The entrepreneurial quality and management competence of an entrepreneur play an important role in the success of an enterprise. The evaluation of an entrepreneur is therefore a prerequisite while appraising a project for financial assistance. Banks and financial institutions in India employ purely judgmental appraisal procedures to assess the capabilities of the entrepreneur. As a part of the research study on the influencing factors with regard to the effectiveness of entrepreneurs, research data pertaining to some 'successful' and 'unsuccessful' small business entrepreneurs of Jharkhand state situated in the eastern part of India have been used to develop the Discriminant Model. It has been postulated in the research that entrepreneurial success is a function of entrepreneurial traits, attitude and business skills. The Discriminant Model obtained by the use of SPSS package was able to classify 96.2% of the entrepreneurs correctly as `successful' or `unsuccessful'. The value of Wilk's Lambda (0.176) suggesting good discriminating power of the model, the Standardized Canonical Discriminant Function Coefficients for entrepreneurial traits (0.751), attitude (–0.059) and business skills (0.647) suggest that entrepreneurial traits and business skills are better predictors of 'successful' and `unsuccessful' entrepreneurs. The Discriminant Model developed herein can be used as a quantitative tool to assess entrepreneurs, provide financial assistance to the right kind of entrepreneurs and thereby reduce the chances of loans becoming Non-Performing Assets (NPAs).

Small Scale Industries (SSIs) occupy a place of strategic importance in the Indian economy in view of their considerable contribution to employment, production and exports. They are extremely important for the health of any country. In most developed and developing countries, the SSIs have played a critical role in industrialization and economic development. They are the major contributors to the social and economic benefits of any country. Today, governments worldwide recognize the importance of SSIs and their contribution to economic growth, social cohesion, employment and local development. SSIs account for over 95% of enterprises and 60-70% of employment and generate a large share of new jobs worldwide (www.oecd.org).

The small firms are seen as vehicles for employment generation in most of the countries. The small-scale sector in India has now been identified by the government as one that can assist in generating additional employment, indigenizing technology, leveraging cheap labor and flexibility of operations to create competitive advantage for the Indian industry (Mitra and Pingali, 1999). By the end of March 2000, the SSI sector in India accounted for nearly 40% of gross value of output in the manufacturing sector and 35% of total exports. The SSI sector comprising 3.20 million units has provided employment to about 18 million people (www.smallindustryindia.com).

In spite of all the initiatives taken by the government and support institutions to promote the entrepreneurs, the sickness in the SSI sector has been gradually increasing and it is a matter of concern and debate. A large number of SSI units are sick with little scope for any improvement in the near future. Sickness in the industrial sector results in locking up of resources, wastage of capital assets, loss of production and rising unemployment in the country.

Bank Management Journal, Entrepreneurial Talent, Discriminant Model, Business Skills, Entrepreneurial Traits, Industrial Sectors, Small Scale Industries, Economic Development, Indian Industry, Scheduled Commercial Banks, Financial Resources, Financial Management, Marketing Strategies, Good Management Techniques, Strategic Planning, Business Entrepreneurs.