Small Scale Industry(Rural Banking & Microfinance)By: Somya Agrawal
Small Scale Industry• A small scale industry (SSI) is an industrialundertaking in which the investment in fixed assetsin plant & machinery, whether held on ownershipterm or on lease or hire purchase, does not exceedRs. 1Crore.• However, this investment limit is varied by theGovernment from time to time.
Registration• Not compulsorily required.• If registered with State Directorate or Commissionerof Industries or DICs makes the unit eligible foravailing different types of Government assistance.FinancialAssistanceMedium AndLong Term LoansMachinery OnHire-purchaseSpecial SchemesFor Promotion OfSSI
Organizations Promoting SSIsThe Ministry of Micro, Small and Medium EnterprisesSmall Industry Development Organization (SIDO)National Small Industries Corporation Ltd (NSIC)Small Industries Development Bank of India (SIDBI)The National Commission for Enterprises in the Unorganized Sector (NCEUS)National Institute of Small Industry Extension Training (NISIET) at HyderabadNational Institute of Entrepreneurship and Small Business Development(NIESBUD) at NOIDAIndian Institute of Entrepreneurship (IIE) at Guwahati
Role of SSIEmploymentgenerationMobilization ofresources andentrepreneurial skillEquitabledistribution ofincomeBalanced regionaldevelopmentIndigenization Promotes exportsSupports thegrowth of largeindustriesBetter industrialrelations40% of Exports80% of industrialemployment
Problems & Challenges Faced by SSIsProblem ofskilledmanpowerInadequatecreditassistanceIrregularsupply of rawmaterialAbsence oforganizedmarketingLack ofmachinery andequipmentAbsence ofadequateinfrastructureCompetitionOtherproblems
Role of SFC• Providing long term finance to industrial enterpriseshaving sole proprietary, partnership, company and co-operative society form of business organization.• Provide working capital loans and meeting variousshort-term needs of their clients.• Subscribing equity and debentures of industrialenterprises.• Providing financial assistance to small and mediumenterprises engaged in service sector.
Project advisory and Finance Project conceptualization and related services, including guidancein relation to selection of projects, preparation of feasibilitystudies, capital structuring, techno – economic feasibility, financialengineering, project management design etc. Credit Syndication including assistance in legal documentation etc. Documentation of various project documents Placement of debt – equity including design of the structure ofinstruments, placement of instruments with financial institutions,bank etc
Assist in organizational structural changes• Analysis of operational performance• Study of existing organizational structure• Study of the existing position and rules and regulations• Market analysis with respect to products• Review of domestic and international scenario• Valuation of fixed assets and inventory• Advising on formation of new entity• Preparation of relevant agreements / legal documents.• Legal Advisory Services