FINANCIAL INCLUSION AND ITS IMPACT ON DALIT ENTREPRENEURS

Dr. C. Paramasivan Assistant Professor & Research Supervisor,

P. Mari Selvam

Ph.D (F.T) Research Scholar, PG & Research Department of Commerce,

Periyar EVR College, Tiruchirappalli 620 023. Tamilnadu. Email: pmariselvam1986@gmail.com Cell: 9976037879

Abstract

Financial inclusion is an innovative concept which makes alternative techniques to

promote the banking habits of the rural people because, India is considered as largest rural

people consist in the world. Financial inclusion is aimed at providing banking and financial

services to all dalit entrepreneur, transparent and equitable manner at affordable cost. The

financial assistance provide from the commercial banks through subsidies from Government.

These financial institution is available from the loans and subsidies in the enterprise to promote

the Tamilnadu Industrial Investment Corporation is helpful to dalit entrepreneurs. This paper is

an attempt to analysis the performance of financial inclusion and its impact on dalit

entrepreneurs.

Key words:

Financial inclusion, banking services, Subsidies from Government, Dalit entrepreneurs,

Financial Inclusion

Financial inclusion operates the economic development it is associated with faster growth

and better income distribution while at the social level it lends its weight to the dimension of

social empowerment enables the poor to escape the ossified social structure. The banking sector,

if considered in isolation, also, reaps rich dividends as financial inclusion enables them to meet

the credit needs of the economy in most apposite manner. Financial inclusion is derivative of

funds utilise the business process. These activities are analysed form the dalit entrepreneurs.

These derivatives of funds used to us and impacts of the financial assistance and inclusion using

the dalit entrepreneurs.

Dalit Entrepreneurs

Dalit owned a business and their involve in the business activity is called dalit

entrepreneurs, Dalit entrepreneurs have been socio-economic exploitation to low income

generating occupations. The fund was envisaged as a way to finance the expansion and

modernization of dalit-run businesses and also fund prospective dalit entrepreneurs. What

grabbed the dalit entrepreneur’s attention was a new principle. Under existing schemes for

scheduled castes, the state has been the giver and the community the recipient. Now, dalit

entrepreneurs need not worry about collateral and make rounds of banks, as we have our own

venture fund.

Financial services to TIIC

Tamilnadu Industrial Investment Corporation Ltd. [TIIC] is a premier State Financial

Corporation established in the year 1949. The Tamilnadu Industrial Investment Corporation

Limited (TIIC) is a Government Company incorporated under The Companies Act. TIIC is

considered as one of the State Financial Corporations for extending financial assistance towards

creation of fixed assets for starting new industrial units as well as for expansion, modernization

and diversification of existing units as well as working capital term loan assistance. Lending to

service sector projects like hospitals, hotels, convention centres, commercial complex etc., are

also considered.

While TIIC provides assistance to micro, small, medium and large enterprises, about 90%

of the assistance goes to the micro, small and medium enterprises [MSME] sector. Of this, about

40% goes to first generation entrepreneurs. Thus, TIIC acts as a catalyst for industrial promotion

within the State by creating a new generation of entrepreneurs. TIIC has so far assisted 1,11,823

units with a cumulative sanction of Rs.9,412.99 cores up to 31.03.12.

Table No. 1 - Performance of the Corporation

Sl.No Particulars 2011 - 12 2010 - 11 2009-10 1. Sanction 80,097 93,925 66,813

2. Disbursements 70,294 73,559 57,027

3. Principal Outstanding 1,34,838 1,22,075 1,01,910

4. Recovery 77,676 70,927 49,488

5. Net Profit for the year 4,840 5,282 4,484

6. Capital Adequacy Ratio ( %) 17.39 15.88 13.72

7. Gross NPA ( % ) 6.66 10.80 15.91

8. Net NPA (% ) 2.98 3.51 3.35

Source : TIIC Annual Report on 2011-12.

Type of Assistance:

i. TIIC offers long and medium term financial assistance to various industries including

service sector in the following forms:

� Term Loans

� Term Loan and Working Capital Term Loans under the Single

� Window Scheme.

� Special types of assistance like Bill Financing Scheme, etc.

ii. Schemes Operated :

a) Scheme for Economically Backward Entrepreneurs:

� Entrepreneurs Development Scheme (EDS) – New scheme for the

� economically weaker section entrepreneurs.

b) Schemes for Manufacturing Enterprises

� General Scheme for New and Expansion Project

� Micro Small Enterprises Funding Scheme (MSEF)

� Single Window Scheme (SWS)

� Equipment Finance Scheme (EFS)

� Restricted Technology Up gradation Fund Scheme (RTUF) for Textile

� Industry

� Open Term Loan (OTL)

� Working Capital Term Loan (WCTL) for Rice Mills and

� Manufacturing Unit

� Scheme for take over of loans from other Financial Institutions.

c) Schemes for service Enterprises

� Information Technology Project

� Hotel Project

� Hospital Project (My Doctor / Doctor Plus)

� Commercial Complex

� Marriage Hall / Community Centre / Convention Centre

� Warehouse / Cold Storage

Financial assistance under New Entrepreneur cum Enterprise Development Scheme

(NEEDS) for Micro & Small Enterprises (MSEs) has been introduced by the State Government

to enable educated youth to become first generation entrepreneurs. Financial assistance is

provided through Banks / TIIC for eligible candidates under this scheme. Entrepreneurs are

eligible for 25% capital subsidy and 3% interest subvention under the NEEDS.

Quantum of Loan Assistance:

TIIC provides Term Loan assistance normally upto a maximum of Rs.1500 Lakhs to

Proprietary and Partnership concern. In respect of Limited Companies normally a maximum

term loan assistance of Rs.3000 Lakhs can be considered. However, higher loan assistance may

also be considered for bigger projects on a case to case basis. TIIC has 6 Regional Offices, 25

regular Branch Offices and 5 Field Offices spread all over Tamilnadu. The Board of TIIC has

delegated appropriate powers for sanction of loans to the Branch Manager, Branch Sanction

Committee (BSC) and Regional Loan Sanction Committee (RLSC), Executive Committee and

the Board.

Rate of Interest:

The rate of interest for the term loan for the current year is in the range of 14.50 % p.a. to

16.00 % p.a based on the quantum of loan and nature of industries. The Corporation will modify

the interest rate for all loans every year based on its cost of funds. Rate of interest presently

charged for the schemes operated

Subsidies from Government :

TIIC is the implementing agency for various capital subsidies of State Government in

respect of its assisted units. TIIC is also the nodal agency for select Central Government

Subsidies like Credit Linked Capital Subsidy, Food Processing Subsidy etc, in respect of its

assisted units. TIIC gives subsidy bridge loans against eligible subsidies to the eligible units

assisted by it, helping them to implement their projects on schedule.

i) State Government Subsidy

Following Incentives and Concessions provided by Tamilnadu Government :

� Capital Subsidy

� Additional Capital Subsidy for Women/SC/ST/Physically Handicapped / Transgender

Entrepreneurs

� Employment Incentive subsidy

� Special Capital Subsidy to Thrust Sector Enterprises

� Subsidy Schemes for Agro based Enterprises

� Generator Subsidy

� Back-ended Interest Subsidy

ii) Central Government Subsidy:

� Credit Linked Capital Subsidy (CLCS) for Technology Up gradation

� Restructured Technology Up gradation Fund (RTUF) Scheme for

� Textile units & Jute Industries provided by Ministry of Textiles, New Delhi.

� Food Processing subsidy provided by Ministry of Food Processing

� Industries (MOFPI), New Delhi.

Table No. 2 - Subsidy / Incentives for Micro, Small and Medium Enterprises

Sl.No Subsidy State Capital Subsidy

1. Capital Subsidy 15% on eligible plant and machinery value, subject to a maximum of Rs.30 Lakhs (set up in 251 backward blocks – however micro enterprises are eligible in all areas)

2. Additional Capital Subsidy for select category of Entrepreneurs

Additional Capital Subsidy of 5% subject to a maximum of Rs.2.00 Lakhs to Enterprises located in backward areas / agro based industries & set up by Women / SC / ST / Physically handicapped / Transgender entrepreneurs

3. Employment Intensive Subsidy

Employment Intensive Subsidy of 5% subject to a maximum of Rs.5.00 Lakhs will be granted, if at least 25 workers have been employed for a minimum period of 3 years within the first 5 years from the date of commencement of production for units set up in backward areas / agro based enterprises

4. Subsidy for Agro based Enterprises

Capital Subsidies 1-3 above are extended for setting up of Agro based enterprises in all 385 blocks in the State.

5. Special Capital Subsidy to Thrust Sector Enterprises

notified by the State

Government

Micro / Small / Medium manufacturing enterprises in notified thrust sectors are eligible for 15% on eligible Plant and Machinery subject to maximum of Rs.30.00 Lakhs. Such industries set up anywhere in the State are eligible.

6. Back-ended Interest

Subsidy

3% Back Ended Interest Subsidy to a maximum of Rs.10.00 lakh over a period of five years on loans up to Rs.100.00 lakh for Micro / Small /Medium Enterprises under specific schemes like MSEF Scheme, CLCS eligible technology.

Source : TIIC Annual Report on 2011-12.

Conclusion

Financial inclusion was promote the various number financial services in the society.

Any other people have involve the any other financial activities, so for new schemes for

announced the government. These kinds of activities for properly utilise the dalit entrepreneurs

is not merely utilized. The financial assistance was given by the any other schemes and so for

not active business and other business activities. In case of many more dalit entrepreneurs nor

awareness from the financial services and inclusive growth and development of the financial

inclusion and services. Show that all other dalit entrepreneurs have awareness in the financial

inclusion and inclusive growth and development.

References

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4. Kajal Iyer. (2012). The Dalit Entrepreneur, IBN live Business News.

5. Kajal Iyer. (2012). The Dalit Entrepreneur, IBN live Business News, Nov. 26, pp 1-5.

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Publication, New Delhi.

8. RBI Report 2010-11.

9. Tamilnadu Industrial Investment Corporation Annual Report 2011-12.