Question

institutional agencies grant financial assistance to small scale industries for
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Answer 1

IDBI provides guarantees to banks and other financial institutions for loans made to small-scale units. The guarantee extends to 75 per cent of the amount in default or the amount guaranteed whichever is lower. IDBI also provides assistance to NSIC for the supply of machinery on hire-purchase basis.

Answer 2

Institutional agencies grant financial assistance to small scale industries for:

1. Participation in equity capital - Institutional agencies give financial assistance to small scale industries for purchasing shares of the company or partial financing of the ownership.
2. Acquisition of fixed assets- The financial assistance can also be for purchasing or transfering or capitalising fixed assets.
3. Working capital assistance -Assistance could also be for the purpose of paying salaries or carrying out daily activities.