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- a brief presentation


Enterprise Investment in plant & machinery or equipments, excl. land & building =========================== up to Rs.25 lacs (Rs.10 lacs) > Rs.25 lacs & upto Rs.5 crs. (>Rs.10 lacs & upto Rs.2 crs.) > Rs. 5 crs. & upto Rs.10 crs. (>Rs.2 crs. & upto Rs.5 crs.)

========= 1. Micro
2. Small

3. Medium

MSME Constitution & Importance

Constitution : Set up under the act of parliament called MICRO SMALL & MEDIUM ENTERPRISES DEVELOPMENT (MSMED) ACT,2006

Importance : There are nearly 130 lacs SMEs employing over 3 crs. people Nearly 40% of all manufactured goods and over 30% of the countrys exports are accounted for by the MSMEs. MSMEs are distributed all over the country thereby helping in equitable distribution of income & wealth.

MSME - Objectives
Ministry of MSMEs seek to provide Adequate credit from FIs & Banks Funds for technology upgradation & modernisation Integrated infrastructural facilities Modern testing facilities & quality certification laboratories Access to modern management practices, Better access to domestic & export market

Institutions Set up to achieve the above objectives SIDO,NSICL, SIDBI, Credit Guarantee Fund Trust(CGFT), SMERA, National Entrepreneur Development Institutes

MSME - Credit Appraisal

i) Qualitative ii) Quantitative - Industry trend/ Promoter verification - Financial Analysis

Turnover Method - 20% of the turnover to be the WC.

(for credit facilities up to Rs.5 crs.)

MPBF Method -Tandon / Chore Committee Recommendation

(for credit facilties >Rs.5 crs.)

Credit Appraisal..cont.
Small Borrowers / Traders / Transporters : Find out the source of getting the proposal whether walk-in / sourced through Agent / take over case / reasons for shifting etc. Discuss with our own marketing officer who has brought the proposal. Go through the existing Bank Statements / records. Cross examine the financial statements with IT records / Sales tax records. Scruitinise the Cash flow scrupulously. Visit the place of business / Inspect the collaterals offered / meet the owner of the property.

MSME Lending - Products

FUNDED : Term Loans Working Capital : a) Pre-sale WC finance viz. CC/OD,EPC,DL, Line of Credit b) Post sale WC finance viz. BP / BD / Cheque purchase NON-FUND FACILITIES : Letter of Credit Bank Guarantees