Page 317 - DMGT207_MANAGEMENT_OF_FINANCES

Management of Finances

Notes (ii) Small Industries Development Bank of India (SIDBI): If you want to establish a small-
scale business unit or industry, loan on easy terms can be available through SIDBI. It also
finances modernization of small-scale industrial units, use of new technology and market
activities. The aim and focus of SIDBI is to promote, finance and develop small-scale
industries.
(iii) National Bank for Agricultural and Rural Development (NABARD): It is a central or apex
institution for financing agricultural and rural sectors. If a person is engaged in agriculture
or other activities like handloom weaving, fishing, etc. NABARD can provide credit, both
short-term and long-term, through regional rural banks. It provides financial assistance,
especially, to co-operative credit, in the field of agriculture, small-scale industries, cottage
and village industries handicrafts and allied economic activities in rural areas.

14.7.2 Non-banking Financial Institutions

Non-banking Financial Companies play an important and crucial role in broadening access to
financial services, enhancing competition and diversification of the financial sector.
NBFCs provide range of financial services to their clients. Types of services under non-banking
finance services include the following:
1. Hire Purchase Services
2. Leasing Services

3. Housing Finance Services
4. Asset Management Services
5. Venture Capital Services
6. Mutual Benefit Finance Services
Non-bank financial companies (NBFCs) are financial institutions that provide banking services
without meeting the legal definition of a bank, i.e. one that does not hold a banking license.
Operations are, regardless of this, still exercised under bank regulation.
The various types of NBFC’s have been discussed below:

Industrial Finance Corporation of India (IFCI)

The main functions of IFCI include:
 Direct financial support (by way of rupee term loans as well as foreign currency loans) to
industrial units for undertaking new projects, expansion, modernization, diversification
etc.

 Subscription and underwriting of public issues of shares and debentures.
 Guaranteeing of foreign currency loans and also deferred payment guarantees.
 Merchant banking, leasing and equipment finance.

State-level Financial Institutions SFCs

SFCs are the State-level financial institutions which play a crucial role in the development of
small and medium enterprises in the concerned States. They provide financial assistance in the
form of term loans, direct subscription to equity/debentures, guarantees, discounting of bills of
exchange and seed/special capital, etc. SFCs have been set up with the objective of catalysing

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