In this article we will discuss about the sources of financial support system in entrepreneurship. The sources are: 1. Financial Support by Ministries/Departments/Organizations 2. National Level Financial Institutions 3. State Financial Corporations Offering Specialized SSI Schemes.

1. Financial Support by Ministries/Departments/Organizations:

(i) Department of Biotechnology:

The Department has a large number of programmes to support innovation and R&D in the area of biotechnology. It inter-alia provides programme-based support to outstanding research groups in Universities and Institutions for strengthening the ongoing activities by providing equipment and seed money for undertaking research in various areas of biodiversity. It also supports basic research in modern biology. Mission mode programmes in bio-energy, bio-fuels vaccines, drugs and diagnostics are also supported.

(ii) Ministry of Small Scale Industries:


It has a number of schemes of financial support to small-scale units. There is a Scheme of Credit Linked Capital Subsidy to facilitate technology up gradation in to these units. Under another Scheme, units are reimbursed expenditure involved in getting ISO 9OOO/ISO 14001 Certification.

(iii) Ministry of Non-Conventional Energy Sources:

It supports R&D for technology development and manpower development in renewable energy areas.

R&D projects could be submitted in any one of the modes:


(a) An industrial unit registered with the DSIR

(b) A consortium of industry, academic institutions, research laboratories and R&D institutions etc. may be formed to un­dertake a R&D project and

(c) An industry may join hands with the Ministry to entrust a R&D project to an R&D institution/research laboratory or an academic institution.

The thrust areas identified by the Ministry are solar energy, energy from urban and industrial waste etc. The Ministry supports up to 50% of the R&D project cost.


(iv) Ministry of Food Processing Industries:

For modernization of food processing industry, technology up gradation of units etc., the Ministry provides financial assistance to the extent of 25% to 33.33% of project cost.

(v) Department of Industrial Policy and Promotion:

It has a comprehensive scheme for modernization and technology up grada­tion of all segments of leather industry. Under the scheme, assistance is available in the form of investment grant up to a maximum of 30% of the investment to small-scale units and 20% to non-small scale units, with a specified ceiling in monetary terms.


(vi) Ministry of Steel:

Financial assistance is provided to R&D proj­ects for technology up gradation, innovativeness, improvement in energy efficiency and other aspects relating to iron and steel industry. It is also providing financial support to SMEs operating in the steel re-rolling sector. A Technology Information Resource and Facilitation Centre has been planned to provide long term sustainability to the sector through research, technology development and demonstration, design and business support facilities.

(vii) National Innovation Foundation:

It supports scouting, spawning, sustaining and scaling up of grassroots green innovations and links innovation, enterprises and investments.


(viii) Small Industries Development Bank of India (SIDBI):

The bank provides finance and other support systems for modernization and up gradation of small-scale units.

(ix) National Bank for Agriculture and Rural Development (NABARD):

NABARD is established as a development Bank, in terms of the Preamble of the Act, “for providing and regulating Credit and other facilities for the promotion and development of agriculture, small scale industries, cottage and village industries, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting integrated rural development and securing prosperity of rural areas and for matters connected therewith or incidental thereto.”

2. National Level Financial Institutions:


(i) Bank of Baroda:

The new age woman seeks opportunities and challenges to be able to support herself and her family. In order to encourage such women and fuel their desire to achieve something in life, Bank of Baroda offers financial assistance for professional, self-employed women and also those into retail trade and agricultural activities.

Key Benefits of the Scheme:

Enables financial assistance to women entrepreneurs in setting up/ engaged in:


a. Retail Trade

b. Village or Cottage/Small Scale Industries.

c. Allied agricultural activities.

d. Focus on women business entrepreneurs and their credit requirements.

e. The interest rate is fixed on the credit rating system at reasonable terms.

f. Simple application procedures.


(ii) Bank of India:

The various schemes by BOI have been:

I. Loan for purchase of Plant & Machinery/Equipment/Other Moveable Assets. Target Group- Micro & Small Enterprises in rural, semi urban, urban and metro branches

II. Loan for Construction/Renovation/Repair of building, Purchase of Computer, lab equipment, Furniture & Fixtures, books etc. Approval for construction/addition/alteration from all the concerned authorities must be in place for considering the credit facility. Target Group: Educational Institutions such as, Universities, Colleges, Schools

III. General purpose term loan for SME constituents Viz., for R & D activity, marketing and advertisement expenses Purchase of machineries/equipments, Preliminary expenses etc. Target Group: Proprietorship/Partnership firms, Limited Companies falling within the new definition of SME, engaged in the business for the past 3 years with audited financial statement of accounts.

(iii) Canara Bank:


A frame work, as notified by Reserve bank of India, has been implemented to provide a simpler and faster mechanism to address the identified stress in the accounts of MSMEs by way of a Corrective Action Plan (CAP) suggested by the “Committee for Stressed Micro, Small and Medium Enterprises”.

Any MSME borrower/Enterprise may approach the Bank of Committee for Stressed MSME, if the Enterprise reasonably apprehends failure of its business or its inability to pay the debts or there is erosion in Net worth due to accumulated losses to the extent of 50% of its Net worth, for a Corrective Action Plan under the Framework. Such Enterprise has to make an application in the prescribed format. On the basis of Early Warning Signals or accounts getting reported as SMA (Special Mentioned Account), Branch main­taining accounts may refer to committee for Corrective Action Plan.

(iv) Central Bank of India:

Serving over five lakh micro, small and medium enterprises (MSMEs) across India, Central Bank of India is committed to helping more and more MSMEs achieve success. This nationalized bank offers a number of schemes for the benefit of MSMEs, and is all set to launch new schemes and modify some existing schemes to extend more help to this important segment of our country’s economy.

(v) Corporation Bank:

The bank has launched exclusive SME loan centres in 14 cities across the country. Each SME centre is supported by a team of relationship managers and central credit processing mechanism, the release added. Corporation Bank offers 0.75 per cent concession on interest rates for women SME customer under its ‘grand festival loan bonanza’ campaign. Under this offer, the bank offers interest rate concession of 0.50 per cent on the applicable rate on all the SME credit schemes. Added to this, women entrepreneurs will get additional interest rate concession of 0.25 per cent.


There is also a 50 per cent concession on processing charges.

To encourage entrepreneurs, the bank offers various specialised and tailor-made credit schemes suiting their credit and business requirements.

(vi) Oriental Bank of Commerce:

Under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), all new or existing Micro and Small Enterprises (Manufacturing Sector and Service Sector) to which credit facility has been provided by the Bank without any collateral security and/or third party guarantees.

(vii) State Bank of India:

State Bank of India grants financial assistance to technically qualified, trained and experienced entrepreneurs for setting up new viable industrial projects.


Loans are extended to technocrats who are unable to meet the normal margin requirements under the liberalized schemes. The borrower has to be a technically qualified person (a degree/diploma holder in engineering or technology), a craftsman with adequate experience or training or a person possessing a degree in business or industrial management, a chartered accountant or a cost accountant with relevant experience.

In that case the bank would provide:

i. Term loans,

ii. Working capital and

iii. Equity fund finance

For requirements up to Rs 5 lakh, no margins are involved. For needs ranging from Rs 5 lakh to Rs 20 lakh, the margin is set at 10 per cent.

3. State Financial Corporations Offering Specialized SSI Schemes:


These state level financial organizations help in promoting small and medium scale industries through various entrepreneur-friendly schemes such as loans, special and seed capital assistance to suit the needs of various categories of entrepreneurs.

Some of these corporations are listed below:

(i) Andhra Pradesh State Financial Corporation (APSFC)

(ii) Arunachal Pradesh Industrial Development and Financial Corporation (APIDFC)

(iii) Assam Financial Corporation (AFC)

(iv) Bihar State Financial Corporation (BSFC)

(v) Delhi Financial Corporation (DFC)

(vi) Gujarat State Financial Corporation (GSFC)

(vii) Haryana Financial Corporation (HFC)

(viii) Himachal Pradesh Financial Corporation (HPFC)

(ix) Jammu & Kashmir State Financial Corporation (J&KSFC)

(x) Karnataka State Financial Corporation (KSFC)

(xi) Kerala Financial Corporation (KFC)

(xii) The Economic Development Corporation (EDC) of Goa

(xiii) Madhya Pradesh Financial Corporation (MPFC)

(xiv) Orissa State Financial Corporation (OSFC)

(xv) Punjab Financial Corporation (PFC)

(xvi) Rajasthan Financial Corporation (RFC)

(xvii) The Maharashtra State Financial Corporation (MSFC)

(xviii) Uttar Pradesh Financial Corporation (UPFC)

(xix) West Bengal Financial Corporation (WBFC)