The document summarizes the various financing sources available for small scale industries in India. The key financing sources discussed are: 1. Central government agencies like the Small Industries Development Bank of India (SIDBI) that provides indirect financing through banks and direct financing for new units and modernization. 2. State government sources like State Financial Corporations and State Small Industries Development Corporations that provide long-term financing and assistance. 3. Banks like commercial banks, regional rural banks, and cooperative banks that provide short, medium, and long term financing.

1. FINANCING SOURCES FOR SMALLFINANCING SOURCES FOR SMALL
SCALE INDUSTRIESSCALE INDUSTRIES
By:
Miss. Priyanka R. Wandhe

2. “No SSI unit can take off without monetary support.”
1.1. Financing from Central Government:Financing from Central Government:
Established Small Industries Development Bank of India (SIDBI).
Operations mainly classified into 3 heads:
Indirect Finance: Provides finance to commercial banks who
gives finance and enable them to provide short term loans, credit
to SSI, provides bill discounting facilities.
Direct finance: Provided for setting up new units, modernisation
& upgradation of existing units,for developing marketing
networking, for export promotion, for infrastructure development.
Promotional & Development Activities: SIDBI aims at-:
Technology upgradation, market promotion, quality management,
HR Development, guarantee free credit for long term & working
capital financing.

3. 2. Financing from State government:2. Financing from State government:
State Financial corporation (SFC):State Financial corporation (SFC): Provides longProvides long
term credit to SSI. Function to achieve Socio-economicterm credit to SSI. Function to achieve Socio-economic
goals set by State Govt. Amount financed by SFC to SSIgoals set by State Govt. Amount financed by SFC to SSI
is 73% of total sanctions to SSI.is 73% of total sanctions to SSI.
State Small Industries Development corporationState Small Industries Development corporation
(SSIDC):(SSIDC): Provides assistance to small cottage and tinyProvides assistance to small cottage and tiny
industries to procure & distribute scarce raw materials,industries to procure & distribute scarce raw materials,
hire purchase facilities to purchase machinery.hire purchase facilities to purchase machinery.
State Industrial Development CorporationState Industrial Development Corporation
(SIDIC):(SIDIC):
Undertaking wholly owned by State Govt. Acts as aUndertaking wholly owned by State Govt. Acts as a
catalyst for state wise industrial development.catalyst for state wise industrial development.
Mainly engaged in infrastructure development.Mainly engaged in infrastructure development.

4. 3. Financing from Banks:3. Financing from Banks:
From Commercial Banks: Gives priority to financeFrom Commercial Banks: Gives priority to finance
short, medium & long term needs of SSI. Theyshort, medium & long term needs of SSI. They
provide finance in the following ways:- cash credit,provide finance in the following ways:- cash credit,
bill discounting & purchasing, term loans, demandbill discounting & purchasing, term loans, demand
loans.loans.
Regional Rural Banks (RRB): To develop ruralRegional Rural Banks (RRB): To develop rural
economy by financing agricultural & ruraleconomy by financing agricultural & rural
activities. Provides major loans to rural artisians,activities. Provides major loans to rural artisians,
village & cottage industries.village & cottage industries.
Co-operative Banks: Finances the SSI in urbanCo-operative Banks: Finances the SSI in urban
areas and gives credit to priority sector.areas and gives credit to priority sector.

5. 4. Financing from statutory Boards:4. Financing from statutory Boards:
Set up to ensure co-ordination between SSISet up to ensure co-ordination between SSI
sector, various financial institutions & Govt.sector, various financial institutions & Govt.
It renders advice to the Govt. on variousIt renders advice to the Govt. on various
policy matters & other issue of SSI.policy matters & other issue of SSI.

6. 5.5. Financing by statutory Corporations:Financing by statutory Corporations:
National Small Industries Corporation (NSIC):National Small Industries Corporation (NSIC):
Provides assitance in export, training in industrialProvides assitance in export, training in industrial
trade, marketing support, supply of indeginous &trade, marketing support, supply of indeginous &
imported machines on hire purchase or leasingimported machines on hire purchase or leasing
basis.basis.
North Eastern Development FinanceNorth Eastern Development Finance
Corporation Limited (NEFDI):Corporation Limited (NEFDI): Provides researchProvides research
facilities. It helps for international funding.facilities. It helps for international funding.

7. Khadi and Village Commission (KVIC):Khadi and Village Commission (KVIC):
Finance schemes are:-Finance schemes are:-
a).a). Interest subsidy scheme of bank finance:Interest subsidy scheme of bank finance:
(Interest subsidy eligibility certificate) can raise loans(Interest subsidy eligibility certificate) can raise loans
from bank to the extent of amount mentioned in thefrom bank to the extent of amount mentioned in the
certificate, can be used for short & long termcertificate, can be used for short & long term
finance.finance.
b).b). Margin Money schemeMargin Money scheme: Commercial banks & State: Commercial banks & State
KVI provides margin money to the enterpreneurs ofKVI provides margin money to the enterpreneurs of
mainly village industry.mainly village industry.

8. 6. Additional State Govt. Agencies:6. Additional State Govt. Agencies:
State Commissioner or Director of Industries &State Commissioner or Director of Industries &
District Industries Centres (DIC):District Industries Centres (DIC):
Implements the Govt. policies for development ofImplements the Govt. policies for development of
SSI.SSI.
Set up to implement centrally sponsored scheme.Set up to implement centrally sponsored scheme.
Recently, set up single window clearance system forRecently, set up single window clearance system for
the benefit of SSI enterpreneurs.the benefit of SSI enterpreneurs.

9. 7. Other Agencies:7. Other Agencies:
Non Govt. organisation (NGO):Non Govt. organisation (NGO): Registered underRegistered under
Society’s Registrations Act & they are non profitSociety’s Registrations Act & they are non profit
organisations.organisations.
Involved in various activities like:-Involved in various activities like:-
Training of management assistants, setting up ofTraining of management assistants, setting up of
testing centres, etc.testing centres, etc.
Housing Urban Development Corporation Ltd.Housing Urban Development Corporation Ltd.
(HUDCO):(HUDCO): Helps in the infrastructure developmentHelps in the infrastructure development
for SSI.for SSI.

10. THANK YOUTHANK YOU