FINANCING OF SMALL SCALE INDUSTRIES SSI BY J&K BANK Yasir Yousoof Mir , MBA-USB Priyanka Panday, Research Scholar,USB,Chandigarh university Dr. Sajjan Chaudhary,Associate professor,Chandigarh university Abstract The study was conducted in Jammu and Kashmir bank and has special implications for J & K bank in long run. The reason behind the financing of small scale industries in special reference to J & K Bank has to be briefly analysed in order to bring out certain judicious justifications. OBJECTIVES: Objectives of this study to find out the key role of J&K bank in financing SSI units with special focus on challenges faced by SSI in availing credit facility and the satisfaction level of SSI holders with J& K bank. The study is related to the role played by the J&K Bank Ltd in financing the small-scale industries operating in Kashmir to ascertain how far the bank has succeeded in fulfilling the working capital financial requirements of these industries and what factors influence the loan disbursement to small‐scale industries METHOD/STATISTICAL TOOL: Primary data was collected through structured questionnaire and secondary data was used from internet. The data collected is raw and it is compiled, classified, tabulated and then analyzed using financial techniques and statistical tools. The data collected was analysed with the help of using Microsoft Excel APPLICATION: This study was being undertaken and helps us to explore future prospects of the topic. Keywords: SSI units, J&K bank, Kashmir, credit facilities 1. Introduction: The industrial sector plays an important role in the economic growth of both developed and developing countries. The Small-Scale Industrial (SSI) sector is very important for any country irrespective of the level of development because, SSI contributes maximum socio- economic benefits with low level of investment and results in employment creation, income generation, and poverty alleviation and restricts migration of unemployed and underemployed workers into cities. It is also one that maximizes the utilization of local Pramana Research Journal Volume 8, Issue 4, 2018 ISSN NO: 2249-2976 https://pramanaresearch.org/ 148
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FINANCING OF SMALL SCALE INDUSTRIES SSI BY J&K BANK
Yasir Yousoof Mir , MBA-USB
Priyanka Panday, Research Scholar,USB,Chandigarh university
Dr. Sajjan Chaudhary,Associate professor,Chandigarh university
Abstract
The study was conducted in Jammu and Kashmir bank and has special implications for J & K
bank in long run. The reason behind the financing of small scale industries in special
reference to J & K Bank has to be briefly analysed in order to bring out certain judicious
justifications.
OBJECTIVES: Objectives of this study to find out the key role of J&K bank in financing
SSI units with special focus on challenges faced by SSI in availing credit facility and the
satisfaction level of SSI holders with J& K bank. The study is related to the role played by
the J&K Bank Ltd in financing the small-scale industries operating in Kashmir to ascertain
how far the bank has succeeded in fulfilling the working capital financial requirements of
these industries and what factors influence the loan disbursement to small‐scale industries
METHOD/STATISTICAL TOOL: Primary data was collected through structured
questionnaire and secondary data was used from internet. The data collected is raw and it is
compiled, classified, tabulated and then analyzed using financial techniques and statistical
tools. The data collected was analysed with the help of using Microsoft Excel
APPLICATION: This study was being undertaken and helps us to explore future prospects of
the topic.
Keywords: SSI units, J&K bank, Kashmir, credit facilities
1. Introduction:
The industrial sector plays an important role in the economic growth of both developed and
developing countries. The Small-Scale Industrial (SSI) sector is very important for any
country irrespective of the level of development because, SSI contributes maximum socio-
economic benefits with low level of investment and results in employment creation, income
generation, and poverty alleviation and restricts migration of unemployed and
underemployed workers into cities. It is also one that maximizes the utilization of local
Pramana Research Journal
Volume 8, Issue 4, 2018
ISSN NO: 2249-2976
https://pramanaresearch.org/148
resources and results in innovations, new technology and is a pathway to emerging
entrepreneurs. It is a starting point for industrial growth.
The Department of Industries & Commerce has a history of hundreds of years. However, the
department was organized in the systematic manner after independence. The last official
document available in the department is of year 1945. Since then Department is continuously
making efforts to promote and develop industrial activity in the state of Jammu & Kashmir.
The Department provides authorization to consultancy set up by unemployed but skilled and
educated youth. At present there are about twenty two consultancy units functioning under
the said departmental authorized to encourage new entrepreneurs to establish new industrial
units. The department has the following approach & strategy to augment industrial activities.
i) Rehabilitation of potentially viable sick industrial units.
ii) Enabling manufactures of quality consistent products to augment their sales within and
outside the state by brand promotion.
iii) Export promotional measures to augment export of products of the state outside the
country.
iv) Environment protection, to conform to state, national & global regulations.
v) Entrepreneurship development in the state, to provide opportunities to educated but
unemployed.
vi) To encourage research and development.
Previously the definition of SSI was any industrial unit in which the investment in fixed
assets in plant and machinery does not exceed Rs 10 lakh but after the enactment of MSME
Act 2006 from in order to ensure the balanced developed of the industrial sector throughout
the country. Under this act the erstwhile “Industry” has been replaced by the nomenclature
“Enterprise” and this has been done with the view to emphasise the importance of service
sector. The act has classified the enterprises into two categories:
1) Enterprises doing manufacturing of goods
2) Enterprises providing services
Manufacturing industries have been defined in terms of investment in machinery and
equipment as under and further classified into:
MICRO ENTERPRISES INVESTIMENT UPTO RS. 25.00 LACS
SMALL ENTERPRISES INVESTIMENT ABOVE RS.25.00 LACS UPTO
RS. 5 CRORE
MEDIUM ENTERPRISES INVESTIMENT ABOVE RS.5.00 CRORE UPTO
RS. 10.00 CRORES
Pramana Research Journal
Volume 8, Issue 4, 2018
ISSN NO: 2249-2976
https://pramanaresearch.org/149
2. Review of literature:
Nayak and Purusottam (2015) conducted a similar study in north east part of India to find out
the challenges of SSI units. Researchers explained the various aspects of entreprenureship in
these states. Government is promoting this at bigger leel but in line with the earlier studies,
they also concluded the lack of technical assistance and credit facilities as a one of the biggest
challenges. Magnus Magnusson et.al (2012) conducted a study on financing SSI and
concluded that low credit worthiness make these units vulnerable for denial of credits and
even difficult for government to finance fully. One suggestion was also given by the author to
make use of institutional investors for the same purpose.
Rubayat( 2012) found out that there is a greater need to assess the funding requirement and
should provide a wider access to such unit for financing their projects. Various studies have
shown various challenges faced by these SSI units and most of the studies agreed on to the
point of credit related challenges. Gonzaleset et al. (2001) concluded in his study that
financing the projects of SSI is the most critical factor in Asian countries. Many companies
face liquidity issue and find difficult to operate with their internal funding. Saikia and
hemanta(2011) conducted one study on condition of SSIs post globalaization and concluded
that SSIs have played a very important role in the recent development as far as employment
generation is concerned, contribution is significant.G.T, Fatunla et.al (1999) asserted that
SSI should be given proper technical assistance in order to switch from traditional units to
modern way of production. Their capacity is under utilized as they are still not able to have
access to easy credit.
3. Research methodology
The study is confined to five small scale industries in Kashmir (Handi-Crafts, Sericulture,
Cement, Khadi and Food Processing industries). The study is related to the role played by the
J&K Bank Ltd in financing the small-scaleindustries operating in Kashmir to ascertain how
far the bank has succeeded in fulfilling the working capital financial requirements of these
industries and what factors influence the loan disbursement to small‐scale industries
3.1 scope of the study
Pramana Research Journal
Volume 8, Issue 4, 2018
ISSN NO: 2249-2976
https://pramanaresearch.org/150
This study is confined to five small scale industries (Handi-Crafts, Sericulture, Cement,
Khadi and Food Processing industries), operating in the Kashmir division. This study is
related to the role played by The Jammu & Kashmir Bank in financing the small-scale
industries in Kashmir.
3.2 Objective of the study
The various objectives of the study are:
To study the key role of J&K Bank in financing SSI.
To study the problems faced by small scale industries in availing the credit
facility.
To Study the level of satisfaction of SSI’s holders with J&K bank
regarding the financial help provided by the bank.
To find out the present requirements of financing products by SSI’s.
To study the incentives provided by the Department. Of Industries &
Commerce J&K for SSI, s in the Valley.
3.3 Sampling and data collection
Survey method and personal interview is used to collect data from the randomly selected five
small scale industries by using the close‐ended structured questionnaire. This study is
empirical and mostly depends on primary data. Study is based on the various data provided
by bank officials and data from research literature is thoroughly studied and interpretations
made thereof. Primary data has also been collected from anonymous bank staff. The
responses of all the questions in the questionnaire were tested by using the five-points Likert
scale.
3.4 sample size
In the study the sample size was 60, the respondents were selected from different regions
across the valley. For the study I have targeted respondents from major areas.
These areas were selected for the data collection due to certain reasons. Here I have easy
access to the targeted people, easily targeted different income group respondent. The target
respondents were Entrepreneurs, Managers and employees of SSI’s. I have targeted
respondent from different Managerial levels and occupations. The technique of sampling
used is Simple Random Sampling
3.4 sources of data
Pramana Research Journal
Volume 8, Issue 4, 2018
ISSN NO: 2249-2976
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Primary data was collected through structured questionnaire and secondary data was used
from internet and other internal sources of company. Additionally many finance blogs were
consulted including some books and some journals, pump-lets published by DIC as well.
Some research papers on financing of small scale industries also proved to be of very great
help.
3.5 Data analysis method
The data collected is raw and it is compiled, classified, tabulated and then analyzed using
financial techniques and statistical tools. Graphs and charts are used to highlight the statistics.
Based on this data and analysis, inferences were drawn.
4. Data analysis
The data collected was analysed with the help of using Microsoft Excel
Pie Chart
Bar Chart
Mean
1: Age of the industry [SSI unit financed by jk bank?
0-10yrs 10-20yrs 20-30yrs 30-40yrs Above 40yrs
15 6 29 7 3
2: Investment in the industry for establishment of the unit?