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Resource Mobilization — Entrepreneurship STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEntrepreneurshipResource Mobilization5 Marks
Question
Explain the concept of IFCI.
✓

Answer

S.No.
Logo
Details
1.
IFCI
2.
Establishment/ Set-up
IFCI was established as a statutory corporation on 1st July, 1948 by a special Act passed in the Parliament, IFCI Act, 1948. It was converted into a public limited company on July 1, 1993
3.
Purpose
Its main purpose is to provide medium and long term credit to eligible industrial enterprises in corporate sectors of the economy, particularly to those industries to which banking facilities are not available.
4.
Objectives
Objectives:
The primary role of IFCI is to provide direct financial assistance' on medium and long term basis to industrial projects in the corporate and co-operative sectors. The objectives of the corporation are stated below:
  1. To provide long and medium-term credit to industrial concerns engaged in manufacturing, mining, shipping and electricity generation and distribution.
  2. The period of credit can be as long as 25 years and should not exceed that period.
  3. To grant credit to a single concern up to a maximum amount of rupees one crore. This limit can be exceeded with the permission of the government under certain circumstances.
  4. Guarantee loans and deferred payments.
  5. Underwrite and directly subscribe to shares and debentures issued by companies.
  6. Assist in setting up new projects as well as modernization of existing industrial concerns in medium and large scale sector.
  7. Assist project under co-operatives and in backward areas.
5.
Function
The main functions of I.F.C.I. are as under:
  1. Granting loans and advances for the establishment, expansion, diversification and modernization of industries in corporate and co-operative sectors.
  2. Guaranteeing loans raised by industrial concerns in the capital market, both in rupees and foreign currencies.
  3. Subscribing or underwriting the issue of shares and debentures by industries. Such investment can be held up to 7 years.
  4. Guaranteeing credit purchase of capital goods, imported as well as purchased within the country.
  5. Providing assistance, under the soft loans scheme, to selected industries such as cement, cotton textiles, jute, engineering goods, etc.
  6. Providing technical, legal, marketing and administrative assistance to any industrial concern for the promotion, management and expansion of the industrial concern.

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