns.
Acceptance, discounting and rediscounting the commercial bills of the industrial concerns;

The objectives of IDBI are:

Planning, promoting and developing industries to fill the gaps in the industrial structure in India.
Providing technical and administrative assistance for promotion etc.

The functions of IDBI are:

It renders technical, managerial and administrative assistance for promotion, management and expansion of industry.
It provides financing facilities to IFCI, SFC and other financial institutions approved by the Government.
It co-ordinates the activities of other financial institutions for the promotion and development of industries.
By purchasing and / or underwriting shares and debentures of industrial concerns it provides capital.
It also provides guarantee for deferred payments due from industrial concerns and for loans raised by them.

Small Industries Development Bank of India (SIDBI)

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.

SIDBI was made responsible for administering Small Industries Development Fund and National Equity Fund that were administered by IDBI before. SIDBI is the Primary Financial Institution for promoting, developing and financing MSME (Micro, Small and Medium Enterprise) sector. Besides focussing 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.

Functions of SIDBI

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.
It discounts and rediscounts bills.
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.
It offers services like factoring, leasing etc. to the industrial concerns in the small-scale sector.
It promotes employment-oriented industries particularly in semi-urban areas for creating employment opportunities and thus checking the relocation of people to the urban areas.
It also initiates steps for modernisation and technological up-gradation of current units.
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.
It also co-promotes state-level venture funds.

SIDBI Support’s towards the North-Eastern Region of India

The SIDBI accords special importance towards the development of North Eastern Region of India in terms of Micro-Finance, Rural Industrialization Programme (RIP), Entrepreneurship Development, Marketing Support, and Financial Support to Micro-Enterprises, etc. A dedicated Cell for Development of North Eastern Region (DONER Cell) has been created by the SIDBI at Guwahati identifying potential business opportunities in the North Eastern Region of the country. The Cell works in close co-ordination with other development agencies bring about a visible impact on the lives of the poor masses in the region. A brief highlight of the SIDBI’s initiatives in the NER is given below:

Granting credit to Micro and Small Enterprises (MSEs) in the region a priority basis. Till 2008 March-end, an amount of Rs. 3.02 billion was disbursed benefitting close to 15000 MSES.
Under the Micro-Credit scheme the SIDBI sanctioned term loans of over Rs.430 million to various NGOs/MFIs benefitting more than 90000 mostly women in the region.
The SIDBI has nurtured and developed 11 MFIs in the Region through various capacity building measures.
Under its various promotional and developmental programmes in the North Eastern Region, the SIDBI has supported Rural Industries Programme in 18 districts, helping in promoting more than 900 units. Similarly, SIDBI has supported around 350 EDPs benefitting over 12000 participants and over 80 Start ups benefitting over 3600 participants in the entire region.
The SIDBI has also intervened in 18 clusters benefitting over 140 beneficiaries in the region covering activities relating to handloom weaving cane and bamboo mat weaving, carpet weaving, agarbatti making, muga silk, blacksmith, shoe making, terracotta pottery, brass & bell metal products, etc.
The SIDBI has also supported various vocational training programmes and marketing, seminars/ exhibitions covering over 3500 participants from the MSME sector in the North Eastern Region of India.
Published Compendium of 100 project profiles for tiny/ micro enterprises in the region.

With a view to according focused attention to the N.E. Region, the SIDBI has two financial schemes as:

(a) Micro and Small Enterprises Fund for North Eastern Region and Sikkim with an initial corpus of Rs. 100 million under which, the SIDBI jointly with banks, provide assistance to Micro & Small Enterprises (MSEs) in the region up to Rs. 5 million under Credit Guarantee Fund Trust for Micro & Small Enterprises(CGTMSE). The SIDBI shares 25% of the loan requirements assessed by public sector banks (PSBs) based on the appraisal done by the banks and other terms and conditions decided by PSBs.

(b) To mitigate the problems faced by MSEs in the North Eastern Region, the SIDBI introduced the “Small Loan Scheme for North Eastern Region”, under which assistance up to Rs.0.2 million is made available at concessional terms. Based on the success of the scheme, select branches of the SIDBI now consider the proposals up to Rs. 1 million.

Entrepreneurship Development II Chapterwise Notes

NORTH EASTERN DEVELOPMENT FINANCE CORPORATION (NEDFi)

The North Eastern Development Finance Corporation Ltd (NEDFi) is a Public Limited Company registered under the Companies Act 1956 on 9^th August, 1995. It is notified as a Public Financial Institution under Section 4A of the said Act and was registered as an NBFC in 2002 with RBI. The shareholders of the Corporation are IDBI, SBI, LICI, SIDBI, ICICI, IFCI, SUUTI, GIC and its subsidiaries. The management of NEDFi has been entrusted upon the Board of Directors comprising representatives from shareholder institutions, DoNER, State Governments and eminent persons from the NE Region and outside having wide experience in industry, economics, finance and management.

NEDFi provides financial assistance to micro, small, medium and large enterprises for setting up industrial, infrastructure and agro-allied projects in the North Eastern Region of India and also Microfinance through MFI/NGOs. Besides financing, the Corporation offers Consultancy & Advisory services to the state Governments, private sectors and other agencies. NEDFi conduct sector or state specific studies under its Techno-Economic Development Fund (TEDF) and is the designated nodal agency for disbursal of Govt. of India incentives to the industries in the North-East India under North–East Industrial and Investment Promotion Policy 2007 (NEIIPP 2007).

Objectives: The main objective of NEDFi is to provide finance and other facilities for promotion, expansion and modernization of industrial and infrastructure projects in the NE-region.

Functions: The NEDFi aims to be a dynamic and responsive organization catalyzing the economic development of the North East India. It assists in the efficient formation of fixed assets by identifying and nurturing eco-friendly and commercially viable industrial and infrastructure projects in the region. Thus, the NEDFi prime role is to enhance the wealth of the region and prosperity of its people. The major functions of the NEDFi are as follows:

To provide financial assistance to MSMEs for setting up industrial units, infrastructure and agro-allied projects in the North Eastern Region of India.
To extend Micro-Finance to Non-Government Organizations (NGOs) and voluntary Agencies (Vas) with good track-records for on-lending to the needy who can take up income generating activities for self-employment.
To offer Consultancy and Advisory services to the state Governments private sectors and other agencies.
To conduct state specific studies under the state’s Techno-Economic Development Fund (TEDF).
To serve as a designated nodal agency for disbursement of the Government of India’s incentives to industries in the N.E. Region under the “North East Industrial and Investment Promotion Policy (NEIIPP) 2007” and also under the “Prime Minister’s Employment Generation Programme (PMEGP)” scheme.
In addition to the above, the NEDFi takes up promotional activities which include NEDFi Haat, NEDFi Convention Centre, NEDFi Pavilion, etc.

MICRO FINANCE SCHEMES OF THE NEDFI

The NEDFi finances a wide spectrum of activities which include agro-processing, mining, shipping, leasing, transport, tourism, information technology, medical & health services generation and distribution of electricity, setting up and development of industrial estates and other commercially viable infrastructure facilities. Some important financing schemes of the NEDFi are highlighted below:

Rupee Term Loan Scheme (RTL): The scheme aims to provide medium and long term financial assistance for setting up of new projects, expansion, diversification or modernization of existing projects in various manufacturing or services sector.
Equipment Finance Scheme: The scheme grants financial assistance for acquiring specific machinery/equipment by financially sound and profit making companies having good credit record.
Corporate Finance Scheme: the objective of the scheme is to provide finance to meet normal capital expenditure, working capital margin, shortfall in working capital, payment of high cost debt and also for meeting the general corporate purpose like funding of business acquisition, or for brand building, etc. where no tangible asset creation may be envisaged.
Working Capital Term Loan Scheme: The aim of the scheme is to provide one-time core working capital assistance to deserving units in the form of working capital term loan.

NORTH EASTERN INDUSTRIAL AND TECHNICAL CONSULTANCY ORGANIZATION LIMITED (NEITCO)

The North Eastern Industrial and Technical Consultancy Organization Limited (NEITCO) is a premier consultancy organization setup in 1973 by the all India financial institutions, nationalized banks and state development corporations under the aegis of the Industrial Development Bank of India (IDBI) to cater to the consultancy needs of the north eastern states of India. The co-promoters are ICICI, IFCI, IIBI, SBI, UCO BANK, UBI, AIDC, MIDC and APIDFC. The NEITCO pioneer in systematic entrepreneurship development movement in the entire North Eastern Region, has been organizing and conducting Entrepreneurship Development Programmes (EDPs) in the region since 1982 under the sponsorship of North Eastern Council (NEC), IDBI, SIDBI, IFCI, ICICI, NABARD, SBI, Department of Science and Technology, Govt. of India and state Governments of North Eastern Region. The organization operates from its head office at Guwahati in addition to branch offices at Shillong and Itanagar.

Functions: The NEITCO performs the following functions ‘to provide the quality, cost effective and timely services’ to its clients.

Consultancy Service: the consultancy services of the NEITCO are of the following types:
Technical and management consultancy services to the entrepreneurs for developing project profiles of numerous types of industries based on cement, textiles, food processing, chemicals engineering, etc.
It carries out Market Surveys, Diagnostic / Rehabilitation studies of sick industrial units.
Evaluation-cum-impact studies, Industrial potential Surveys and several specialized studies on specific sector.
Project Implementation: The Project Division of the NEITCO implements new industrial projects in addition to working for expansion of the existing projects. In doing so, it arranges for technical know-how and other technical, economic and managerial aspects.
Entrepreneurship Development: The NEITCO is the pioneer in systemic Entrepreneurship Development Programme Movement in the North Eastern Region and has since conducted a large number of Entrepreneurship Development Programmes (EDPs). It also collaborates and develops networks with lending institutions in the country for a vibrant learning environment.
Rural Development: The NEITCO also works to promote self-employment in rural areas through a number of Vocational Training Programmes / Skill Development Programmes with the help of the Department of Science and Technology, Government of India.

Indian Institute of Entrepreneurship (IIE)

Indian Institute of Entrepreneurship (IIE) is an autonomous organization under the Ministry of Skill Development & Entrepreneurship. The main aim of the Institute is to provide training, research and consultancy activities in Small and Micro Enterprises (SME), with special focus on entrepreneurship development. The Indian Institute of Entrepreneurship (IIE) registered under the Societies Registration Act,1860 was established in the year 1993 in Guwahati by the erstwhile Ministry of Industry (now the Ministry of Micro, Small and Medium Enterprises), Government of India. The Institute began operating from April 1994 with the North East Council (NEC), Governments of Assam, Arunachal Pradesh and Nagaland and SIDBI as its other stakeholders. IIE has been transferred to the Ministry of Skill Development & Entrepreneurship on 22nd May’2015. The headquarter of IIE is situated in Guwahati.

OBJECTIVES OF IIE

To promote and develop entrepreneurship.
To conduct research and provide consultancy for entrepreneurship development.
To coordinate and collaborate with other organizations in undertaking training, research and other activities to increase outreach of the institute.
To provide consultancy and monitoring service to MSMEs/ potential entrepreneurs and enhancing employability of participants.
To promote greater use of information technology in the activities/ functions of the IIE.
To comply with statutory responsibility.

FUNCTIONS OF IIE

Designing and organising training activities for different target group and undertaking research in the relevant to entrepreneurship.
Improving the efficiency, effectiveness and delivery of the change agents and development practitioners i.e. trainers, support organizations engaged in enterprise building. etc.

Indian Institute of Entrepreneurship (IIE) – Guwahati

The Indian Institute of Entrepreneurship (IIE) was established in the year 1993 in Guwahati by the erstwhile Ministry of Industry (now the Ministry of Micro, Small and Medium Enterprises), Government of India as an autonomous national institute with an aim to undertake training, research and consultancy activities in small and micro enterprises focusing on entrepreneurship development.

The institute began operating from April 1994 with the North East Council (NEC), Governments of Assam, Arunachal Pradesh and Nagaland and SIDBI as its other stakeholders. It is also An ISO 9001:2008 Certified Organisation.

Objectives:

To promote and develop entrepreneurship.
To conduct research and provide consultancy for entrepreneurship development.
To coordinate and collaborate with other organizations in undertaking training, research and other activities to increase outreach of the institute.
To provide consultancy and monitoring service to MSMEs/ potential entrepreneurs and enhancing employability of participants.
To promote greater use of information technology in the activities/ functions of the IIE.
To comply with statutory responsibility.

Functions:

Designing and organising training activities for different target group and undertaking research in the relevant to entrepreneurship.
Improving the efficiency, effectiveness and delivery of the change agents and development practitioners i.e. trainers, support organizations engaged in enterprise building. etc.
Provide consultancy service to the prospective and existing entrepreneurs.
Increasing the outreach of activities of the institute through collaborative activities and increasing their effectiveness through use of different tools of information technology.

Collaborations: Indian Institute of Entrepreneurship (IIE) signed a Memorandum of Understanding, signed initially for three years, with Arunachal University of Studies, Namsai, Arunachal Pradesh on 5th March, 2014 at IIE campus, Guwahati, Assam to promote and develop entrepreneurial environment. The Arunachal University of Studies is authorised to establish and approve new Skill Knowledge Providers (SKP) for facilitating joint certification with IIE.

NATIONAL SMALL INDUSTRIES CORPORATION (NSIC)

The National Small Industries Corporation (NSIC) was set up by the Government of India in 1955 with the aim of promoting, aiding and fostering the growth and development of the MSMEs in the country. Over a period of close to six decades of transition, growth and development, the NSIC has proved its strength within the country and abroad by promoting modernization, up gradation of technology, quality consciousness, strengthening linkages with large and medium enterprises and enhancing export-projects and products from small industries. The NSIC operates through country wide network of 123 offices and Technical Centres. In addition to this, The NSIC has 48 Training cum-Incubation Centres with a large professional manpower; the NSIC provides a package of services as per the need of MSME sector.

NSIC IN THE NORTH – EAST INDIA

The present North Eastern Region of India comprises of eight states including Sikkim. The abundance of natural resources like cane, bamboo, silk and cotton has yielded a fine heritage of handicrafts and handloom products of daily use. From the ancient times these products have catered the rather than commercial uses.

Apart from other activities, the NSIC undertakes the task of promoting and marketing of these unique products in the country and abroad through its strong network in and around the country as well as abroad, by imparting training to the traditional artisans to improve their technology and productivity and subsequently displaying the products by organizing / participating in different trade fairs and exhibitions.

To create awareness amongst the unemployed youths and budding entrepreneurs of the North East, the NSIC imparts need based training both within and outside the region from time-to-time. The training programmes include the trades like TV & Mobile Repairing, Computer Hardware Maintenance, Electrical Goods Repairing, Leather Footwear, Machinist, Two-wheeler & Four-wheeler Repairing, Fashion technology, Beautician Programme, Electrician, Export Linkage and Export Management, Food Processing Technology, Hospitality and Tourism Management, Catering and Banking Technology, and Advance Welding.

Short Note – Mahila Udyam Nidhi

The Small Industries Development Bank of India (SIDBI) implements this scheme exclusively for women to provide equity supports to the women entrepreneurs. Loans and grants are extended to accredited NGOs for creation of training and other infrastructural facilities for women entrepreneurs.

Objective: To overcome capital deficiency of women entrepreneurs.

Eligibility:

Women entrepreneurs who are setting up new projects in Micro/Small Enterprises Sector.
Those women entrepreneurs involved in the rehabilitation of viable sick units.
Existing Micro/ Small Manufacturing and Service Enterprises taking up expansion and modernization programme.
The scheme is operated through State Finance Corporations (SFCs)/ Scheduled Commercial Banks/ Scheduled Urban Co-operative Banks.

Short Note – Mahila Vikash Nidhi

It is another initiative taken by the SIDBI to encourage women entrepreneurship. Under this scheme, the SIDBI extends development assistance to women to pursue income generating activities. It is a specially designed fund to support economic development of women, especially in the rural areas by providing them avenues for training and employment opportunities.

Under the scheme of assistance, a judicious mix of loan and grant is extended to accredited NGOs for creation of training and other infrastructural facilities. In addition to this, activities like vocational training, strengthening of marketing setup for the products marketing of the beneficiary groups, arrangement for supply of improved inputs, production and technology improvement are also covered under the Mahila Vikash Nidhi scheme.