1. Entrepreneurship
By-
Avinash Kumar
kumaravinash23@gmail.com

2. G
Everyone in the world has at least one
talent, one passion, one hobby that can
become profitable if used correctly.

3. G
Entrepreneur
 one who organizes, manages and assumes the risks of a
business or enterprise
 "Entrepreneurship is the process of creating or seizing an
opportunity and pursuing it regardless of the resources
currently controlled"

4. G
Impact of entrepreneurial firms
 Job creation
 Economic growth
 New technology
 Serving small markets

5. G
Entrepreneurship Development: Role of Financial
Institutions
 Industrial growth and economic development of developing nations depend to a
great extent on the role played by entrepreneurs. There are many instances of
individual entrepreneurs whose creativity has led to the industrialization of
many nations.
 However, in India the economic and industrial growth was slow due to lack of
efficient entrepreneurs, industrial environment, technical know-how .
 Government and financial institutions have played a very important role in the
entrepreneurship development.

6. s
Efforts to Foster Entrepreneurship in India
 Many of India's leaders have perceived the need for the development of
entrepreneurship in their country, and a number of programs have emerged to meet
this need. Various agencies participate in entrepreneurial development across India.
Such as:-
 The National Institute for Entrepreneurship and Small Business Development
(NIESBUD).
 The Entrepreneurship Development Institute of India (EDII).
 Industrial Development Bank of India (IDBI).
 Small Industries Development Bank of India (SIDBI).
 North Eastern Development Finance Corporation Limited (NEDFi)
 RBI’s role and steps for the development of SSI sector

7. s
The Entrepreneurship Development Institute
of India
 Sponsored by several financial institutions, namely (ICICI), (IDBI), the
Industrial Finance Corporation of India (IFCI), and the State Bank of India.
 One of the institute that, focuses on creating entrepreneurial personalities
among youth.
 EDII launched a variety of programs to do just that. The Rural
Entrepreneurship Development division, for instance, concentrates on rural
development, employment generation, and poverty alleviation through the
promotion of micro-enterprises. This division also has an informal micro-credit
delivery system.

8. s
Contd….
 EDII's entrepreneurship camp involves teenagers from across India coming to
the EDII campus for a ten-day period.
 The program is designed to increase the self-confidence and thereby to develop
their concern for enterprise and for achievement. Methodology includes role
playing and simulation exercises, with the following objectives in mind:
 enabling participants to realize their latent potential;
 developing capabilities by sharpening skills;
 motivating individuals to seek independent, innovative, and challenging careers;
 fostering entrepreneurial traits including creativity, concern for excellence,
leadership, and problem-solving;
 providing an opportunity to interact with achievers.

9. s
Credit Flow of Commercial Banks to Small Scale
Industry(SSI) and Tiny Sectors
Credit to ( 1995 1996 1997 1998 1999
in lakhs )
SSI sector 25,8431 29,485 31,542 38,109 42,674
(15.29) (15.99) (16.6) (17.5) (17.33)
Tiny 7,734 8,183 9,515 10,273 NA
sector (29.93) (29.93) (30.2) (27.0)
Net Bank 1,69,038 1,84,381 1,89,684 2,18,219 2,46,203
credit
RBI website source

10. S
Credit Flow of Commercial Banks to SSI and
Tiny Sectors ie,very small sector
250000
200000
150000
100000
50000
0
1995 1996 1997 1998 1999
SSI Sector Tiny sector Net Bank credit
RBI website source

11. M
Role of Small Industries Development Bank of India(SIDBI)
 SIDBI was established in April 1990 under an Act of Parliament as a wholly-
owned subsidiary of Industrial Development Bank of India and as the principal
financial institution for the following three-fold activities:
 Financing the small scale sector by providing:
 Indirect assistance to primary lending institutions
 Loans granted by PLIs for new SSI projects and their expansion, technology up gradation,
modernization, quality promotion etc.
 Loans sanctioned by PLIs to small road transport operators, qualified professionals for self-
employment, small hospitals and nursing homes and to promote hotels and tourism-related
activities.
RBI website source

12. Contd…
 Direct assistance to small scale units
 SSI units for new/expansion/diversification/modernization projects.
 Marketing development projects which expand the domestic and international marketability of SSI products.
 Existing well-run SSI units and ancillaries/sub-contracting units/ vendor units for modernization and
technology up gradation.
 Infrastructure development agencies for developing industrial areas.
 Leasing and hire purchase companies for offering leasing/hire purchase facilities to SSI units.
 Existing export-oriented units to enable them to acquire ISO-9000 Series Certification
 Promoting small industries through development and support services;
 Coordinating the functions of other institutions engaged in similar activities
Source: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164.

13. M
Growth of Credit Flow from SIDBI to SSI Sector
Year Sanction ( in Disbursemen Sanction Growth of
cr) (express t Disbursemen Disburseme
permission) (pay out t Gap nt (%)
money)
1990- 2410 1839 571 -
91
1991- 2847 2028 819 10.23
92
1992- 2909 2146 763 5.82
93
1993- 3357 2672 685 24.51
94
1994- 4706 3390 1316 26.87
95
1995- 6066 4801 1265 41.62
Source: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164.

14. M
Growth of Credit Flow from SIDBI to SSI Sector
8000
7000
6000
5000
4000
3000
2000
1000
0
91
92
93
94
95
96
97
98
-
-
-
-
-
-
-
-
90
91
92
93
94
95
96
97
19
19
19
19
19
19
19
19
Sanction(in cr) Disbursement Sanction Disbursement Gap
Source: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164.

15. Source: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164. M
Growth of Credit Flow from SIDBI to SSI Sector
50
41.62
40
26.87
30 24.51
20 10.23 5.82 14.31
10 0 -4.5
0
-10
1
2
3
4
5
6
7
8
-9
-9
-9
-9
-9
-9
-9
-9
90
91
92
93
94
95
96
97
19
19
19
19
19
19
19
Growth Disbursement(%) 19

16. M
Role and Steps taken by RBI for the Development
of SSI Sector
 Credit to SSI sector is monitored periodically by Reserve Bank of India,
Department of SSI and National Advisory Committee of SIDBI, State Level
Bankers Committee and District Level Coordination Committees of the
Bank.
 The Central Government on the recommendation of RBI has raised the
investment limit for SSIs from Rs.60 lakhs to Rs.300 lakhs and for tiny units
from Rs.5 lakhs to Rs.25 lakhs.
 Public sector banks have been advised to make it operational more
specialized SSI branches at centers where there is a potential for financing
many SSI borrowers.
 To extend 'Single Window Scheme' of SIDBI to all districts to meet the
financial requirements (both term loan & working capital) of SSIs.
Source: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164.

17. M
Contd…..
 With a view to moderating the cost of credit to SSI units, banks are
advised to accord SSI units with a good track record the benefits of
lower spread over the Prime Lending Rate.
 In order to take expeditious decision on credit proposals of SSI units,
banks have been advised to delegate enhanced powers to the branch
managers of the specialized SSI branch so that most of the credit
proposals are decided at the branch level.
 Initiatives Announced:-
a) Launching of A New Credit Insurance Scheme
b) Enhancement of Limit of Composite Loan Scheme
c) Enhancement of Limit of Working Capital
Source: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164.

18. M
Institutional Network: Finance and Credit in India
Long-term Short-term & Agriculture
-All India Medium-term Credit
Financial -Commercial -Cooperative
Institutions Banks Banks
(AIFIs) --Regional Rural -NABARD
-Regional DFIs Banks ( RRBs)
Non-banking Government Non-Govt.
Finance owned Organisations
Companies Institutions/ (NGOs) & Micro
(NBFCs) Corporations Finance
Institutions
(MFIs)
RBI website source & FICCI Source

19. M
All India Financial Institutions(AIFIs)
Financial Assistance
250000
228570
206655
200000
RS IN MILLION
150000
103658 104484
100000
50000
0
2003-2004 2004-2005
YEAR (April - Septem ber)
Sanctions Disbursements
(Data Relate to All India Development Banks and Investment Institutions only)
Viz. IDBI, IFCI, SIDBI, IIBI, IDFC and LIC, GIC, National Insurance Co. Ltd,
New India Ass. Co. Ltd , Oriental Insurance Co. Ltd., United India Insurance Co. Ltd.

20. M
ALL FINANCIAL INSTITUTIONS
1400000
1200000
1000000
RS IN MILLION
800000
600000
400000
200000
0
1999-2000 2000-2001 2001-2002 2002-2003 2003-2004
YEAR
Sanctions Disbursements
Source : Report on Development Banking in India 2003-04

21. M
Long Term Loans by Commercial Banks
Amt (in Crs) % of Tot. Credit
160,000 35.00%
140,000 30.00%
120,000 25.00%
100,000
20.00%
80,000
15.00%
60,000
10.00%
40,000
5.00%
20,000
- 0.00%
Mar-90 Mar-95 Mar-00 Mar-02
Source : RBI Website Year Amt(Crs) % of Tot. Credit

22. M
Long Term Loans by AIFIs
140,000 90.0%
80.0%
120,000
70.0%
100,000
60.0%
80,000 50.0%
60,000 40.0%
30.0%
40,000
20.0%
20,000
10.0%
0 0.0%
Mar-90 Mar-95 Mar-00 Mar-02
Source: RBI website
LT Credit % to totalcredit

23. M
Comparative Chart – in Rs cr
180,000
Rs in crores
160,000 Banks AIFI
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
Mar-90 Mar-95 Mar-00 Mar-02
Source: RBI website

24. M
FICCI STUDY ON
LONG TERM FINANCING NEEDS OF THE INDIAN
INDUSTRY AND THE ROLE OF DEVELOPMENT FINANCIAL INSTITUTIONS
IN PROMOTING “Entrepreneurship” IN VARIOUS INDUSTRIAL SECTOR
 Survey conducted Feb – March 2004, elicited(factual) response
from 248 companies with a wide geographical and sectoral spread
 The companies which participated in the survey ranged from Rs. 1
million to 5000 million
 The Survey represents a wide array of activities and includes sectors
such as paper, cement, automobiles and auto ancillary, consumer
electronics, electrical machinery, textile, wires and cables,
petrochemicals, iron and steel, real estate and pharmaceuticals.

25. M
PLANS FOR FRESH INVESTMENTS IN NEAR FUTURE
No
11%
Yes
89%
Yes No
Source : FICCI Study – March 04

26. M
SOURCE OF FINANCE PROPORTION OF
RESPONDENTS*
EQUITY CAPITAL 22
DEBENTURES AND BONDS 08
TERM LOANS FROM FIs 46
TERM LOANS FROM BANKS 59
ANY OTHER (MAINLY INTERNAL) 33
ACCRUALS & ECBs
(* Figures will not add up to 100 as multiple responses were allowed)

27. M
PROPORTION OF PROJECT COST TO BE MET FROM DEBT FINANCE
30
25 24
PROPORTION OF RESPONDENTS
22
20
20
15
10
10 9
7 7
5
1
0
less than 20-40 40-50 50-60 60-70 70-80 80-90 90-100
20
Source : FICCI Study – PROPORTION OF DEBT FINANCE
March 04

28. M
FICCI STUDY ON
LONG TERM FINANCING NEEDS OF THE INDIAN INDUSTRY AND THE
ROLE OF DEVELOPMENT FINANCIAL INSTITUTIONS
HIGHLIGHTS
 The economy today stands at the beginning of an investment
cycle
 A whopping 80% of the respondents are of the opinion that
revival and strengthening of DFIs is extremely important
 Corporate India’s heavy dependence of debt financing for fresh
investments continues
 Respondents have voiced concerns about the low levels of
activity of the DFIs

29. M
Cont…
 The Industry is divided in its opinion on the emergence of
alternative structures for raising debt finance
 An important finding in the above context is the skewness,
in terms of turnover, that emerges
 The participants in the present survey have expressed
apprehensions about the role Universal Banks can pay
 Revival and Strengthening of DFIs would go a long way in
ensuring that fresh investments in the economy are not
hampered

30. D
The National Institute for Entrepreneurship
and Small Business Development
 The institute organizes:-
 Entrepreneurship development programs,
 Prepares manuals, and produces educational videos;
 Its training activities are stimulating, supporting, and sustaining
entrepreneurship.

31. D
Industrial Development Bank of India (IDBI)
 IDBI is the tenth largest bank in the world in terms of development.
 The National Stock Exchange (NSE), The National Securities Depository
Services Ltd. (NSDL), Stock Holding Corporation of India (SHCIL) are some of
the institutions which has been built by IDBI.
 IDBI is a strategic investor in a plethora of institutions which have
revolutionized the Indian Financial Markets.
 IDBI Bank, promoted by IDBI Group started in November 1995 with a branch
at Indore with an equity capital base of Rs. 1000 million.

32. D
Main functions of IDBI
 IDBI is vested with the responsibility of coordinating the working of institutions
engaged in financing, promoting and developing industries. It has evolved an
appropriate mechanism for this purpose.
 Developmental Activities of IDBI:-
 Promotional activities:
 the Bank continues to perform a wide range of promotional activities relating to
developmental programmes for new entrepreneurs, consultancy services for small
and medium enterprises and programmes designed for accredited voluntary agencies
for the economic upliftment of the underprivileged

33. D
 Technical Consultancy Organizations:
 With a view to making available at a reasonable cost, consultancy and advisory
services to entrepreneurs, particularly to new and small entrepreneurs, IDBI, in
collaboration with other All-India Financial Institutions, has set up a network of
Technical Consultancy Organizations (TCOs) covering the entire country.
 Entrepreneurship Development Institute:
 Realizing that entrepreneurship development is the key to industrial development,
IDBI played a prime role in setting up of the Entrepreneurship Development
Institute of India for fostering entrepreneurship in the country.
 It has also established similar institutes in Bihar, Orissa, Madhya Pradesh and Uttar
Pradesh. IDBI also extends financial support to various organizations in conducting
studies or surveys of relevance to industrial development.

34. D
Role of North Eastern Development Finance
Corporation Limited
 NEDFi is the premier financial and development institution of the North East of
India.
 The main objectives is to carry on and transact the business of providing credit
and other facilities for promotion, expansion and modernization of industrial
enterprises and infrastructure projects in the North Eastern Region of India
 Also carry on and transact business of providing credit and other facilities for
promotion of agro-horticulture, and sericulture plantation, aquaculture, poultry,
dairy etc in order to initiate large involvement of rural population in the
economic upsurge of the society and faster economic growth of the region.

35. D
NEDFi Initiatives
 The corporation launched its Micro Credit Finance Scheme to benefit agriculture,
fishery, animal husbandry, horticulture and rural industries.
 Its initiatives which is being sponsored by UNDP with NEDFi being the
implementing agency, and the Design Centre for Handloom and Handicrafts, were
undertaken not only to improve the lot of thousands of rural artisans all over the
North-East, but also help promote exports in the sector.
 Establishment of IT Park at Guwahati and an appropriate financing scheme for IT
industries to help increase the lending portfolio of NEDFi.
 Making some headway in promoting bio-technology in the region by negotiating
with foreign promoters.
 Preparing a master plan for the development of tourism and particularly embarking
on a big private sector adventure tourism project.