Financial institutions provide financial services and act as intermediaries between lenders and borrowers. They include banks, insurance companies, and brokerage firms. Both central and state governments in India provide institutional support to entrepreneurs and MSMEs through various organizations at different stages of business development. Central government institutions that provide financial and technical support include the Small Industries Development Organization, National Small Industries Corporation, and Small Industries Development Bank of India. State governments also establish organizations like State Financial Corporations and State Small Industries Development Corporations to support small businesses. Several non-government organizations additionally advocate for and support small businesses and entrepreneurs.

1. A Presentation on The
Entrepreneurship Development(18MS04T2)
5th Unit : Institutional Support to Entrepreneur& MSMEs
2nd Mid Topic: Financial Institutions Supporting Entrepreneurship
Presented by:
Immani Chandra Shekar
(Reg. No: 19K61E0020)
II-MBA-Finance
SITE 1

2. What do they mean by Financial Institution?
 In finance & economics, a financial institution is an
institution that provides financial services for its clients
or members. One of the most important financial
services provided by a financial institution is acting as a
financial intermediary. Most financial institutions are
regulated by the government.
 Financial institutions encompass a broad range of business operations within the
financial services sector including banks, trust companies, insurance companies,
brokerage firms, and investment dealers.
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3. Institutional Support in Entrepreneurship:
 Institutional support system is necessary at three stages enterprise development:
 Inception or Promotion
 Day-to-day management
 Expansion and Diversification
 Three dimensions of institutional support system are:
 Central Government
 State Government
 Non-government Support System
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4. Central Government Institutions:
 Small Scale Industries Board (SSIB):
Established in 1954 to provide effective coordination and inter-institutional linkages for the benefit
of small scale sector.
 National Bank for Agriculture& Rural Development (NABARD):
NABARD is designated as an apex development bank in the country. This national bank was
established in 1982 by a Special Act of the Parliament, with a mandate to uplift rural India by
facilitating credit flow in agriculture, cottage and village industries, handicrafts and small-scale
industries.
 Small Industries Development Organisation (SIDO):
It was constituted in 1954 to develop support services for promotion of SSS. Over the years, it has
seen its role evolve into an agency for advocacy, hand holding and facilitation for the small
industries sector. It has over 60 offices and 21 autonomous bodies under its management. 4

5. The SIDO has promoted the following institutes:
 Small Industries Service Institutes (SISI):
 Product-cum-Process Development Centres:
 Regional Training Centres (RTCs)
 Establishment of Training Institutes
 National Small Industries Corporation (NSIC):
 The National Small Industries Corporation (NSIC) Ltd. was established by the Government as a
Public Sector Company in 1955.
 The Technical Service Centres (TSCs), established by NSIC are functioning in different parts of
the country, providing diverse technical support to the small scale sector.
 The Industrial Development Bank Of India (IDBI):
The industrial bank of India (IDBI) was established on 1st July, 1964 under the industrial development
back of India act, as a wholly owned subsidiary of the reserve bank of India. The IDBI has been
assigned a special role to play in regard to industrial development.
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6.  Industrial Finance Corporation of India (IFCI):
The Industrial Finance Corporation of India (IFCI) was established in 1948 under an Act of
Parliament with the object of providing medium and long-term credit to industrial concerns in India
 Small Industries Development Bank Of India (SIDBI):
Subsidiary of IDBI, setup as an act of parliament in 1988.
 Industrial Credit and Investment Corporation of India(ICICI):
The Industrial Credit and Investment Corporation of India was conceived as a private sector
development bank in 1955 with the primary function of providing development finance to the
private sector.
 Industrial Investment Bank of India (IIBI):
IIBI was established in 1985 under the IRBI Act, 1984 on reconstitution of the erstwhile Industrial
Reconstruction Corporation of India as the principal credit and reconstruction agency to, undertake
reconstruction and rehabilitation of sick and closed industrial units in the country. 6

7.  Export-Import Bank of India (EXIM Bank):
EXIM Bank was set up on January 1, 1982 by an Act of Parliament as the principal financial
institution for promotion and financing of India’s international trade.
STATE GOVERNMENT INSTITUTES:
 State Financial Corporation (SFC):
SFCs, operating at the State-level, form an integral part or the development financing system in the
country. They function with the objective of financing and. promoting small and medium
enterprises for achieving balanced regional socio-economic growth, catalyzing higher investment;
generating greater employment opportunities and widening the ownership base of industry
 State Small Industries Development Corporations (SSIDCs) :
SSIDCs established under the Companies Act, 1956, are State Government undertakings,
responsible for catering to the needs of the small, tiny and cottage industries in the State/Union
Territories under their justification. 7

8.  State Industrial Development Corporations (SIDCs):
SIDCs were established under the Company Act, 1956. in the sixties and early seventies as wholly-
owned State Government undertakings for promotion and development of medium and large
industries.
Non-Government Institutions:
 Indian Council of Small Industries (ICSI):
It was established in 1979 to help tiny, cottage and small industries and artisans of rural areas.
Membership of ICSI constitutes about 1500 associations of the decentralized sector.
 Laghu Udyog Bharti (LUB):
LUB was founded in 1995 to promote and safeguard the interest of tiny and small scale industries.
It has been given representation on the national and the state level government bodies responsible
for the development of SSIs.
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9.  India SME Technology Services Ltd (ISTSL):
ISTSL provides a platform where micro, small and medium enterprises can tap opportunities at the
global level for acquisition of new and emerging technology or establish business collaboration.
 Federation of Indian Exporters Organisation (FIEO):
This is an apex organisation set up by the Ministry of Commerce in the year October 1965. It
represents the Indian entrepreneur’s spirit of enterprise in the global market.
 Small and Medium Business Development Chamber of India (SME Chamber of India):
The chamber puts all its efforts for the development and growth of MSMEs by organising various
activities to accomplish its objectives. The Chamber provides information and guidance to new
and existing entrepreneurs in effectively managing and growing their business.
 Federation of Associations of Small Industries of India (FASII):
It was promoted in 1959 to represent the problems of SSIs with the Government with other
agencies involved in promotion of SSI sector. 9

10. Department of Management Science
Thank You Sir
2020-2021
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