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▪ Providing training facility for these entrepreneurs.

▪ Linkage with banks for financial assistance

▪ Follow-up and monitoring the progress

Under soft loan, SIDBI provides long-term loan repayable in a period of 15 to 20 years with a very low
rate of interest.

Non finance services:

Under this scheme, SIDBI undertakes with the help of other institutions marketing survey and the
potentialities of small scale industries in the particular area. Wherever possible, it helps in the
procurement raw materials.

Factoring, Leasing and HP finance:

In factoring services, SIDBI finances 80% of the bills to the seller and after obtaining the remaining 20%
balance, it repays to the seller and for this service it obtains a factoring commission.

Leasing:

After the increase in the fixed capital limit of Rs. 1 crore to SSI, there has been increasing demand
for leasing equipment. The small scale industries have expanded their activities as lease finance
institutions have enabled them to obtain costly equipment which are otherwise, not possible within the
purview of small scale industries, In fact, this has helped them in modernizing their industry.

HP finance:

Hire purchase financing has also helped small scale industries in acquiring machinery of a higher value.
In fact, certain machinery are even imported from foreign countries on a deferred payment basis.

Assistance to other financial institutions:

In every State, State Finance Corporations have been promoted for financing small scale industries. They
are under the control of respective state governments. At the national level, a separate corporation is
promoted for financing small scale industries called National Small Scale Industries Corporation. This
was started in 1995 to promote, aid and ensure faster growth in small scale industries.

Automatic finance scheme:

Refinance facilities under automatic finance scheme is also provided which was initially for Rs. 50 lakhs.
Now with the increase in the capital limit of small scale industries, this finance scheme has also
increased its limit to Rs. 2 crores.

Modernization: