Financial institution

Financial Institution

1. Financial Institution FUNDING Entrepreneurs Revathy Rajasekaran Coordinator, Edc V.V.Vanniaperumal College for Women Virudhunagar V.V.Vanniaperumal College For Women

2. TIIC- TaMILnadu Industrial investment corporation V.V.Vanniaperumal College For Women

3. TaMILnadu Industrial investment corporation TIIC was established in 1949 and function as full fledged SFC. It provides financial assistance to tiny, small, medium industrial units for acquiring fixed asset. The assistance is given for expansion, diversification and modernization. V.V.Vanniaperumal College For Women

4. Schemes of financial assistance 1.General scheme: This scheme is for financial assistance for new projects or expand existing projects. The loan is for purchase of land, construction of building and purchase of machinery. Interest rate is 15%p.a –loan upto 25 lakh Interest rate is 15.25 % p.a –loan above 25 lakh Repayable before 7 years Initial Moratorium – 2 years V.V.Vanniaperumal College For Women

5. 2.Soft loans- meant for qualified entrepreneurs who are unable to bring promoters contribution. The assistance will be maximum 20% of project cost to a maximum of Rs.4 lakh The repayment period is 5 years Interest is 1% p.a. 3.Single window scheme- This scheme is a composite of fixed capital & working capital Maximum loan-200 lakhs Repayment period-5 yrs(working capital), 5-7 yrs(term loans) Repayment holiday-1 yrs(working capital), 6 months -2 yrs(term loans) V.V.Vanniaperumal College For Women

6. 4.Assistance for acquiring ISO 9000- this is to promote quality management system and strengthening export potentials. Company with good financial records are eligible. Expenses on consultancy, audit, certification fees are considered for loan determination. 5.Marketing assistance scheme- to assist SSI in marketing products. Company with profit of 3 yrs are eligible to undertake loan for expense on marketing research, advertising, branding, participating in trade fair etc… Loan repayment period- 8 quarterly installments with 1 year holiday period. V.V.Vanniaperumal College For Women

7. 6.Generator Scheme- for purchase of generator sets to enable industrial units to meet power shortage. The loan amount is need based with promoter contribution of 22.5%. Repayable in 7 years, holiday period is 6 months. Government gives subsidy of 15%. 7.Leasing Scheme- to provide assistance to purchase machine on lease rentals. The assistance is from 5 lakhs to 80 lakhs V.V.Vanniaperumal College For Women

8. 8.Factoring scheme- To solve the working capital problem of SSI by discounting bills raised by units on suppliers The assistance is from 5 lakh to 100 lakhs Interest rate -10%; Maximum credit period-90 days 9.National Equity Fund- to provide equity support to small entrepreneurs in establishing new projects or expanding existing projects Promoter contribution is 10% of the project cost The maximum loan amount is 50 lakh Repayment period: 7 to 9 yrs including holiday period 2 yrs V.V.Vanniaperumal College For Women

9. 10. Mahila Udayama Nidhi : to provide equity assistance to women entrepreneur for setting up/ expanding projects with cost of 10lakhs. Promotor contribution is 10% Soft loan maximum of 25% Repayment period- 9 yrs; Initial moratorium -2 yrs 11. Technology development & modernization of SSI- for units to undertake technology improvement Maximum assistance is 100 lakh Interest rate-13% Repayment period- 5 yrs; Initial moratorium-6 months V.V.Vanniaperumal College For Women

10. 12. Working capital Assistance- to provide working capital assistance for SSI promoted by TIIC/SIPCOT with good track record of profit. Minimum of 10 lakhs and maximum of 100 lakhs Interest rate-15.5 p.a % Repayment period is 1 year V.V.Vanniaperumal College For Women

11. SIDCo - Small industries Development organization V.V.Vanniaperumal College For Women

12. SIDCo In tamilnadu SIDCO was setup in 1970 for promotion of small scale industries in the state. 1.Formation of Industrial estate- SIDCO is constructing industrial worksheds with all infrastructural facility including roads, lights, water supply, drainage, power supply etc. SIDCO constructed 1841 tiny sheds in 108 location for rural artisans and unemployed youth It also counseling, aiding and assisting the formation of private industrial estate V.V.Vanniaperumal College For Women

13. 2.Marketing Assistance: SIDCO participate in the government tenders on behalf of SSI and obtain order for them. It arranges buyer-seller meet to make government aware of SSI product 3.Hire purchase & equipment leasing scheme- SIDCO assist for SSI for supply of machinery under hire purchase and lease. V.V.Vanniaperumal College For Women

14. 4.Export House- SIDCO identifies potential SSI supplying export worthy products & prospective buyers of the product abroad. It participates in industrial fairs and exhibits the products of SSI 5.Industrial Developments in backward areas: To promote industries in backward areas and provide employment to rural educated unemployment youths SIDCO constructs industrial estate in rural areas It also constructs exclusive estate for women also V.V.Vanniaperumal College For Women

15. DIC- District Industries centre V.V.Vanniaperumal College For Women

16. DIC-District industrial centre DIC was started in the year in 1978 for development of small & cottage industries in India. DIC is set up in headquarters of each district DIC provides under single roof all services of assistance, financing, training, technical advice to small & village entrepreneurs. There are 422 DIC operating in country V.V.Vanniaperumal College For Women

17. Structure of DIC DIC consist of One general manager Four functional managers Economic & Investigation Credit Village Industries Raw material/Marketing/Training Three project manager- to provide technical services V.V.Vanniaperumal College For Women

18. Function of DIC Motivation Campaigns: M otivates and identify potential entrepreneur through campaigns. Surveys: Conducts surveys to assess industrial potential in availability of raw materials, human skills, infrastructure & demand. It prepares techno economic studies & provides investment advice to entrepreneurs. Action plans: DIC prepares action plan for industrial developments. It coordinates with lead bank & District credit plans V.V.Vanniaperumal College For Women

19. 4.Registration: DIC provides provisional & permanent registration to new entrepreneur. Provisional registration: This is done to bring new unit into existence. It is awarded for 2 years and renewed every year and renewal limited to 2 years only. It enables Apply to municipality to construct buildings Apply plot in industrial estate Apply power connection Apply financial assistance Apply for buying machines Apply for sales tax registration V.V.Vanniaperumal College For Women

20. Permanent Registration: Permanent registration is done for only one time It enables the company to Apply for scarce raw material on concessional rates Apply for marketing through government agencies V.V.Vanniaperumal College For Women

21. 5.Help to obtain Credit: DIC recommends loan application to banks & financial institution and help SSI to obtain credit 6.Guidance: provides guidance to entrepreneurs in identifing appropriate machinery and its supply, raw material requirements source & supply, purchase of scarce raw materials. 7.Recommending application to organization: DIC helps the entrepreneurs in getting power connection V.V.Vanniaperumal College For Women

22. 8.Marketing Assistance: DIC collects marketing information, give export information, liaison with govt. procurement agencies and suggest marketing agencies 9.Training: It conduct training programmes for entrepreneurs and indentifies opportunities. 10Entrepreneur Development programme : DIC conduct EDP in association with SISI and TCO to develop entrepreneurial skills 11.Fairs & Exhibition: DIC encourages SSI to participate in International trade fair V.V.Vanniaperumal College For Women

23. SISI- small industries service institution V.V.Vanniaperumal College For Women

24. SISI- small industries service institution The SISI is setup to provide consultancy & training to small entrepreneur. There are 28 SISI in India. Functions of SISI: Technical Advisory Service: Technical advice for setting up SSI, choice of machinery design, layout. Preparation of design and drawings for production equipment to increase production Technical guidance on efficient use of raw material, utilization of substitute, waste and scrap Development of new product V.V.Vanniaperumal College For Women

25. 2.Workshop & Laboratory Service: SISI has workshop, lab, showrooms attached to them. They provide common service & tool room facility. Carry experiments and lab analysis on new raw materials Assist in testing raw materials & new products 3.Management consultant service: SISI guide in proper industrial management, including cost reduction, production & marketing. 4.Training Workers, foreman & Managers: They train workers from SSI in machine shop practice, tool and die making, welding, electroplating and wood working. V.V.Vanniaperumal College For Women

26. 5.Promotion of Entrepreneurship in rural & underdeveloped area: SISI organizes training programme for engineers, graduates, students, ex-servicemen and people from backward, tribal, rural. 6.Economic Service: Conducting surveys of particular industries and areas & recommendations for development programmes . Supplying market information Undertaking industrial survey V.V.Vanniaperumal College For Women

27. Nsic - National small industries corporation V.V.Vanniaperumal College For Women

28. Nsic - National small industries corporation NSIC is set up in 1955 to promote growth of SSI in the country. Function of NSIC To develop small scale units as amcillary unit of large scale industries. To Supply of machines on hire purchase To assist SSI in marketing facility To assist small enterprise in participate in stores purchase program of central govt. To distribute raw materials through depot V.V.Vanniaperumal College For Women

29. To import & distribute components & parts to SSI To construct industrial estate and establish training centres To develop SSI in other countries like turnkey projects. They organize various domestic/ international industrial fair, buyer-seller meets Creating awareness about performance & credit rating scheme for small industries V.V.Vanniaperumal College For Women

30. SIPCOT- state industries promotion corporation of Tamilnadu V.V.Vanniaperumal College For Women

31. SIPCOT- state industries promotion corporation of Tamilnadu SIPCOT was setup in 1971 as a public limited company owned by tamilnadu . The objective of promoting & developing medium & major industries in backward & underdeveloped areas. It activity includes Provision of finacancial assistance on liberal terms to medium & major industries Implement a package scheme of incentives for entrepreneurs Develop of potential growth centre & provide land at reasonable cost on easy payment. V.V.Vanniaperumal College For Women

32. SIPCOT Financial assistance: Term loans under IDBI refinance scheme IDBI seed capital scheme Underwriting the capital issue Guarantee loans from commercial banks Arrangements between TIIC & SIPCOT in lending loans All SSI units comes under TIIC For medium and major scale units Approach TIIC if loan < 30 lakh for limited company and loan <15 lakh for proprietary firm. SIPCOT sanction balance loan amount>30 lakh for limited company and loan >15 lakh for proprietary firm. If paid-up capital is more than 1crore apply only to SIPCOT V.V.Vanniaperumal College For Women

33. Project identification & supply of project profile: It recognize & identify of profitable project ; prepares project profiles; sells profitable project profile at nominal cost to entrepreneurs. Entrepreneurial guidance: It provides procedural guidance to entrepreneur. It built a data bank containing classified information on procedures to go. It helps in assessing the merits of alternative locations for proposed projects with rawmaterials , market potential & facilities V.V.Vanniaperumal College For Women

34. IIC- INDIAN INVESTMENT CENTRE IIC is a non profit service organization financed & supported by Government of India It promotes rewarding between joint ventures between India & foreign entrepreneurs. It provides advice to foreign company in investment condition in priority industry sectors in India It finds suitable Indian partner for foreign companies. It acts a link between Indian companies, Indian government & foreign investors. V.V.Vanniaperumal College For Women

35. ECB- Entrepreneurial Guidance Bureau The IIC has set up EGB to guide entrepreneurs in identifying investment opportunities, in selecting location for projects, prepare project profile & get finance. They supply information relating to product, demand, capacity production, source of raw material, equipment, investment involved & source of finance. Information relating to procedures are also assisted to entrepreneurs. V.V.Vanniaperumal College For Women

36. Commercial bank in entrepreneurial development V.V.Vanniaperumal College For Women

37. Commercial bank in entrepreneurial development In recent years the commercial banks have involved in promoting entrepreneurship through EDP.T hey organize EDP in collaboration with DIC,SISI and TCO. State Bank of India (SBI) SBI launch EDP in 1978 to promote entrepreneurship in backward area The EDP is one month training programme in behavioral science, management aspect, field training The EDP consist of three phases V.V.Vanniaperumal College For Women

38. Initial phase Creates awareness about entrepreneurship opportunity Development phase of training programme Support phase of counseling and infrastructure support It provides financial assistance to qualified technical entrepreneur to the extent of 100% SBI has set up a research and development fund of Rs 5 crore V.V.Vanniaperumal College For Women

39. Punjab National Bank(PNB) The bank study the economic viability and technical feasibility of projects They help in obtaining government consent required for industrial projects They help in raising finance in the form of debentures loans from financial institution They assist in raising foreign exchange resource required for import of machineries and raw materials They determine capital structure They suggest strengthening of capital base of SSI V.V.Vanniaperumal College For Women

40. INDIAN BANK(IB) The bank provides consultancy services for identification of projects to implementation and marketing by experts The service was started in 1973 BANK OF BARODA It started entrepreneurial banking to assist technical entrepreneur to set up their own units. It also assist in project feasibility study acquisition of fixed assert and marketing V.V.Vanniaperumal College For Women

41. BANK OF INDIA- entrepreneurial clinic come guidance service. This scheme offers assistance in selection of industry, preparation of project report and implementation of project It provides training, assistance in government clearance, purchase of machines and marketing of products CANARA BANK- The bank has set up industrial information and guidance service to provide information and advice to its client on technical , marketing , tax, export, accounting and management V.V.Vanniaperumal College For Women

42. GRINDLAYS BANK The small scale consultancy service prepares project feasibility report, conduct industry studies The merchant banking division manages public issue for raising capital, helps in raising capital from lending bodies SYNDICATE BANK The bank apprises the viability of credit proposals from SSI and offers counseling to the entrepreneurs V.V.Vanniaperumal College For Women

43. UNION BANK OF INDIA – GENERAL SERVICES CELL General services cell provides services like selection of machinery, accounting procedure, financial planning and other matters. UNITED BANK OF INDIA The banks technical cell provides assistance to persons about feasibility of their projects and technical as well as non technical guidance V.V.Vanniaperumal College For Women

44. UNITED COMMERCIAL BANK The bank provide technical assistance or guidance to self employed persons about feasibility of their projects and availability of raw materials and marketing of their products. INDIAN OVERSEAS BANK- Bank’s Small business Aid agency- It provides assistance to small business & offers guidance to person who wish to start the same. V.V.Vanniaperumal College For Women

45. IFCI- industrial finance corporation of india It was established in the year 1984 with the objective of providing medium & long term credit to industrial concerns It is the first development bank in India. Main Activities: 1.Direct Financing: Financing to industries the form of Rupee loan Sub-loans in foreign currency Underwriting & direct subscription to shares & debentures of public limited company V.V.Vanniaperumal College For Women

46. Guaranteeing of Deferred payment for machinery imported from abroad or purchased with the country Foreign currency loans raised by industrial units from foreign financial institution. Rupee loans raised by industrial concern from Indian bank. 2.Incidental Activities. Undertake research and survey for evaluating & dealing with investment Provide technical assistance to industrial concerns Undertaking merchant banking operations V.V.Vanniaperumal College For Women

47. 3. Promotional Activities To develop infrastructural facilities To guide in project identification, formulation, implementation To improve the productivity in human & material resource Eligibility for assistance Limited company Co-operative societies Purpose of financial assistance Setting up new industrial projects Expansion of existing units for diversification Moderation of existing units Not for working capital & existing liabilities V.V.Vanniaperumal College For Women

48. ICICI- Industrial credit & investment corporation of india ICICI was set up in the year 1955. It was started by govt. of India, world bank & American financiers. ICICI is organized as wholly private owned institution. Objectives: To assist in the creation, expansion and modernization of industrial enterprise in private sector To encourage the private ownership of industrial investment, To promote the participation of private capital both internal & external V.V.Vanniaperumal College For Women

49. Forms of Financial assistance: Underwriting of public & private issues Direct subscription to securities Provide loans in foreign currencies Leasing of equipment Guaranteeing payment for credit Eligibility criteria Limited company Sole & partnership firms, co-operative society V.V.Vanniaperumal College For Women

50. The minimum loan amount is 10 lakhs and the maximum amount can be of any extent The applicant can start business in any part of India. The enterprise should have experienced & qualified personnel. Special consideration is given to new entrepreneurs & enterprise in backward areas. ICICI bank also takes the promotional activities of developing projects & conducting feasibility study. ICICI has merchant banking division, technology development & credit rating services in India V.V.Vanniaperumal College For Women

51. IDBI- Industrial development bank of India IDBI was set up in 1964 as apex term lending financial institute in India. It act as the coordinating institution of all financial institution. Resources: Paid-up capital, reserves, National Industrial credit fund of RBI, market borrowings, world bank. Schemes of assistance Provides direct assistance in form of loans, underwriting of shares & debentures and guarantees. V.V.Vanniaperumal College For Women

52. It provides soft loans for modernization It refinance industrial loans granted by banks It rediscounts bills arising out of sales It finances exports & guarantees to export It engages in promotional activities Eligible institution for assistance It extend financial assistance to large & complicated projects and project located in less developed areas or promoted by technocrats. V.V.Vanniaperumal College For Women

53. Terms of lending: The lending rate is 14% A commitment charge of 1% is payable on undrawn amount of loan for first year. The loan is repayable in 16 half yearly installment after 2 year grace period. Backward Area development: IDBI provides concessional assistance in backward areas. The concession are lower interest rate, longer grace period, extended repayment period, reduced commitment fee. V.V.Vanniaperumal College For Women

54. Soft loan Scheme: This scheme provides loan for reduced interest rate. This scheme provides finance to units for modernization, replacement, renovation of plant for higher productivity & improve competitiveness. Refinancing scheme: The IDBI refinance the loans provided by commercial banks & SFC for small & medium units. Bills Rediscounting bill: This scheme helps the industrial units in buying capital equipment on a deferred payment basis V.V.Vanniaperumal College For Women

55. IIBI- Industrial investment bank of india Originally it was called Industrial Reconstruction Corporation of India (IRCI). It is set up for rehabilitation of sick industrial units. Functions: The IIBI grant loan and advances It underwrites stocks, bonds & debentures Guarantee loan/deferred payment Provide development activities like infrastructure facilities, raw materials, consultancy, hire purchase of machinery. V.V.Vanniaperumal College For Women

56. Resource: It consist of paid up capital, interest free loan from govt. of India, debt capital, resource from IDBI & RBI. Special Fund: “Reconstruction Assistance fund” for industrial reconstruction, revival, rehabilitation or development for which banking and other financial institution are not likely to grant loans V.V.Vanniaperumal College For Women

57. NIDc - National Industrial development corporation It was started in the year 1954for balanced and integrated development of industries both in private & public industry. Objects: To promote, establish industries & projects To aid & finance industrial undertaking To provide capital for purchase of machines & plants Functions: To put emphasis upon the manufacturing of capital goods, machine. To promote industries which contribute for economic growth V.V.Vanniaperumal College For Women

58. The forms of assistance from NIDC are: Loans & advances Subscription to shares & debentures Underwriting and guarantee of securities Management, control or supervision of industrial units Supply machines & technical advice V.V.Vanniaperumal College For Women

59. SIDC- State industrial development corporations SIDC is owned by state govt. to promote rapid industrialization in the respective state Provide risk capital in the way of equity & seed capital to the entrepreneurs. Granting financial assistance to industrial units by way of loans, guarantee. Developing industrial areas/ estate with infrastructure facility. Identify project ideas, prepare feasibility report, training entrepreneurs. V.V.Vanniaperumal College For Women

60. SFC-state financial corporation SFC was set up in the year 1951 which render assistance to medium & small scale industries in respective states. There are 18 SFC including TIIC. Resource: The financial resource of SFC are paid-up capital, reserve funds, bonds, refinance from IDBI and borrowings from RBI. V.V.Vanniaperumal College For Women

61. Forms of assistance: Granting of loans & subscribing to debentures. Guaranteeing loans Guaranteeing deferred payments for purchase of capital goods Subscribing to stocks, bonds or debentures of the industry Provide soft loan & seed capital to technical entrepreneur up to 2 lakhs with 1% interest V.V.Vanniaperumal College For Women

62. Eligible for assistance- The SFC render assistance to proprietary, partnership, companies, cooperatives which renders manufacturing or services. Lending Rates- The lending rates vary between 12.5% to 14.5%. A concession rate is charged on units in backward areas & for technical entrepreneur. Term of Assistance- The maximum financial assistance is 30 lakh . The Loan period is up to 10 or 12 years V.V.Vanniaperumal College For Women

63. Approching institute for assistance 1.Application form 2.Filling up of Application form 3.Follow up of the application 4.Disposal of application 5.Sanction Documentation & Disbursement V.V.Vanniaperumal College For Women