Small Scale Businesses or industries need better support and financial aid in order to have proper growth and flourish well in the face of stiff competition from companies or organisation that are privately funded or have an established presence in the market.
Financing provided by the government is preferred because of lower rates available under government schemes. Such loans also help out in managing the day-to-day funding requirements of a business. There are many public sector banks which work in tandem with various government organisations to provide loans under government-aided schemes. Some of the prominent names are State Bank of India, Andhra Bank and Bank of Baroda, among others.
There are many different facilities as per which loans or financing options are available to small scale businesses and their entrepreneurs. Some of the more popular ones are as follows
The aforementioned banks have a variety of schemes under which operating finance is provided to small businesses. An overview of such schemes as per specific banks is mentioned below.
Some of its funding schemes for businesses other than agriculture are as follows
Apart from banks which provide financial support to small business through special loan schemes, the government of India has also set up schemes and makes use of different associations in order to zero in on businesses which might require financial support. Most of the programmes initiated by the government are implemented through the following organisations
It serves to promote and helps in development of small scale industries. The major functions of this entity are as follows
Advising the government on new schemes for small scale industriesConducting surveys on the small scale industry sector and ascertaining key growth factors
Liaison with central ministry, planning commission, state governments, financial institutions and other organisations related to the development of small scale businessesHelping in linking small scale industries to large and medium scale industriesDevelopment of human resources through training and skill upgrades
For the above-mentioned functions, some of the schemes put forth by SIDO are as follows
Credit Linked Capital Subsidy Scheme for Technology Upgradation
Credit Guarantee Scheme
ISO 9000/ISO 14001 Certification Reimbursement Scheme
Integrated Infrastructure Development (IID Scheme)
SSI MDA Scheme
Assistance to Entrepreneurship Development Institutes
Micro Finance Programme
Established to provide specially tailored schemes that facilitate
Marketing support through promotion and other contemporary means of marketingCredit support through functions like
Raw material procurement financing
Marketing activities financing
Bank-syndication aided financing
Performance and credit rating system
Technology support which allows material testing, implementation of new techniques, energy and environment services and training facilities
Established in 1990, this institution is by far the most popular one when considering the growth and development of small businesses. The schemes provided by SIDBI are as followsDirect Assistance SchemeIndirect Assistance SchemePromotional and Development ActivitiesNational Equity Fund, SchemeTechnology Development and Modernization Fund SchemeSingle Window SchemeMahila Udyam Nidhi (MUN) Scheme and Equipment Finance Scheme
It promotes mainly agro-based rural businesses. The financial aid offered by NABARD is extended mainly to cottage and village industries
It is the only non-government organisation for SMEs in India. Apart from promoting the development of small and medium businesses in the country, it also provides some subsidised schemes for the growth of rural industries
Apart from the national schemes and organisations mentioned in here, there are also separate entities and schemes set up by many state governments whose focus is aimed at supporting and aiding industries and businesses exclusive to particular states and regions.