Msme financial institution14 112013
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Transcript of Msme financial institution14 112013
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POLICY PERSPECTIVES
MSME – FINANCIAL INSTITUTIONS
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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
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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
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- 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
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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.
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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
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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
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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
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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
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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
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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
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SERVICES SECTOR
Rice Mills / Dall Mills / Cotton Ginning MillsAutomobile Dealer FinanceRestaurantsHospitalsProfessionals - Doctors / Engineers / Contractors / Commission
AgentsEducation InstitutionsRoad and Water Transport Operators
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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
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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)
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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
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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
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SIDBI
Women Enterprise Product Marketing (Marketing Fund)
- Service providers incldg. Supporting services - internet, market intelligence, advertising, market research, warehousing, common testing centres
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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
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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
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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
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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
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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
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EXIM BANK
EXPORT VENDOR DEVELOPMENT PROGRAM
Term loans, Export trading houses, Backward linkages for production of export goods.
R & D FOR EXPORT PROMOTION