Q.1 (A) Choose the correct alternative and rewrite the statement.
1. The Small Industrial Development Bank of India (SIDBI) was set up in the year ………
Answer: b) 1990
2. SIDBI was set up under the Small Industrial Development Bank of India Act, ………
Answer: a) 1988
3. ……… is the main financial institution for the promotion of the Micro, Small and Medium Enterprises (MSME) sector in India.
Answer: c) SIDBI
4. ……………….. was established on 12th July, 1982.
Answer: a) NABARD
5. The Committee to Review the Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD) was formed under the leadership of ……………..
Answer: b) Shivaraman
6. The All India Khadi and Village Industries Board was established in the year …………….
Answer: a) 1953
7. KVIC was established in April ………
Answer: c) 1957
Q.1 (B) Match the following pairs.
Group 'A' Group 'B'
A) SIDBI. 1) 1944
B) NABARD. 2) 1990
C) World Bank. 3) 1988
D) Grameen Bank. 4) 1983
E) KVIC 5) 1982
6) 1957
7) 1932
8) 1956
9) 1912
10) 1960
A) SIDBI. 1) 1944
B) NABARD. 2) 1990
C) World Bank. 3) 1988
D) Grameen Bank. 4) 1983
E) KVIC 5) 1982
6) 1957
7) 1932
8) 1956
9) 1912
10) 1960
Answer:
Group 'A' Group 'B'
A) SIDBI. 2) 1990
B) NABARD. 5) 1982
C) World Bank. 1) 1944
D) Grameen Bank. 4) 1983
E) KVIC. 6) 1957
Group 'A' Group 'B'
A) SIDBI. 2) 1990
B) NABARD. 5) 1982
C) World Bank. 1) 1944
D) Grameen Bank. 4) 1983
E) KVIC. 6) 1957
Q.1 (C) Write one word / term for the following statements.
1. The most essential element of business.
Answer: Finance
2. The chief financial institution for development of MSMEs in India.
Answer: SIDBI
3. A guiding and supporting institution for MSMEs.
Answer: SIDBI
4. A wholly owned subsidiary of IDBI established in July 1999, providing venture capital.
Answer: SIDBI Venture Capital Ltd. (SVCL)
5. A digital initiative of SIDBI started on 17th March, 2016.
Answer: SIDBI Startup Mitra
6. The apex body for agricultural finance in India.
Answer: NABARD
7. The economist from Bangladesh known as the Father of Microfinance.
Answer: Dr. Muhammad Yunus
8. A global organisation that provides financial assistance, guidance and research to developing countries.
Answer: World Bank
Q.1 (D) State whether the following statements are True or False.
1. The Small Industrial Development Bank of India was set up on 2nd April, 1990.
Answer: True — The Small Industrial Development Bank of India was set up on 2nd April, 1990.
2. SIDBI has its headquarters in Mumbai.
Answer: False — SIDBI has its headquarters in Lucknow
3. SIDBI does not work towards the sustainable development of MSMEs in India.
Answer: False — SIDBI works towards the sustainable development of MSMEs in India.
4. SIDBI Startup Mitra scheme was launched on 17th March, 2016.
Answer: True — SIDBI Startup Mitra scheme was launched on 17th March, 2016.
5. NABARD was established on 12th July, 1982.
Answer: True — NABARD was established on 12th July, 1982.
6. NABARD is recognised as the apex institution for financing large-scale industries.
Answer: False — NABARD is the apex institution for agricultural and rural development.
7. KVIC is actively involved in the planning, promotion and production of Khadi and village industries in India.
Answer: True — KVIC is actively involved in the planning, promotion, and production of Khadi and village industries.
8. The Father of Rural Banking is known to the Dr. Mohammad Yunus.
Answer: True — Dr. Muhammad Yunus is known as the Father of Microfinance.
9. A Self-Help Group consists of a large number of heterogeneous individuals.
Answer: False — A Self-Help Group consists of a small group of homogeneous individuals.
Q.1 (E) Fill in the blanks.
1. The most vital element of business is ………………..
Answer: The most vital element of business is Finance.
2. MSMEs are the major focus areas of ……………..
Answer: MSMEs are the major focus areas of SIDBI.
3. SIDBI undertakes structural measures to solve financial and non-financial problems of ………………..
Answer: SIDBI undertakes structural measures to solve financial and non-financial problems of MSMEs.
4. SIDBI was established to provide short-term and long-term finance to ………………..
Answer: SIDBI was established to provide short-term and long-term finance to MSMEs.
5. 'SIDBI Startup Mitra' was launched on ………………..
Answer: 'SIDBI Startup Mitra' was launched on 17th March, 2016.
6. To improve access to credit and support services for MSMEs, SIDBI introduced ………………..
Answer: To improve access to credit and support services for MSMEs, SIDBI introduced Udyami Mitra.
7. NABARD was established on ………………..
Answer: NABARD was established on 12th July, 1982.
8. The Khadi and Village Industries Commission was set up in ………………..
Answer: The Khadi and Village Industries Commission was set up in 1956.
9. KVIC is a statutory body created under a special Act of ………………..
Answer: KVIC is a statutory body created under a special Act of 1956.
10. The Grameen Bank of Bangladesh was established in ………………..
Answer: The Grameen Bank of Bangladesh was established in October 1983.
11. The Father of Microfinance is ………………..
Answer: The Father of Microfinance is Dr. Muhammad Yunus.
12. The World Bank was formed in ………………..
Answer: The World Bank was formed in 1944.
13. The headquarters of the World Bank is located in ………………..
Answer: The headquarters of the World Bank is located in Washington D.C..
14. Dr. Muhammad Yunus jointly received the Nobel Prize in ………………..
Answer: Dr. Muhammad Yunus jointly received the Nobel Prize in 2006.
Q.1 (F) Complete the table.
A. B
1) SIDBI. ………………..
2) ……………….. NABARD
3) KVIC. ………………..
4) ……………….. World Bank
5) Grameen Bank. ………………..
(Options: 1957, 1944, 2nd April 1980, October 1983, 12 July 1982)
1) SIDBI. ………………..
2) ……………….. NABARD
3) KVIC. ………………..
4) ……………….. World Bank
5) Grameen Bank. ………………..
(Options: 1957, 1944, 2nd April 1980, October 1983, 12 July 1982)
Answer:
1) SIDBI: 2nd April 1990
2) 12th July 1982: NABARD
3) KVIC: 1957
4) 1944: World Bank
5) Grameen Bank: October 1983
1) SIDBI: 2nd April 1990
2) 12th July 1982: NABARD
3) KVIC: 1957
4) 1944: World Bank
5) Grameen Bank: October 1983
Q.1 (G) Answer in one sentence.
1. What is meant by SIDBI?
Answer: SIDBI stands for Small Industrial Development Bank of India, established for financing and promotion of MSMEs.
2. Explain the meaning of NABARD.
Answer: NABARD is the National Bank for Agriculture and Rural Development, acting as the apex bank for rural credit.
3. What do you understand by Grameen Bank?
Answer: Grameen Bank is a microfinance organization founded in Bangladesh to provide collateral-free loans to the poor.
4. What is a Self-Help Group (SHG)?
Answer: A Self-Help Group (SHG) is a small group of 10-20 homogeneous individuals who come together to save and help each other financially.
5. Define the World Bank.
Answer: The World Bank is an international organization that provides finance, advice, and research to developing nations.
6. What are MSMEs?
Answer: MSMEs are Micro, Small, and Medium Enterprises that form the core focus for development by institutions like SIDBI.
7. What is a Udyami Mitra?
Answer: Udyami Mitra is a digital initiative by SIDBI to improve access to credit and handholding services for MSMEs.
Q.1 (H) Correct the underlined word and rewrite the sentence.
1. SIDBI was established to provide only long-term finance to MSMEs.
Answer: SIDBI was established to provide short-term and long-term finance to MSMEs.
2. NABARD is recognised as the apex institution for industrial finance.
Answer: NABARD is recognised as the apex institution for agricultural and rural finance.
3. Khadi was the symbol and spirit of self-reliance in post-independence India.
Answer: Khadi was the symbol and spirit of self-reliance in pre-independence India.
4. Self-Help Groups are based on the basic principle of earning profit.
Answer: Self-Help Groups are based on the basic principle of mutual help.
5. The World Bank provides high-interest loans.
Answer: The World Bank provides low-interest loans.
Q.2 Explain the following terms / concepts given below.
1. Udyami Mitra
Answer:
- It is a digital initiative launched by SIDBI on 17th March, 2016.
- The main goal is to improve accessibility of credit and support services to MSMEs.
- It operates through an interactive portal called www.udyamimitra.in.
- The platform helps entrepreneurs apply for business loans without visiting banks physically.
- It provides "handholding" services like preparing project reports and financial training.
- The portal matches the requirements of entrepreneurs with the right financial institutions.
- It aims to provide end-to-end solutions for the growth of small businesses.
2. KVIC
Answer:
- KVIC is a statutory body established in April 1957 under the Act of 1956.
- It functions as the apex organization for Khadi and village industries in India.
- The commission works under the Ministry of Micro, Small and Medium Enterprises.
- Its primary objective is the planning, promotion, and production of Khadi.
- It focuses on creating employment opportunities in rural areas.
- The headquarters of KVIC is located in Mumbai.
- It ensures the supply of raw materials and marketing of finished rural products.
3. World Bank
Answer:
- The World Bank is an international organization founded in 1944.
- It provides financial assistance, research, and advice to developing nations.
- Its mission is to reduce poverty and promote shared prosperity globally.
- It consists of two institutions: the IBRD and the IDA.
- The bank offers low-interest loans and grants for education, health, and infrastructure.
- It provides technical assistance and policy advice to various governments.
- The headquarters of the World Bank is located in Washington D.C..
4. Self-Help Group
Answer:
- An SHG is a small, voluntary association of 10 to 20 homogeneous individuals.
- Members come together to save small amounts of money regularly.
- It is based on the principle of "helping each other" and "unity is strength".
- The group creates a common fund from the savings of its members.
- This fund is used to provide small, collateral-free loans to members in need.
- It promotes the habit of thrift and self-reliance among rural people.
- When managed by women, it is commonly known as "Mahila Bachat Gat".
5. Collateral-free loan
Answer:
- It is a type of credit provided without requiring any security or asset as a guarantee.
- These loans are a key feature of the microfinance system.
- They are designed to help poor individuals who do not own property to pledge.
- Self-Help Groups provide these loans to members for emergency or business needs.
- They reduce the dependence of rural people on high-interest moneylenders.
- Banks also offer these loans to MSMEs under specific government schemes.
- Repayment is based on mutual trust and the collective responsibility of the group.
Q.3 Read the following situation and give your opinion.
Anand has completed his MBA and plans to start a Small Scale Industry. He is skilled in using technology and has a strong business idea. He is searching for a lender or investor.
i) Who is the entrepreneur in this case?
Answer:
- Anand is the entrepreneur in this case.
- An entrepreneur is a person who starts a business, takes risks, and uses innovation to create a venture.
- Anand has the required qualification (MBA), skills in technology, and a strong business idea.
ii) What is a full form of SSI?
Answer:
- The full form of SSI is Small Scale Industry.
iii) Suggest any one digital platform to find a lender or investor for this venture.
Answer:
- SIDBI Startup Mitra is a suitable digital platform for Anand.
- It was launched by SIDBI on 17th March, 2016.
- This platform acts as a digital interface to bring together entrepreneurs, lenders, and investors.
- It helps in the "handholding" of start-ups by providing access to credit and support services.
Q.4 Answer in brief.
1. Mention any four features of NABARD.
Answer:
- It is the apex institution in the country for agricultural and rural development.
- It provides refinance facilities to various financial institutions for rural credit.
- It has the power to inspect Cooperative Banks and Regional Rural Banks (RRBs).
- It acts as a coordinator for all rural credit institutions at the field level.
- It maintains a Research and Development Fund to promote research in agriculture.
- It provides long-term assistance to State Governments for agricultural projects.
- It serves as a regulator for institutions providing financial aid to the rural economy.
2. Write any four objectives of KVIC.
Answer:
- To provide employment opportunities in the rural areas of India.
- To produce saleable articles like Khadi and village industry products.
- To create a self-reliant spirit among the people in rural communities.
- To build up a strong rural community through social and economic development.
- To provide training to artisans to improve their production skills.
- To facilitate the marketing of Khadi products in India and abroad.
- To help in the supply of raw materials and tools to rural entrepreneurs.
3. Write any four features of the World Bank.
Answer:
- It is an international organization formed to reduce poverty globally.
- It provides financial assistance in the form of low-interest loans and grants.
- It offers technical advice and research to help countries develop their economies.
- It focuses on critical areas like education, health, and infrastructure.
- It works as a group of two institutions: the IBRD and the IDA.
- It promotes long-term economic growth by fostering income growth in nations.
- Its headquarters are located in Washington D.C., USA.
4. Explain any two features of a Self-Help Group.
Answer:
- It is a small, voluntary association of 10 to 20 homogeneous individuals.
- It is based on the principle of "Helping each other" and "Unity is strength".
- Members save a small amount of money regularly to create a common fund.
- It provides collateral-free loans to its members at reasonable interest rates.
- It promotes the habit of thrift and self-reliance among its members.
- It empowers women and poor sections of society through financial inclusion.
- The management is democratic, and decisions are taken collectively.
5. Explain any two features of SIDBI.
Answer:
- It is the principal financial institution for the promotion and development of MSMEs.
- It provides both financial and non-financial support to small-scale industries.
- It undertakes structural measures to solve the problems of the MSME sector.
- It offers digital platforms like Udyami Mitra to facilitate easy credit access.
- It acts as a coordinator for the functions of various institutions in the same field.
- It provides refinance to banks and other financial institutions for MSME loans.
- It was established on 2nd April 1990 under an Act of Parliament.
Q.5 Give reasons for the following statements.
1. SIDBI functions as a promotional institution for MSMEs.
Answer:
- It was established as the principal financial institution for the promotion and development of the MSME sector.
- It coordinates the functions of institutions engaged in similar activities at the national level.
- It undertakes structural measures to solve both financial and non-financial problems of MSMEs.
- It provides "handholding" support to help new entrepreneurs start and grow their businesses.
- It offers specialized digital platforms like SIDBI Startup Mitra to connect entrepreneurs with investors.
- It works toward the sustainable development of small industries to keep them competitive.
- It promotes technology upgradation and modernization within the MSME sector.
2. SIDBI offers various financial and non-financial services through its subsidiaries.
Answer:
- SIDBI has established several subsidiaries to provide specialized assistance to small businesses.
- SIDBI Venture Capital Ltd. (SVCL) provides venture capital and equity support to MSMEs.
- Micro Units Development and Refinance Agency (MUDRA) was set up to provide funding to the "unfunded" micro-enterprises.
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) provides collateral-free credit facilities.
- SMERA (now Acuité Ratings & Research Limited) provides composite credit ratings for MSMEs.
- These subsidiaries ensure that MSMEs receive targeted help for credit, equity, and rating needs.
- Through these entities, SIDBI covers the entire lifecycle of a business from startup to expansion.
3. NABARD has been recognised as the apex institution for agricultural finance.
Answer:
- It is the highest authority in India for providing credit for agriculture and rural development.
- It provides refinance facilities to State Cooperative Banks and Regional Rural Banks (RRBs).
- It serves as a coordinator for all rural credit institutions at the field level.
- It has the legal power to inspect and monitor the functions of Cooperative Banks and RRBs.
- It manages a Research and Development Fund to improve agricultural techniques and rural credit.
- It assists the State Governments in meeting their long-term credit requirements for agriculture.
- It maintains a direct link with the Reserve Bank of India (RBI) to implement rural credit policies.
4. KVIC plays a significant role in entrepreneurial development.
Answer:
- It plans and promotes the establishment of Khadi and village industries in rural areas.
- It provides training to artisans and rural entrepreneurs to enhance their production skills.
- It helps entrepreneurs by ensuring a steady supply of raw materials and modern tools.
- It creates employment opportunities for people in rural communities through self-employment schemes.
- It builds a self-reliant spirit among rural youth by encouraging small business ventures.
- It facilitates the marketing of finished products through its wide network of "Khadi Gramodyog Bhavans."
- It offers financial assistance through various government-sponsored credit-linked subsidy schemes.
5. Mutual trust is the core strength of SHGs.
Answer:
- Self-Help Groups are based on the principle of "Helping each other" and collective responsibility.
- Members are usually from the same socio-economic background, ensuring a high level of understanding.
- Loans are provided without any physical collateral, relying entirely on the trust between members.
- The group takes collective responsibility for the timely repayment of loans by individual members.
- Decisions regarding savings and lending are made democratically by all members together.
- Peer pressure and social bonding within the group act as a natural guarantee for financial discipline.
- This internal trust allows the poor to access credit that they cannot get from traditional banks.
6. SHGs contribute significantly to women empowerment.
Answer:
- SHGs managed by women (Mahila Bachat Gats) provide them with financial independence.
- They encourage women to save small amounts regularly, building their personal wealth.
- Women gain experience in managing funds, accounts, and leadership through group activities.
- Access to collateral-free loans allows women to start small home-based businesses.
- The group platform gives women a voice to discuss and solve social and economic problems.
- Participation in SHGs improves the decision-making power of women within their families.
- It enhances their self-confidence and status in the local community.
7. The World Bank plays an important role in social development.
Answer:
- It provides financial assistance for critical social sectors like education and health.
- It offers low-interest loans and grants to developing countries to reduce extreme poverty.
- It supports infrastructure projects that improve the standard of living, such as clean water and electricity.
- It provides research and technical advice to governments to help them build stable economies.
- It focuses on environmental protection and sustainable development to benefit future generations.
- It promotes gender equality and social inclusion in all its development projects.
- Its primary goal is to foster income growth for the bottom 40% of the population in every country.
Q.6 Attempt the following questions.
1. Explain the various forms of finance provided by SIDBI.
Answer:
- Direct Finance: SIDBI provides direct financial assistance for the expansion, modernization, and diversification of MSMEs.
- Indirect Finance: It offers refinance facilities to banks and other financial institutions that provide loans to small industries.
- Venture Capital: Through its subsidiary SVCL, it provides equity-based support to innovative and high-growth startups.
- Microfinance: It provides funds to micro-enterprises and small businesses that lack access to traditional banking.
- Bill Rediscounting: SIDBI helps in the rediscounting of bills of exchange to improve the liquidity of small businesses.
- Rehabilitation Assistance: It provides finance for the rehabilitation of sick industrial units in the MSME sector.
- Equipment Finance: It offers loans specifically for the purchase of machinery and equipment for production.
2. Describe the role of SIDBI in sustainable development.
Answer:
- SIDBI promotes eco-friendly technologies and energy-efficient practices within the MSME sector.
- It provides financial assistance for projects that aim to reduce the carbon footprint of small industries.
- It helps MSMEs adopt cleaner production processes to meet international environmental standards.
- It works towards the long-term economic growth of small industries while preserving natural resources.
- It offers specialized credit schemes for the installation of solar power and other renewable energy sources.
- It provides "green finance" to encourage businesses to invest in waste management and recycling.
- It conducts awareness programs for entrepreneurs regarding the importance of sustainable business practices.
3. Explain NABARD's role in financing rural industries.
Answer:
- NABARD acts as the apex bank for providing credit for the development of rural and cottage industries.
- It provides refinance to Cooperative Banks and Regional Rural Banks for lending to rural artisans.
- It creates specific funds like the Rural Infrastructure Development Fund (RIDF) to support rural projects.
- It encourages the development of non-farm sectors like handicrafts and small-scale rural units.
- It coordinates the activities of various agencies involved in rural credit at the field level.
- It provides long-term loans to State Governments for strengthening the infrastructure of rural markets.
- It promotes entrepreneurship in rural areas by providing financial support for training and skill development.
4. State the objectives of KVIC.
Answer:
- The Social Objective: To provide employment opportunities to people in rural areas.
- The Economic Objective: To produce saleable articles and increase the income of rural artisans.
- The Wider Objective: To create a self-reliant spirit among the people and build a strong rural community.
- To ensure a steady supply of raw materials and tools to rural and village industries.
- To promote the use of Khadi as a symbol of self-reliance and national identity.
- To facilitate the marketing of rural products through Khadi Gramodyog Bhavans.
- To provide technical guidance and training for the modernization of village industries.
5. Explain the role of KVIC in generating employment.
Answer:
- KVIC plans and organizes programs for the development of Khadi and village industries in rural pockets.
- It provides self-employment opportunities to local artisans, reducing the migration of people to cities.
- It implements government schemes that offer credit-linked subsidies to new rural entrepreneurs.
- It focuses on labor-intensive industries to maximize the number of jobs created per unit of investment.
- It sets up training centers to equip rural youth with the skills needed to start their own businesses.
- It promotes the production of traditional handicrafts which are a major source of rural livelihood.
- It assists in the establishment of small-scale units that utilize locally available raw materials and labor.
6. Explain in detail the democratic structure of SHGs.
Answer:
- Every member of the Self-Help Group has an equal right to participate in the decision-making process.
- The group usually consists of 10 to 20 members who elect their own leaders or office-bearers.
- Decisions regarding the amount of savings and the distribution of loans are taken collectively in meetings.
- All members are treated as equals, regardless of their social or economic background within the group.
- The management of funds and maintenance of accounts are done transparently with the consent of all members.
- Leadership roles are often rotated among members to ensure that everyone gains experience in management.
- The group functions on the basis of mutual trust and collective responsibility rather than external control.
7. Describe the organisational structure of the World Bank.
Answer:
- It is not a single bank but a group of five closely associated institutions, primarily IBRD and IDA.
- The Board of Governors is the highest decision-making body, consisting of one governor from each member country.
- The Executive Directors are responsible for the general operations and meet regularly at the headquarters.
- The President of the World Bank serves as the chairman of the Board and manages the overall organization.
- It operates through various departments categorized by geographic regions and specific development sectors.
- The organization is headquartered in Washington D.C. and has offices in many member countries.
- It maintains a staff of international experts in economics, policy, and technical fields to guide its projects.
Q.7 Answer the following questions.
1. Explain the important features of SIDBI.
Answer:
- It was established on 2nd April 1990 as the principal financial institution for the MSME sector.
- It functions under the Small Industrial Development Bank of India Act, 1988.
- Its main goal is to promote, finance, and develop micro, small, and medium enterprises.
- It provides both direct and indirect financial assistance to small-scale industries.
- It coordinates the functions of other institutions engaged in similar activities.
- It offers digital initiatives like 'Udyami Mitra' to improve access to credit.
- It works toward the sustainable development and modernization of MSMEs in India.
2. Explain the important features of NABARD.
Answer:
- It is the apex institution for agricultural and rural development in India.
- It was established on 12th July 1982 based on the recommendations of the CRAFICARD committee.
- It provides refinance facilities to Cooperative Banks and Regional Rural Banks.
- It acts as a coordinator and regulator for institutions providing rural credit.
- It maintains a Research and Development Fund to promote better agricultural practices.
- It has the power to inspect and monitor the performance of rural financial institutions.
- It assists state governments in developing rural infrastructure through specialized funds.
3. Explain the important features of KVIC.
Answer:
- It is a statutory body established in April 1957 under the KVIC Act of 1956.
- It functions as the apex organization for Khadi and village industries under the MSME Ministry.
- Its social objective is to provide employment opportunities in rural areas.
- Its economic objective is to produce saleable articles and improve the income of artisans.
- It focuses on creating a self-reliant spirit among rural communities.
- It facilitates the marketing of products through its network of Khadi Gramodyog Bhavans.
- It provides training to artisans and ensures the supply of raw materials and tools.
4. Explain the important features of Self-Help Groups.
Answer:
- An SHG is a small, voluntary association of 10 to 20 homogeneous individuals.
- It is based on the philosophy of "mutual help" and "unity is strength."
- Members contribute small, regular savings to create a common group fund.
- It provides collateral-free loans to its members to meet emergency or business needs.
- It promotes the habit of thrift and financial discipline among the poor.
- The group is managed democratically, and all members participate in decision-making.
- When managed by women, it is popularly known as a "Mahila Bachat Gat."
5. Explain the important features of the World Bank.
Answer:
- It is an international organization formed in 1944 to reduce global poverty.
- It consists of two main institutions: the IBRD and the IDA.
- It provides low-interest loans, credits, and grants to developing nations.
- It offers technical assistance, research, and policy advice to various governments.
- It focuses on long-term economic growth by investing in education, health, and infrastructure.
- Its headquarters are located in Washington D.C., USA.
- Its primary goal is to foster income growth for the bottom 40% of the population in every country.