Msme financial institution14 112013
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Transcript of Msme financial institution14 112013
POLICY PERSPECTIVES
MSME – FINANCIAL INSTITUTIONS
MSMED DEFINITIONS
TYPE INVESTMENT IN PLANT & MACHINERY
Manufacturing Service Enterpise
MICRO Upto Rs. 25L Upto Rs.10L
SMALL Rs.25L -upto Rs.5 crore Rs.10L – upto Rs.2 crore
MEDIUM Rs.5 crore –upto Rs.10 crore Rs.2 crore –upto.Rs.5 crore
INDIA AND MSME ADVANTAGE
Demographic dividend - 15-55 years of age population 56.9% (as per Census 2011) Consumer Credit Market growing @ 40% p.a.
Part of Statutory guidance on Priority Sector stipulated by Government
- BANKS AND MSMEs---credit policy
For Public Sector Banks- 40% of Net Bank Credit (NBC)- Min. 10% MSME
For Private Sector Banks- 32% of NBC- Min. 10% MSME
BANKS AND MSMEs-credit policy
Any short fall to be deposited in Small Enterprise Development Fund (SEDF) of SIDBI.
Min. 20% year on year growth of MSMEs by 2015Min. new 5 MSMEs to be covered by urban/semi – urban
branches.Simplified uniform application forms upto Rs.5 lakhs for all
banks in the country. Setting up of specialized MSME branches and Central
Processing Cells for other branches.
BANKS AND PROMOTIONAL SERVICES
Technical Consultancy - Techno – Economic feasibility studies - Project preparation / validation
Entrepreneurship Development Programs 1. Sector / Activity Specific
- Electronics Services/Food Processing/Handicrafts 2. Target Group - Campus Students - Women - VRS Employees - Housewives
BANK CREDIT FOR MSMEs.
Time Standards
Credit Rating and Uniform Appraisal
Proposals Sanction Period
Upto Rs. 2 lakhs 2 weeks
Upto Rs.5 lakhs 4 weeks
More than Rs.5 lakhs 6 weeks
MSME – APPRAISAL REQUIREMENTS FINANCING
Promoters Profile - Qualifications / Experience Techno Economic Viability - Potential MarketTechnology / Regulatory Standards / Product UniquenessCost of Project and FundingFinancial Appraisal Indicators - Debt Equity Ratio
- Debt Service Coverage Ratio (DSCR)
- Break Even Analysis
Special Appraisal Relaxations for MSMEs
Competitive Interest Rates – Rebate for womenInterest Subvention (Subsidy)Credit Scoring Models–Interest / Security Concessions - Simplified upto Rs.25 lakhs Collateral Free Loans upto Rs.1 crore under Credit Guarantee
Trust for Micro and Small Enterprises.L.U.Credit.Card. – Sanction valid for 3 years upto Rs.10 lakhs and
in special cases upto Rs.25 lakhs. Fair Practices Code
Schemes & Products for MSME Financing
Capital Expenditure
1. General purpose Term Loan - Upto Rs.2.50 crore - Capital expenditure including R & D / Technology up gradation of project cost
2. Deferred Payment Guarantee - Against bills raised by manufacturer
3. Letter of Credit - Import of machinery – Guarantee against
bills raised
Cont.
4. Vehicle Loans for enterprises
Car Loans for promoters 5. Construction Equipment Loan
- Loaders / Excavators / Cranes / etc.
Government Schemes through SIDBI / NABARD
- 15% credit linked capital subsidy scheme towards
cost of project.
- Max. loan is Rs.1 crore
SERVICES SECTOR
Rice Mills / Dall Mills / Cotton Ginning MillsAutomobile Dealer FinanceRestaurantsHospitalsProfessionals - Doctors / Engineers / Contractors / Commission
AgentsEducation InstitutionsRoad and Water Transport Operators
WORKING CAPITAL FINANCE FOR MSMES
Appraisal upto Rs. 5 crore
1. Operating Cycle Estimates OR
20% of Anticipated Turnover Whichever is higher2. Composite Loan Facility - Term Loan + Working Capital
3. Open Cash Credit / Overdraft
4. Mortgage Loans for Composite Purpose
CREDIT GUARANTEE SCHEME (CGT SME) / GoI
Eligibility : Banks and other Financial Institutions
Category Max. extent of Guarantee
Upto Rs. 5 lakhs Above Rs.5L – 50L Above 50L – 100L
MICROENT 85% of AID (Max. of Rs.4.25L)
75% of AID(Max. ofRs.37.50L)
Rs.37.50L + 50% of above Rs.50L loan(Max. Rs.62.50)
Women Entrepreneur Northeast Special Package
ALL OTHER SME 75% (Max. 37.50 L)
Rs.37.50L + 50% of above Rs.50L loan(Max. Rs.62.50)
SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI) AND MSME
Direct Finance - New / Existing units
Bills Finance - Expansion / Modernization / Technology /
Diversification
Refinance - Upto Rs.20 cr cost of project to Banks
SIDBI
International Finance (USD / Euro / Rs.) - Preshipment – 180 days, margin 10-25%
- Postshipment – Bill financing
- Foreign Currency Loans
Energy Saving Projects - 7 yrs loans
- Rs. 10L and above
Risk Capital
- Venture Capital
SIDBI
Women Enterprise Product Marketing (Marketing Fund)
- Service providers incldg. Supporting services - internet, market intelligence, advertising, market research, warehousing, common testing centres
MARKETING ASSISTANCE
Vendor Development Scheme - Under MOU with large corporates & MNCs and
Term Loans & Bill Financing
SME IT Loans - Computerization – Hardware / Software
OTHERS
Technology Up gradationAcquisition of ISO Certification
SIDBI
NSIC (National Small Industry Corporation) - Market Development Scheme
Participation in International Exhibitions - Reimbursement of 25% to 85% of air fare by economy class. - 25% to 75% rental for space. - Max. Rs.1.25L per unit
Other Schemes - Acquiring machinery & equipment upto Rs.5L - Consortium marketing and securing bulk orders - Financing 90 days raw material through bulk purchase - NSIC functioning as a leading export house providing facilities - Conducting exhibitions / trade fairs
Pre-Shipment and Post –Shipment Credit (FX & INR) - Supplier credit through Indian exporter
(with recourse to exporter) - Buyers’ credit - direct to overseas buyer without recourse to exporter
EXIM BANK
EXIM BANK
NON-FUND BASED
Line of Credit (to Importers) - Including Agricultural Commodities and Processed Foods Guarantee on behalf of ExportersFinance for Export – Oriented Companies 1. Project Finance - Modernization / Expansion 2. Overseas Investment Finance (For Joint Ventures / Wholly Owned Subsidiaries)
- Term Loans with Corporate Guarantee of Indian Companies - Equity Participation
EXIM BANK SPECIAL PROGRAMS
Export Marketing Finance (for forward linkages) - Market Research - Participation in International Fairs - Quality Certification - Prospective Buyer visits to India - Preoperative Expenditure for overseas offices
Export Product Development Term Loan for product adaptation / Pilot Plants Product / Process
Development
EXIM BANK
EXPORT VENDOR DEVELOPMENT PROGRAM
Term loans, Export trading houses, Backward linkages for production of export goods.
R & D FOR EXPORT PROMOTION