State Finance Corporation

The State Finance Corporations (SFCs) are an integral part of institutional finance structure of a country. Where SEC promotes small and medium industries of the states. Besides, SFC help in ensuring balanced regional development, higher investment, more employment generation and broad ownership of various industries
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.
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 Tamil Nadu 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 labor-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. Ateura present in India, there are 18 state finance corporations (out of which 17 SFCs were established under the SFC Act 1951). Tamil Nadu Industrial Investment Corporation Ltd. which is established under the Company Act, 1949, is also working as state finance corporation.
The SFCs provides loans mainly for the acquisition of fixed assets like land, building, plant, and machinery.

(ii) The SFCs help financial assistance to industrial units whose paid-up capital and reserves do not exceed Rs. 3 crore (or such higher limit up to Rs. 30 crores as may be notified by the central government).

(iii) The SFCs underwrite new stocks, shares, debentures etc., of industrial units.

(iv) The SFCs grant guarantee loans raised in the capital market by scheduled banks, industrial concerns, and state co-operative banks to be repayable within 20 years.

1. State Finance Corporation GOPALA KRISHNA.N 211074 SDM COLLEGE, UJIRE CONTACT@ [email protected]

2. State Financial Corporations (SFCs) are the  financial institutions that were set up by the state governments in India, post-Independence . Where SEC promotes small and medium industries of the states. There are 18 SFCs in India, out of which 17 were established under SFC Act, 1951 and remaining Tamil Nadu industrial Investment Corporation Ltd . was under Companies Act,1949. Punjab Financial Corporation is the first set up in country in 1953.

3. OBJECTIVIES The main objectives of the S.F.C are to provide financial assistance to medium and small scale industries which are outside the scope of I.F.C.I. It covers not only public limited companies but also private limited companies, partnership firms and proprietary concerns.  SFC provides foreign exchange loans under World Bank schemes.

4. Functions Providing Financial Support and Long Term Financial Assistance Up to 20 Years Guarantee for Loans Acts as Agents of Government Underwriting and Subscription Guarantee for Purchases

5. Prospects of SFC Special Help to Women Entrepreneurs Highest loan provider for small scale industry Industrial research

6. Open To Questions… GOPALA KRISHNA.N 211074 SDM COLLEGE, UJIRE CONTACT@ [email protected]