Financial institutions established by the Central as well as State Governments all over the country to provide finance to business organisations are considered the most suitable source of financing when large funds for longer duration are required for expansion, reorganization and modernization of an enterprise. These institutions provide both owned capital and loan capital for long and medium-term requirements and supplement the traditional financial agencies like commercial banks.
In addition to provide financial assistance, these institutions also conduct market surveys and provide technical assistance and managerial services to people who run the enterprise.