Solution:

(i) Development Banks:

• These institutions provide vital inputs like finance and development assistance.

• IFCI, ICICI, and IDBI are operating at the all-India level whereas SFCs and SIDCs are functioning at the State level. IFCI, ICICI, and IDBI take special interest in promoting entrepreneurship, particularly in backward areas and rural centers through assistance to various institutions, conducting DPI and by providing financial assistance to new entrepreneurs. These institutions also provide active support to other institutions like TCOs, National Science and Technology Entrepreneurship Development Board of India (NSTEDB), Entrepreneurship Development Institute of India (EDII) and other agencies.

• To encourage rural and tiny enterprises, IDBI provides financial support to selected voluntary agencies. Another important step taken by IDBI to encourage entrepreneurship among science and technology graduates is through Science and Technology Entrepreneurship Parks’ (STEPs).

• IDBI also operates Seed Capital Scheme for technically qualified entrepreneurs in the small-scale sector to meet a part of the promoter’s equity capital. Special concessions are given to women, SC/ST, and physically handicapped entrepreneurs.

• IFCI provides risk capital assistance to new entrepreneurs through the Risk Capital Foundation (RCF). In addition to the above, State level financial institutions (SFCs) and developmental institutions (SIDCs) render financial assistance to new entrepreneurs in the respective State.

• Some State governments have also set up State Small Industries Corporations to promote small-scale entrepreneurs. Many states have set up Entrepreneurs.

• Guidance Bureaus, consultancy organizations, Stores Purchase Organizations, State small industries corporations and such other bodies to assist entrepreneurs in their respective areas.

(ii) Commercial Banks:

• Initially, The State Bank of India was the only bank among commercial banks to come out with a comprehensive program for entrepreneurship development.

• From the orthodox role of commercial banks, the State Bank of India pioneered as a premier banking institution in India by assuming the role of a development bank.

• The sixties and early seventies saw many important strides towards the fulfillment of this objective. The bank recognized the importance of small-scale industries in industrial development and started financing small-scale industries on a large scale.

• To cater to the specific needs of this sector, a package of schemes and programs was formulated by the bank.

These are in,

• (i) Liberalized scheme of financing small-scale industries wherein 75 percent of the project cost is met as a bank loan;

• (ii) Entrepreneur scheme for financing technically-qualified persons where the entire project the cost could be financed by way of a term loan; and

• (iii) Equity Fund Scheme for providing an interest-free loan to meet the equity gap up to Rs. 1 lakh.