PRATICAL NO – 8

Name – Hardik Kishor Khond

Class -TYCE Roll no - 22 Batch - B
Subject - Entrepreneurship Development (22032)

Title: - Compile the information from the government agencies that will help you set up your
business enterprise.

1. Small Industries Development Bank of India (SIDBI)?

 Small Industries Development Bank of India (SIDBI) is the apex regulatory body for overall licensing
and regulation of micro, small and medium enterprise finance companies in India. It is under
the jurisdiction of Ministry of Finance , Government of India headquartered at Lucknow and having its
offices all over the country.The SIDBI was established on April 2, 1990, by Government of India, as a
wholly owned subsidiary of IDBI Bank . It was delinked from IDBI w.e.f. March 27, 2000. Its purpose is
to provide refinance facilities to banks and financial institutions and engage in term lending and working
capital finance to industries, and serves as the principal financial institution in the Micro, Small and
Medium Enterprises (MSME) sector. SIDBI also coordinates the functions of institutions engaged in
similar activities. It was established in 1990, through an Act of Parliament.
 SIDBI is one of the five All India Financial Institutions regulated and supervised by the Reserve Bank of
India; other four are Exim Bank Of India, NABARD,NABFID and NHB. But recently NHB came under
government control by taking more than 51% stake. They play a statutory role in the financial markets
through credit extension and refinancing operation activities and cater to the long-term financing needs
of the industrial sector.
 SIDBI is active in the development of Micro Finance Institutions through SIDBI Foundation for Micro
Credit, and assists in extending microfinance through the Micro Finance Institution (MFI) route.Its
promotion & development program focuses on rural enterprises promotion and entrepreneurship
development.
 In order to increase and support money supply to the MSE sector, it operates a refinance program
known as Institutional Finance program. Under this program, SIDBI extends Term Loan assistance to
Banks, Small Finance Banks and Non-Banking Financial Companies. Besides the refinance operations,
SIDBI also lends directly to MSMEs.
.

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 2. National Alliance of Young Entrepreneurs (NAYE)

This isanational organization of young entrepreneurs of the country, which-

 Looks in to the interestsof young entrepreneurs

 Takes special care of the interests of women entrepreneurs.
Some of the major achievements of NAYE are:

 Establishing its credibility in both governmental and non-governmental circles

as a highly professional, competent, effective and efficient non-governmental
organization representing small and medium enterprises.

Establishing its effective presence in the area of international cooperation in

NATIONAL ALLIANCE OF YOUNG ENTREPRENEURS (NAYE)

NAYE has arranged several schemes of entrepreneurial development in collaboration with public sector
banks such as Bank of India, Dena Bank, Punjab National Bank, Central Bank of India and Union Bank of
India.
The objectives of the schemes are the following:
1. Help young entrepreneurs’ in identifying investment and self-employment opportunities.
2. Secure proper arrangement for their training.
3. Provide necessary financial assistance on the basis of project reports.
4. Secure package of consultancy services.
5. Arrange for getting assistance, facilities and incentives extended to entrepreneurs by the government
and other institutions.

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 3. MUDRA (Micro Units Development and Refinance Agency Bank):

 The formation of the agency was initially announced in the 2015 Union budget of India in February 2015. It
was formally launched on 8 April.
 The MUDRA banks were set up under the Pradhan Mantri MUDRA Yojana scheme. It will provide its services
to small entrepreneurs outside the service area of regular banks, by using last mile agents. About
5.77 crore (57.6 million) small business have been identified as target clients using the NSSO survey of 2013.
Only 4% of these businesses get finance from regular banks. The bank will also ensure that its clients do not
fall into indebtedness and will lend responsibly.
 MUDRA has been initially formed as a wholly owned subsidiary of Small Industries Development bank of India
(SIDBI) with 100% capital being contributed by it. Presently, the authorized capital of MUDRA is 1000 crores
and paid up capital is 750 crore, fully subscribed by SIDBI. More capital is expected to enhance the functioning
of MUDRA.
 This Agency would be responsible for developing and refinancing all Micro-enterprises sector by supporting
the finance Institutions which are in the business of lending to micro / small business entities engaged in
manufacturing, trading and service activities. MUDRA would partner with Banks, MFIs and other lending
institutions at state level / regional level to provide micro finance support to the micro enterprise sector in the
country.

The bank will classify its clients into three categories and the maximum allowed loan sums will be based on the
category:

 Shishu (शिशुु): Allowed loans up to ₹50,000 (US$630)

 Kishor (शिशुु र): Allowed loans up to ₹5 lakh (US$6,300)
 Tarun (तरुण): Allowed loans up to ₹10 lakh (US$13,000)
Government has decided to provide an additional fund of ₹1 trillion (US$13 billion) to the market and will be allocated as

 40% to Shishu
 35% to Kishor
 25% to Tarun
Those eligible to borrow from MUDRA bank are

 Small manufacturing unit

 Shopkeepers

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 4. Pradhan Mantri Mudra Yojana

PM Modi launched Pradhan Mantri Mudra Yojana, wherein Micro Units Development and
Refinance Agency Bank or MUDRA Banks provide loans at low rates to micro-finance
institutions and non-banking financial institutions, who in turn provide low-interest loans to
startups and MSMEs. Hence, Pradhan Mantri Mudra Yojana is one of its kind fund of funds,
devisedandconceptualizedtoempowerIndianentrepreneurs.LoansuptoRs10lakhcanbe availed
under the MUDRA scheme. It was launched in 2015 and within 2 years, more than
1.8crorejobsweregeneratedduetotheloansandbusinessgeneratedviaMUDRA.Till August 14th,
2020, more than 67 lakh loans amounting to Rs 48,000 crore have been sanctioned under the
MUDRA scheme.

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  QUESTIONS

HOW GOVERNMENT HELPES TO PROMOTE BUSINESS ?

1. Regulatory Environment: Governments create a conducive regulatory environment by enacting

laws that protect property rights, ensure fair competition, and establish clear rules for business
operations.

2. Tax Incentives: Governments offer tax breaks and incentives to encourage business investment,
innovation, and job creation. These incentives may include tax credits, deductions, or exemptions
for specific industries or activities.

3. Infrastructure Development: Governments invest in infrastructure such as roads, bridges, ports,

and utilities, which are essential for businesses to operate efficiently and access markets.

4. Access to Finance: Governments provide financial support through loans, grants, and loan
guarantees to help businesses access capital for startup costs, expansion, and research and
development.

5. Education and Training: Governments support workforce development through education and
training programs to ensure businesses have access to skilled workers and to enhance overall
productivity.

6. Trade Policies: Governments negotiate trade agreements and remove barriers to international
trade, facilitating access to foreign markets and promoting exports.

7. Research and Development (R&D) Support: Governments fund research institutions and
provide grants or tax incentives for private sector R&D to encourage innovation and technological
advancement.

8. Small Business Support: Governments offer assistance specifically tailored to small and
medium-sized enterprises (SMEs), including access to financing, procurement opportunities, and
business advisory services.

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