Financial inclusion and its impact on economic development
FINANCIAL INCLUSION AND ITS IMPACT ON DALIT ENTREPRENEURS
Dr. C. Paramasivan
Assistant Professor & Research Supervisor,
P. Mari Selvam
Ph.D (F.T) Research Scholar,
PG & Research Department of Commerce,
Periyar EVR College, Tiruchirappalli 620 023. Tamilnadu.
Email: firstname.lastname@example.org Cell: 9976037879
Financial inclusion is an innovative concept which makes alternative techniques to
promote the banking habits of the rural people because, India is considered as largest rural
people consist in the world. Financial inclusion is aimed at providing banking and financial
services to all dalit entrepreneur, transparent and equitable manner at affordable cost. The
financial assistance provide from the commercial banks through subsidies from Government.
These financial institution is available from the loans and subsidies in the enterprise to promote
the Tamilnadu Industrial Investment Corporation is helpful to dalit entrepreneurs. This paper is
an attempt to analysis the performance of financial inclusion and its impact on dalit
Financial inclusion, banking services, Subsidies from Government, Dalit entrepreneurs,
Financial inclusion operates the economic development it is associated with faster growth
and better income distribution while at the social level it lends its weight to the dimension of
social empowerment enables the poor to escape the ossified social structure. The banking sector,
if considered in isolation, also, reaps rich dividends as financial inclusion enables them to meet
the credit needs of the economy in most apposite manner. Financial inclusion is derivative of
funds utilise the business process. These activities are analysed form the dalit entrepreneurs.
These derivatives of funds used to us and impacts of the financial assistance and inclusion using
the dalit entrepreneurs.
Dalit owned a business and their involve in the business activity is called dalit
entrepreneurs, Dalit entrepreneurs have been socio-economic exploitation to low income
generating occupations. The fund was envisaged as a way to finance the expansion and
modernization of dalit-run businesses and also fund prospective dalit entrepreneurs. What
grabbed the dalit entrepreneur’s attention was a new principle. Under existing schemes for
scheduled castes, the state has been the giver and the community the recipient. Now, dalit
entrepreneurs need not worry about collateral and make rounds of banks, as we have our own
Financial services to TIIC
Tamilnadu Industrial Investment Corporation Ltd. [TIIC] is a premier State Financial
Corporation established in the year 1949. The Tamilnadu Industrial Investment Corporation
Limited (TIIC) is a Government Company incorporated under The Companies Act. TIIC is
considered as one of the State Financial Corporations for extending financial assistance towards
creation of fixed assets for starting new industrial units as well as for expansion, modernization
and diversification of existing units as well as working capital term loan assistance. Lending to
service sector projects like hospitals, hotels, convention centres, commercial complex etc., are
While TIIC provides assistance to micro, small, medium and large enterprises, about 90%
of the assistance goes to the micro, small and medium enterprises [MSME] sector. Of this, about
40% goes to first generation entrepreneurs. Thus, TIIC acts as a catalyst for industrial promotion
within the State by creating a new generation of entrepreneurs. TIIC has so far assisted 1,11,823
units with a cumulative sanction of Rs.9,412.99 cores up to 31.03.12.
Table No. 1 - Performance of the Corporation
Sl.No Particulars 2011 - 12 2010 - 11 2009-10
1. Sanction 80,097 93,925 66,813
2. Disbursements 70,294 73,559 57,027
3. Principal Outstanding 1,34,838 1,22,075 1,01,910
4. Recovery 77,676 70,927 49,488
5. Net Profit for the year 4,840 5,282 4,484
6. Capital Adequacy Ratio ( %) 17.39 15.88 13.72
7. Gross NPA ( % ) 6.66 10.80 15.91
8. Net NPA (% ) 2.98 3.51 3.35
Source : TIIC Annual Report on 2011-12.
Type of Assistance:
i. TIIC offers long and medium term financial assistance to various industries including
service sector in the following forms:
Term Loan and Working Capital Term Loans under the Single
Special types of assistance like Bill Financing Scheme, etc.
ii. Schemes Operated :
a) Scheme for Economically Backward Entrepreneurs:
Entrepreneurs Development Scheme (EDS) – New scheme for the
economically weaker section entrepreneurs.
b) Schemes for Manufacturing Enterprises
General Scheme for New and Expansion Project
Micro Small Enterprises Funding Scheme (MSEF)
Single Window Scheme (SWS)
Equipment Finance Scheme (EFS)
Restricted Technology Up gradation Fund Scheme (RTUF) for Textile
Open Term Loan (OTL)
Working Capital Term Loan (WCTL) for Rice Mills and
Scheme for take over of loans from other Financial Institutions.
c) Schemes for service Enterprises
Information Technology Project
Hospital Project (My Doctor / Doctor Plus)
Marriage Hall / Community Centre / Convention Centre
Warehouse / Cold Storage
Financial assistance under New Entrepreneur cum Enterprise Development Scheme
(NEEDS) for Micro & Small Enterprises (MSEs) has been introduced by the State Government
to enable educated youth to become first generation entrepreneurs. Financial assistance is
provided through Banks / TIIC for eligible candidates under this scheme. Entrepreneurs are
eligible for 25% capital subsidy and 3% interest subvention under the NEEDS.
Quantum of Loan Assistance:
TIIC provides Term Loan assistance normally upto a maximum of Rs.1500 Lakhs to
Proprietary and Partnership concern. In respect of Limited Companies normally a maximum
term loan assistance of Rs.3000 Lakhs can be considered. However, higher loan assistance may
also be considered for bigger projects on a case to case basis. TIIC has 6 Regional Offices, 25
regular Branch Offices and 5 Field Offices spread all over Tamilnadu. The Board of TIIC has
delegated appropriate powers for sanction of loans to the Branch Manager, Branch Sanction
Committee (BSC) and Regional Loan Sanction Committee (RLSC), Executive Committee and
Rate of Interest:
The rate of interest for the term loan for the current year is in the range of 14.50 % p.a. to
16.00 % p.a based on the quantum of loan and nature of industries. The Corporation will modify
the interest rate for all loans every year based on its cost of funds. Rate of interest presently
charged for the schemes operated
Subsidies from Government :
TIIC is the implementing agency for various capital subsidies of State Government in
respect of its assisted units. TIIC is also the nodal agency for select Central Government
Subsidies like Credit Linked Capital Subsidy, Food Processing Subsidy etc, in respect of its
assisted units. TIIC gives subsidy bridge loans against eligible subsidies to the eligible units
assisted by it, helping them to implement their projects on schedule.
i) State Government Subsidy
Following Incentives and Concessions provided by Tamilnadu Government :
Additional Capital Subsidy for Women/SC/ST/Physically Handicapped / Transgender
Employment Incentive subsidy
Special Capital Subsidy to Thrust Sector Enterprises
Subsidy Schemes for Agro based Enterprises
Back-ended Interest Subsidy
ii) Central Government Subsidy:
Credit Linked Capital Subsidy (CLCS) for Technology Up gradation
Restructured Technology Up gradation Fund (RTUF) Scheme for
Textile units & Jute Industries provided by Ministry of Textiles, New Delhi.
Food Processing subsidy provided by Ministry of Food Processing
Industries (MOFPI), New Delhi.
Table No. 2 - Subsidy / Incentives for Micro, Small and Medium Enterprises
Sl.No Subsidy State Capital Subsidy
1. Capital Subsidy 15% on eligible plant and machinery value, subject to a
maximum of Rs.30 Lakhs (set up in 251 backward blocks –
however micro enterprises are eligible in all areas)
2. Additional Capital
Subsidy for select
Additional Capital Subsidy of 5% subject to a maximum of
Rs.2.00 Lakhs to Enterprises located in backward areas / agro
based industries & set up by Women / SC / ST / Physically
handicapped / Transgender entrepreneurs
Employment Intensive Subsidy of 5% subject to a maximum of
Rs.5.00 Lakhs will be granted, if at least 25 workers have been
employed for a minimum period of 3 years within the first 5
years from the date of commencement of production for units set
up in backward areas / agro based enterprises
4. Subsidy for Agro
Capital Subsidies 1-3 above are extended for setting up of Agro
based enterprises in all 385 blocks in the State.
5. Special Capital
Subsidy to Thrust
notified by the State
Micro / Small / Medium manufacturing enterprises in notified
thrust sectors are eligible for 15% on eligible Plant and
Machinery subject to maximum of Rs.30.00 Lakhs. Such
industries set up anywhere in the State are eligible.
6. Back-ended Interest
3% Back Ended Interest Subsidy to a maximum of Rs.10.00 lakh
over a period of five years on loans up to Rs.100.00 lakh for
Micro / Small /Medium Enterprises under specific schemes like
MSEF Scheme, CLCS eligible technology.
Source : TIIC Annual Report on 2011-12.
Financial inclusion was promote the various number financial services in the society.
Any other people have involve the any other financial activities, so for new schemes for
announced the government. These kinds of activities for properly utilise the dalit entrepreneurs
is not merely utilized. The financial assistance was given by the any other schemes and so for
not active business and other business activities. In case of many more dalit entrepreneurs nor
awareness from the financial services and inclusive growth and development of the financial
inclusion and services. Show that all other dalit entrepreneurs have awareness in the financial
inclusion and inclusive growth and development.
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