The SBI helps the small units in the following ways:
1. Offers working capital
2. Medium-term Loans and Installment Credit
3. Discounting of bills
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4. Entrepreneur Development Programmes
5. Encouraging Women Entrepreneur
6. Promotion of village and cottage industry
7. Encouraging self-employment schemes
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8. provides technical and financial consultancy services
9. Special Village Industries Division
10. Project putsch.
Let us analyze these points one by one.
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1. Offers Working Capital:
Working capital finance to small industrial units for maintaining the current assets namely raw materials, consumable stores and spares, stock-in- process, finished goods and trade credit receivables are provided by the bank as follows:
(i) Advance against stock by way of hypothecation or pledge of stock.
(ii) Advance against receivables by way of purchase of documentary bills, discount of since bills, purchase of supply bills, etc.
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(iii) Advance to exporters on concessional terms for executing export orders, i.e., packing credit / foreign bills.
(iv) Import and Inland letters of credit.
(v) Guarantees for advance payments, performance, security deposits, etc.
2. Medium Term Loans and Installment Credit:
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The bank provides medium-term loans up to 10 years for the acquisition of plant and machinery either for a new project or for modernization and renovation of existing plant and machinery.
The bank also introduced the Installment Credit Scheme under which the small and medium sized units engaged in approved manufacturing operations are provided finance to purchase equipments.
3. Discounting of Bills:
The bank facilitates the operation of small units by discounting their eligible bills of exchange.
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4. Entrepreneur Development Programmes and Self Employment Schemes:
The bank setup new Entrepreneur Development Programmes for helping educated unemployed persons. The prospective entrepreneurs are provided guidance on selection of projects, preparation of project reports formalities to be completed for setting up new units and for submission of application for financial assistance.
5. Encouraging Women Entrepreneurs:
The bank encourages women entrepreneurs and has organized exclusive training programmes for women entrepreneurs for setting up their own ventures. The bank provides all-round assistance to the women entrepreneurs from identification of products and preparation of project reports to arrangement of forward and backward linkages wherever possible.
6. Promotion of Village and Cottage Industries:
Any industrial unit promoted by artisans (irrespective of its location) or any small undertaking specializing in industrial activity in a village or a small town with a population not exceeding 50,000, involving utilization of locally available natural resources and /or human skills, where the capital requirements do not exceed Rs. 50,000 per unit is deemed as a Village or Cottage Industry.
Need-based finance up to Rs.50, 000 without any margin requirement is made available by the bank to village and cottage industries.
7. Providing Technical and Consultancy Services:
The bank offers consultancy services to small industrialists on various technical matters related to their respective business activities. It also extends advises regarding financial matters.
8. Village Industries Division:
The SBI has also setup “Special Village Industries Division “. It selects the areas where lending is needed and formulates special schemes for such areas.
9. Project Putsch:
The SBI catalyses technology up gradation in select Small and Medium Scale Enterprises clusters. It satisfies the needs of the entrepreneurs in this respect.