enterpreneurship 2

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2. G Everyone in the world has at least one talent, one passion, one hobby that can become profitable if used correctly. 3. GEntrepreneur one who organizes, manages and assumes the risks of a business or enterprise "Entrepreneurship is the process of creating or seizing an opportunity and pursuing it regardless of the resources currently controlled" 4. GImpact of entrepreneurial firms Job creation Economic growth New technology Serving small markets 5. G Entrepreneurship Development: Role of Financial Institutions Industrial growth and economic development of developing nations depend to agreat extent on the role played by entrepreneurs. There are many instances ofindividual entrepreneurs whose creativity has led to the industrialization ofmany nations. However, in India the economic and industrial growth was slow due to lack ofefficient entrepreneurs, industrial environment, technical know-how . Government and financial institutions have played a very important role in theentrepreneurship development. 6. s Efforts to Foster Entrepreneurship in India Many of India's leaders have perceived the need for the development of entrepreneurship in their country, and a number of programs have emerged to meet this need. Various agencies participate in entrepreneurial development across India. Such as:- The National Institute for Entrepreneurship and Small Business Development (NIESBUD). The Entrepreneurship Development Institute of India (EDII). Industrial Development Bank of India (IDBI). Small Industries Development Bank of India (SIDBI). North Eastern Development Finance Corporation Limited (NEDFi) RBIs role and steps for the development of SSI sector 7. sThe Entrepreneurship Development Institute of India Sponsored by several financial institutions, namely (ICICI), (IDBI), the Industrial Finance Corporation of India (IFCI), and the State Bank of India. One of the institute that, focuses on creating entrepreneurial personalities among youth. EDII launched a variety of programs to do just that. The Rural Entrepreneurship Development division, for instance, concentrates on rural development, employment generation, and poverty alleviation through the promotion of micro-enterprises. This division also has an informal micro-credit delivery system. 8. s Contd. EDII's entrepreneurship camp involves teenagers from across India coming to the EDII campus for a ten-day period. The program is designed to increase the self-confidence and thereby to develop their concern for enterprise and for achievement. Methodology includes role playing and simulation exercises, with the following objectives in mind: enabling participants to realize their latent potential; developing capabilities by sharpening skills; motivating individuals to seek independent, innovative, and challenging careers; fostering entrepreneurial traits including creativity, concern for excellence, leadership, and problem-solving; providing an opportunity to interact with achievers. 9. s Credit Flow of Commercial Banks to Small Scale Industry(SSI) and Tiny SectorsCredit to ( 1995 1996 1997 1998 1999 in lakhs ) SSI sector 25,8431 29,485 31,542 38,109 42,674(15.29) (15.99)(16.6) (17.5) (17.33) Tiny7,7348,1839,51510,273 NA sector(29.93)(29.93)(30.2) (27.0)Net Bank1,69,038 1,84,381 1,89,684 2,18,219 2,46,203 creditRBI website source 10. SCredit Flow of Commercial Banks to SSI and Tiny Sectors ie,very small sector250000200000150000100000 5000001995 19961997 19981999 SSI Sector Tiny sectorNet Bank credit RBI website source 11. MRole of Small Industries Development Bank of India(SIDBI) SIDBI was established in April 1990 under an Act of Parliament as a wholly- owned subsidiary of Industrial Development Bank of India and as the principal financial institution for the following three-fold activities: Financing the small scale sector by providing: Indirect assistance to primary lending institutions Loans granted by PLIs for new SSI projects and their expansion, technology up gradation,modernization, quality promotion etc. Loans sanctioned by PLIs to small road transport operators, qualified professionals for self-employment, small hospitals and nursing homes and to promote hotels and tourism-relatedactivities. RBI website source 12. Contd Direct assistance to small scale units SSI units for new/expansion/diversification/modernization projects. Marketing development projects which expand the domestic and international marketability of SSI products. Existing well-run SSI units and ancillaries/sub-contracting units/ vendor units for modernization and technology up gradation. Infrastructure development agencies for developing industrial areas. Leasing and hire purchase companies for offering leasing/hire purchase facilities to SSI units. Existing export-oriented units to enable them to acquire ISO-9000 Series Certification Promoting small industries through development and support services; Coordinating the functions of other institutions engaged in similar activities Source: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164. 13. M Growth of Credit Flow from SIDBI to SSI SectorYear Sanction ( inDisbursemen SanctionGrowth of cr) (express t Disbursemen Disburseme permission)(pay outt Gap nt (%)money)1990-2410 1839571-911991-2847 2028819 10.23921992-2909 2146763 5.82931993-3357 2672685 24.51941994-4706 3390131626.87951995-6066 4801126541.62 Source: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164. 14. M Growth of Credit Flow from SIDBI to SSI Sector 8000 7000 6000 5000 4000 3000 2000 1000 0 91 92 93 94 95 96 97 98 --------90 91 92 93 94 95 96 971919191919191919 Sanction(in cr)Disbursement Sanction Disbursement GapSource: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164. 15. Source: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164. MGrowth of Credit Flow from SIDBI to SSI Sector50 41.62 4026.87 30 24.51 2010.23 5.8214.31 100-4.50-10123 456 78-9-9-9 -9-9-9 -9-9 90 9192 9394 959697 19 1919 1919 1919Growth Disbursement(%)19 16. M Role and Steps taken by RBI for the Developmentof SSI Sector Credit to SSI sector is monitored periodically by Reserve Bank of India,Department of SSI and National Advisory Committee of SIDBI, State LevelBankers Committee and District Level Coordination Committees of theBank. The Central Government on the recommendation of RBI has raised theinvestment limit for SSIs from Rs.60 lakhs to Rs.300 lakhs and for tiny unitsfrom Rs.5 lakhs to Rs.25 lakhs. Public sector banks have been advised to make it operational morespecialized SSI branches at centers where there is a potential for financingmany SSI borrowers. To extend 'Single Window Scheme' of SIDBI to all districts to meet thefinancial requirements (both term loan & working capital) of SSIs.Source: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164. 17. MContd.. With a view to moderating the cost of credit to SSI units, banks areadvised to accord SSI units with a good track record the benefits oflower spread over the Prime Lending Rate. In order to take expeditious decision on credit proposals of SSI units,banks have been advised to delegate enhanced powers to the branchmanagers of the specialized SSI branch so that most of the creditproposals are decided at the branch level. Initiatives Announced:- a) Launching of A New Credit Insurance Scheme b) Enhancement of Limit of Composite Loan Scheme c) Enhancement of Limit of Working CapitalSource: CMIE, Money and Banking, Economic Intelligence Service, Sept. 2004, pp. 163-164. 18. M Institutional Network: Finance and Credit in India Long-termShort-term & Agriculture -All India Medium-termCredit Financial-Commercial-Cooperative Institutions BanksBanks (AIFIs)--Regional Rural -NABARD -Regional DFIs Banks ( RRBs) Non-bankingGovernment Non-Govt. FinanceownedOrganisations CompaniesInstitutions/(NGOs) & Micro (NBFCs)Corporations Finance Institutions (MFIs)RBI website source & FICCI Source 19. M All India Financial Institutions(AIFIs) Financial Assistance250000 228570206655 200000 RS IN MILLION 150000103658104484 100000 50000 0 2003-20042004-2005YEAR (April - Septem ber) Sanctions Disbursements(Data Relate to All India Development Banks and Investment Institutions only) Viz. IDBI, IFCI, SIDBI, IIBI, IDFC and LIC, GIC, National Insurance Co. Ltd, New India Ass. Co. Ltd , Oriental Insurance Co. Ltd., United India Insurance Co. Ltd. 20. M ALL FINANCIAL INSTITUTIONS140000012000001000000 RS IN MILLION 800000600000400000200000 0 1999-2000 2000-20012001-2002 2002-2003 2003-2004 YEARSanctionsDisbursements Source : Report on Development Banking in India 2003-04 21. MLong Term Loans by Commercial BanksAmt (in Crs)% of Tot. Credit 160,000 35.00%140,000 30.00%120,000 25.00% 100,00020.00% 80,00015.00%60,00010.00%40,0005.00%20,000- 0.00% Mar-90 Mar-95Mar-00Mar-02 Source : RBI Website YearAmt(Crs)% of Tot. Credit 22. M Long Term Loans by AIFIs140,000 90.0%80.0% 120,000 70.0% 100,000 60.0%80,000 50.0% 60,000 40.0%30.0%40,000 20.0%20,000 10.0% 00.0%Mar-90 Mar-95Mar-00 Mar-02Source: RBI websiteLT Credit % to totalcredit 23. MComparative Chart in Rs cr180,000 Rs in crores160,000BanksAIFI140,000120,000100,000 80,000 60,000 40,000 20,000- Mar-90 Mar-95Mar-00Mar-02 Source: RBI website 24. MFICCI STUDY ONLONG TERM FINANCING NEEDS OF THE INDIANINDUSTRY AND THE ROLE OF DEVELOPMENT FINANCIAL INSTITUTIONSIN PROMOTING Entrepreneurship IN VARIOUS INDUSTRIAL SECTOR Survey conducted Feb March 2004, elicited(factual) response from 248 companies with a wide geographical and sectoral spread The companies which participated in the survey ranged from Rs. 1 million to 5000 million The Survey represents a wide array of activities and includes sectors such as paper, cement, autom