Development of entrepreneurship depends not only on the supply of credit, but also on appropriate technology especially in backward areas. There have been several credit facilities offered to small firms, and there have been several studies on the efficacy of such facilities. The role of technology, and its triangular relationship with credit and entrepreneurship is much less discussed let alone researched. This study examines the contribution of national laboratories in fulfilling the technology needs of backward areas and its linkages with credit and entrepreneurship. Field study of small scale enterprises which have bought technologies from the Central Food Technological Research Institute and the Central Salt and Marine Chemical Research Institute in Karnataka and Gujarat were studied which indicated need for significant improvement in the interactions largely of technology developing agencies. Some of the implications for policy are also discussed.