Entrepreneurship Development and
Management (DJ19ILO8022)
Semester: VIII (Autonomous)
Common for All Programs
Module 3: Institutions Supporting Entrepreneurs
Academic year: 2024-25
Needs of Institutional Support to Entrepreneurs
o Institutional support plays a crucial role
in fostering the growth and success of
entrepreneurs.
o Effective institutional support helps
entrepreneurs
navigate
challenges,
access resources, and scale their
businesses.
o Key needs for institutional support to
entrepreneurs include:
1. Access to Capital Financial Support
• Funding and Investment: Entrepreneurs need access to venture capital,
seed funding, government grants, or loans to finance their business ideas and
expansion. Financial institutions can provide risk capital, low-interest loans,
or angel investments.
• Tax Incentives and Subsidies: Government support in the form of tax
breaks or subsidies can make entrepreneurship more attractive, helping
reduce the financial burden on entrepreneurs.
2. Mentorship and Advisory Services
• Business Coaching: Providing entrepreneurs
with access to experienced mentors or
industry experts helps them navigate
challenges and learn from others' successes
and failures.
• Strategic Guidance: Institutions can offer
advisory services that help entrepreneurs in
areas like business planning, market
strategies, operations management, and
financial planning.
3. Regulatory Support and Simplification
• Easing Business Registration and Licensing: Institutions can
streamline processes for starting and operating a business by
reducing red tape and offering easy-to-navigate legal
frameworks for registration.
• Regulatory Guidance: Helping entrepreneurs understand and
comply with tax codes, employment laws, environmental
regulations, etc., ensures smooth business operations.
• Protection of Intellectual Property: Support in obtaining
patents, trademarks, and copyrights is essential to ensure
entrepreneurs' innovations are safeguarded.
4. Infrastructure and Technology Support
• Business Incubators and Accelerators:
These provide entrepreneurs with office
space,
shared
services,
networking
opportunities, and access to resources that
may otherwise be unaffordable or difficult to
access.
• Technology and Digital Tools: Facilitating
access to technology platforms, software
tools, and digital infrastructure to help
businesses modernize their operations and
increase efficiency.
5. Networking and Market Access
• Networking Opportunities: Entrepreneurs
need access to networks of potential
partners, investors, clients, and suppliers.
Institutions can host events like business
forums, trade fairs, or networking sessions.
• Market Linkages: Institutional support
can provide market intelligence, access to
new markets, and facilitate partnerships
with larger firms or export opportunities.
6. Capacity Building and Training
• Skills Development: Institutions can offer
training programs to improve entrepreneurial
skills, such as financial literacy, marketing,
and leadership.
• Workshops and Educational Programs:
Providing access to specialized training for
industries like technology, health care,
manufacturing, etc., helps entrepreneurs
build technical and managerial expertise.
7. Legal and Contractual Support
• Contract Enforcement: Legal institutions should
ensure that entrepreneurs have access to legal
frameworks for enforcing contracts, handling
disputes, and protecting their business interests.
• Dispute Resolution: Providing accessible and
affordable mediation and arbitration services
helps resolve conflicts quickly without the need
for lengthy and expensive litigation.
8. Research and Development Support
• Innovation
Grants
and
Partnerships:
Institutions can support research and development
by offering grants or encouraging collaborations
between entrepreneurs and universities or
research organizations.
• Technology Transfer: Encouraging the transfer
of research outcomes from academic institutions
to entrepreneurs can spur innovation and new
product development.
9. Social Security and Insurance
• Entrepreneurial Welfare: Providing health insurance, social security benefits,
or unemployment insurance to entrepreneurs and their employees ensures that
they are protected in times of personal or economic crises.
10. Internationalization and Export Support
• Trade Agreements and Export Assistance:
Supporting
entrepreneurs
with
internationalization, through access to trade
agreements, export promotion agencies, and
assistance in international markets, helps
expand the reach of local businesses.
• Export Finance and Risk Mitigation:
Ensuring entrepreneurs have access to
financial products to help mitigate risks and
finance international sales can open doors to
global markets.
11. Access to Talent and Workforce
• Labor Market Support: Institutions can facilitate
access to skilled labor through education systems,
apprenticeship programs, or talent-matching
services.
• Recruitment Assistance: Providing platforms for
businesses to find the right talent or partnering with
universities to recruit fresh graduates.
12. Government Policies and Advocacy
• Pro-Entrepreneurial
Policies:
Ensuring
that
government policies favor entrepreneurship through
legislation and budget allocations can create a
favorable environment for entrepreneurs to thrive.
• Advocacy and Lobbying: Institutional support
through lobbying efforts can influence government
decisions to improve the entrepreneurial ecosystem.
Effective institutional support builds a robust entrepreneurial ecosystem that helps
businesses scale, reduces operational risks, and accelerates the overall economic
growth of a region or nation.
Institutional Levels
• District Level Institutes
• State Level Institutes
• All India Level Institutes
District Level Institutes
 District Industries Centres (DICs)
 Regional Rural Banks (RRBs)
DIC: District Industries Centre
District Industries Centres (DICs)
Role in Promoting Small Enterprises:
• Grassroots-level support to entrepreneurs.
• Facilitate registration, assistance in availing subsidies, and financial
support.
• Offer various government schemes for micro and small enterprises.
Functions:
• Industrial counseling and guidance.
• Facilitate setting up small enterprises in rural and semi-urban areas.
• Provide training, technical support, and handholding services.
Functions of DIC
Functions of DIC:
 Identification of Entrepreneurs
 Selection of Projects
 Purchase of Fixed Assets
 Assistance to Raw material Supplies
 Subsidy Schemes
 Self-Employment for Unemployed educated youth
Regional Rural Banks (RRBs)
 Confined to Specific Regions
 Financial assistance to Small Farmers, Labours and small
Entrepreneurs
 Assistance in Handicraft and Cottage sectors
 Helps in development of Trade, Commerce, Industries,
Agriculture and other allied Economic Activities
State Level Institutes
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State Financial Corporations (SFCs)
Small Industries Development Organisation (SIDO)
Small industries Service Institutes (SISIs)
Entrepreneurship Development Institute of India (EDI)
Khadi and Village Industries Commission (KVIC)
State Small Scale Industries Development Corporations
(SSIDs)
 Technical Consultancy Organisations (TCOs)
 Small Scale Industries Board (SSIB)
State Financial Corporations (SFCs)
 Long term Finance to Small & Medium Industrial units
 Undertake Issue of stock, Shares, Bonds or debentures
 Grand loan to Small road Transporters, Hospitals, Hotels,
Operators, etc.
Small Industries Development Organisations (SIDO)
 Framing of Policies
 Coordinating
 Monitoring
 Industrial Development
 Extension
Key Functions
• Infrastructure support for industries.
• Financial aid to small entrepreneurs.
• Facilitate industrial estate
implementation.
development
and
policy
Small Industries Service Institutes (SISIs)
 To undertake Economic Consultancy
 To provide Trade & Market Information
 To prepare Project Profile for SSI
 To undertake Modernization
 To conduct training in various Activities/Trade
 To organise EDPs
Entrepreneurship Development Institute of
India (EDI), Ahmedabad
 To provide Professional assistance to other Institutes
 To accelerate the process of Entrepreneurship Development
 To conduct Workshops, Seminars to promote ED
 To conduct Economic Cross-Culture Programmes
 EDPs though Open Learning
Khadi and Village Industries Commission (KVICs)
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To generate employment in Rural areas

Develop entrepreneurship in Rural unemployed Youths

To achieve the goal of Rural Industrialization

To mobilize Bank Finance

To bring Regional Balance

To assist people by providing machinery, procuring Raw materials, etc.
State Small Scale Industries Development Corporations
(SSIDCs)
 To undertake distribution of Scarce R/M
 Supply of Machinery to Entrepreneurs
 Assistance in Marketing of Product
 Construction of Industrial Estate
 Infrastructure Facility assistance
 Seed Capital Assistance
 Management assistance
Technical Consultancy Organisations (TCOs)
 Prepare Project Profile & Feasibility Study
 Market Research & survey for Specific product
 Consultancy service to new Entrepreneurs
 Undertake Industrial Potential Service
 Offer merchant Banking Facilities
 Conduct EDPs
Small Scale Industries Board (SSIB)
 The government of India constituted a board, namely, Small Scale Industries Board
(SSIB) in 1954 to advice on development of small scale industries in the country.
 It is an apex advisory body constituted to render advice to the government on all
issues pertaining to the development of small-scale industries.
 The industries minister of the government of India is the chairman of the SSIB.
 The SSIB comprises of 50 members including state industry minister, some members
of parliament, and secretaries of various departments of government of India,
financial institutions, public sector undertakings, industry associations and eminent
experts in the field.
State Level Institutes
Organization
Role & Objective
Support Provided
Example/Case Study
SFCs (State Financial Corporations)
Provides financial assistance to
SMEs at the state level.
Loans, working capital, and term
financing.
Maharashtra SFC financed MSMEs
in Nashik, boosting agro-industries.
SIDO (Small Industries
Development Organization)
National-level MSME promotion
and policy formulation.
Market assistance, cluster
development, research, training.
Coimbatore textile cluster
benefited from SIDO’s initiatives.
SISIs (Small Industries Service
Institutes)
Technical consultancy and
managerial support.
Business planning, production
techniques training.
Rajasthan artisans improved
handicraft exports.
EDI (Entrepreneurship
Development Institute)
Develops entrepreneurial skills and
promotes self-employment.
Training, incubation support,
business development.
Rural women in Gujarat trained for
food processing startups.
KVIC (Khadi & Village Industries
Commission)
Promotes rural employment
through Khadi and village
industries.
Subsidies, loans, training,
marketing support.
PMEGP scheme helped Assam’s silk
weaving industry grow.
SSIDs (State Small Scale Industries
Development Corporations)
Facilitates infrastructure & market
support for SSIs.
Industrial estate development, skill
programs.
Karnataka SSID boosted local
manufacturing through industrial
estates.
TCOs (Technical Consultancy
Organizations)
Offers technical and managerial
consultancy to MSMEs.
Project feasibility studies,
technology guidance.
Tamil Nadu MSMEs adopted lean
manufacturing techniques.
SSIB (Small Scale Industries Board)
Policy formulation & monitoring
for MSMEs.
Policy recommendations, advisory
support.
SSIB played a key role in MSME Act
2006.
Overview of Small Industry Financing in
Developing Countries
Challenges Faced by Small Entrepreneurs:
• Limited access to finance.
• Lack of credit history or collateral.
• High risk and low confidence from financial institutions.
Support Mechanisms:
• Government programs.
• Financial institutions.
• State and Central-level agencies.
Central-Level Financial Institutions in India
SIDBI (Small Industries Development Bank of India):
• Established in 1990.
• Purpose: Facilitate and promote the growth of small industries.
• Key services: Financial products, credit assistance, and support programs.
• Target sectors: MSMEs, startups, and entrepreneurs.
All India Level Institutes
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NABARD
IDBI
IIE
ICICI
NSCI
IFCI
Commercial Banks
NABARD (National Bank for Agriculture
and Rural Development)
Functions of NABARD
Indian Institute of Entrepreneurship (IIE)
Industrial Credit & Investment Corporation
of India Ltd. (ICICI)
 Variety of Financial service like Credit, Instalment
sales, Asset credit, Venture Capital, etc.
 Loan guarantee for private investors.
 Assistance by way of rupee or foreign currency
loans, underwriting and direct subscription of
Shares/Debentures and guarantees.
National Small Industries Corporations Ltd.
(NSIC)
 Provide machinery to SSI
 Helps in Export Marketing of products of SSI
 Distribution of basic Raw materials among
SSI
 Technology up gradation & implementation
 Impart training in various industrial Trades
 Construction of Industrial estate
 Set up of SSI in other developing countries
Industries Finance Corporation of India Ltd.
(IFCI)
 Interest Subsidy for Women Entrepreneurs.
 Pollution control in Small & Medium
Scale industries.
 Modernization of Small & Medium
Scale industries.
 Subsidy schemes for assisting Small units in
the market.
Commercial Banks
 Credit facilities for SSI
 Assistance for Working
requirements of SSI
capital
 Credit Guarantee Scheme(1960)
All India
Level
Institutes
Single Window System for Entrepreneurs
Government Schemes and Initiatives for
Entrepreneurs
Government Schemes and Initiatives for
Entrepreneurs
• Atmanirbhar Bharat Abhiyan : Boost
entrepreneurship.
for
MSMEs and
local
• Startup India : Tax incentives, funding, and easing compliance.
• MUDRA Scheme : Financial support for micro enterprises.
• PMEGP (Prime Minister’s Employment Generation Programme) :
Assistance for setting up new micro-enterprises.
Case Study: Atmanirbhar Bharat Abhiyan
• Case: Local Manufacturing Boost – Toy Industry in India
• The Indian toy industry was heavily dependent on imports, mainly
from China.
• Under Atmanirbhar Bharat, the government imposed higher import
duties and provided subsidies for local manufacturing. With financial
support and policy changes, MSMEs in Gujarat, Maharashtra, and
Karnataka set up new manufacturing units.
• Companies like Funskool and PlayShifu expanded production,
creating thousands of jobs and reducing reliance on imports. The
sector saw a 30% increase in domestic production, aligning with the
self-reliance vision.
Case Study: Startup India
• Case: Zerodha – A Fintech Success Story
• Zerodha, founded by Nithin Kamath in 2010, revolutionized the Indian
stock brokerage industry.
• Under Startup India, it benefited from tax exemptions and ease of
compliance.
• With its discount brokerage model, Zerodha became India’s largest
stock broker, handling 10+ million users.
• The company disrupted the industry by providing zero-commission
trading and free educational resources, inspiring numerous fintech
startups.
Case Study: MUDRA Scheme
• Case: Women Entrepreneur – Shanti Devi’s Tailoring Business
• Shanti Devi, a tailor from Bihar, struggled to expand her small
business. She availed a ₹50,000 MUDRA Shishu loan, purchasing
a new sewing machine and raw materials.
• Within a year, she employed three more women and doubled her
income. With a Kishor loan (₹3 lakh), she expanded further,
supplying garments to local markets.
• The scheme enabled her financial independence and job creation in
her community.
Case Study: PMEGP
• Case: Rural Bamboo Handicrafts Business in Assam
• A group of unemployed youth in Assam started a bamboo
handicrafts business with PMEGP funding of ₹5 lakh.
• They received 25% subsidy and used the funds for machinery and
training.
• Within two years, their business scaled up, selling products across
India and employing 20+ artisans.
• This initiative helped preserve traditional craftsmanship while
boosting rural employment and income.
Challenges and Opportunities for Small
Industry Financing
Challenges:
• Limited access to credit for small entrepreneurs.
• Lack of awareness of financial products.
• High collateral requirements.
Opportunities:
• Growing digital financing options.
• Government support schemes.
• Innovations in financial inclusion and fintech
solutions.
Conclusion
Key Takeaways :
• India has a well-developed system of financial institutions that support
small and medium enterprises.
• Institutions like SIDBI, NABARD, and IDBI play crucial roles at
both central and state levels.
• The Single Window System and DICs provide entrepreneurs
necessary tools and resources to start and grow their businesses.
with
• Overcoming challenges in accessing finance remains a key focus of both
government and institutional efforts.
Case Study 1: SIDBI and Amul – Dairy Industry
• Entrepreneur/Enterprise: Amul (Gujarat Co-operative Milk Marketing Federation Ltd.)
• Institution Involved: SIDBI (Small Industries Development Bank of India)
Background:
• Amul is a dairy cooperative brand that grew from a small dairy operation in Anand, Gujarat, into one of the
largest dairy brands in India.
• The company was originally struggling with financing for its operations and expansion.
How SIDBI Helped:
• SIDBI provided financial support to Amul for building dairy infrastructure, processing plants, and distribution
networks.
• Financial assistance also helped improve the technology for milk processing, packaging, and refrigeration.
Outcome:
• Amul’s growth was accelerated, and it became a prominent name in dairy products globally.
• The successful financing enabled Amul to grow from a small cooperative into a multi-billion-dollar enterprise,
benefiting millions of farmers.
Case Study 2: NABARD and Rural Entrepreneurs
– Sree Sidhhi Vinayak Agro Industries
• Entrepreneur/Enterprise: Sree Sidhhi Vinayak Agro Industries (Andhra Pradesh)
• Institution Involved: NABARD (National Bank for Agriculture and Rural Development)
Background:
• Sree Sidhhi Vinayak Agro Industries is a food processing enterprise located in rural Andhra Pradesh, focused on
producing high-quality snacks.
• The company was in its nascent stage, struggling with capital for expansion, machinery, and workforce training.
How NABARD Helped:
• NABARD extended credit support under its Rural Entrepreneurship Development Program (REDP).
• NABARD also provided guidance and structured financial solutions to help the company improve its production
capacity and quality control processes.
Outcome:
• The enterprise expanded production, hired more staff, and improved its marketing capabilities, reaching a broader
market.
• It played a key role in rural employment generation and served as a model for other agro-based industries in the
region.
Case Study 3: IDBI and Varun Beverages –
Beverage Industry
• Entrepreneur/Enterprise: Varun Beverages Ltd.
• Institution Involved: IDBI Bank (Industrial Development Bank of India)
Background:
• Varun Beverages is one of the largest bottlers of PepsiCo products in India, operating across several states.
• In the early stages, Varun Beverages faced challenges related to plant setup, distribution, and financing for
expanding its operations.
How IDBI Helped:
• IDBI Bank provided long-term loans and working capital support for the establishment of manufacturing plants.
• Financial assistance from IDBI enabled the company to expand its distribution network and improve logistics and
supply chains.
Outcome:
• Varun Beverages grew to become a major player in the Indian beverage industry, contributing to job creation and
regional economic growth.
• It has diversified into different beverages, making substantial contributions to both the Indian economy and
PepsiCo's market share in India.
Case Study 4: SIDCO and MSMEs in Tamil Nadu
– Auto Parts Manufacturing
• Entrepreneur/Enterprise: XYZ Auto Components (Tamil Nadu)
• Institution Involved: SIDCO (State Industrial Development Corporation of Tamil Nadu)
Background:
• XYZ Auto Components is a small auto parts manufacturer that supplies parts to major automobile brands.
• Initially, the company struggled with acquiring land for factory setup and with accessing finance for procurement of
machinery.
How SIDCO Helped:
• SIDCO provided land in a designated industrial park, giving XYZ Auto Components a strategic location to set up
its manufacturing plant.
• SIDCO also assisted in obtaining state-level subsidies and government-backed loans for infrastructure
development.
Outcome:
• The company grew substantially, establishing itself as a reliable supplier to both local and international automobile
manufacturers.
• The success of XYZ Auto Components created numerous job opportunities in the region and enhanced the local
industrial base.
Case Study 5: DICs and Rural Handicrafts – Artisan
Support in Rajasthan
• Entrepreneur/Enterprise: Rajasthan Handicrafts (Artisan Collectives)
• Institution Involved: District Industries Centers (DICs)
Background:
• Rajasthan Handicrafts is a group of artisans in Rajasthan, specializing in traditional crafts such as block printing,
pottery, and embroidery.
• The artisans had difficulty accessing capital for equipment, raw materials, and marketing their products beyond
the local market.
How DICs Helped:
• DICs provided financial assistance through government schemes and facilitated training programs for skill
enhancement.
• The DICs connected the artisans with national and international markets by organizing craft fairs and exhibitions.
Outcome:
• Rajasthan Handicrafts significantly expanded its market reach, both domestically and internationally.
• The initiative helped preserve traditional craftsmanship while empowering artisans with steady incomes and
better living standards.
Case Study 6: IIE and Youth
Entrepreneurship – Skill Development and
Innovation
• Entrepreneur/Enterprise: Innovators’ Hub (Startup)
• Institution Involved: Indian Institute of Entrepreneurship (IIE), Guwahati
Background:
• Innovators’ Hub is a startup incubator that focuses on mentoring and providing resources to young innovators
and entrepreneurs in the Northeast of India.
• The team faced challenges such as lack of guidance, mentorship, and access to funds for early-stage innovation.
How IIE Helped:
• IIE provided entrepreneurial training and access to networks of mentors, industry leaders, and investors.
• They also assisted in registering the startup and provided necessary legal and financial advice.
Outcome:
• Innovators’ Hub succeeded in launching multiple startups in sectors like technology, agriculture, and clean
energy, contributing to local job creation and regional development.
Conclusion of Case Studies
Key Insights :
• Financial institutions like SIDBI, NABARD, IDBI, SIDCO, and DICs have
played a crucial role in supporting the growth of small industries and
entrepreneurs across India.
• These institutions provide not only financial support but also guidance,
infrastructure, and market access, leading to significant economic and social
outcomes.
• Successful case studies like Amul, Varun Beverages, and Rajasthan
Handicrafts illustrate the transformative potential of government and
institutional support for entrepreneurship.
Q&A/Discussions
Interactive Session:
• Engage the audience by asking them to share their thoughts on
how these case studies reflect the impact of financial institutions
on entrepreneurship.
THANK YOU !