- 1. New Technologies for Small and Medium - Size Enterprise
Financing
2. ICICI Bank - The e-Universal Bank Assets of US $ 21 bn
Globally held (ADR, FII own 47% stake ) Second largest Bank in
India - Technology Leader Rated by Moodys above sovereign rating
First Indian Bank to be listed on NYSE 3. A universal banking
powerhouse... Retail Financial Services Corporate Financial
Services Term Loans Project Finance Commercial Bank Investment Bank
Venture Capital Genl. Insurance IT Services Car Loans Mortgages
Credit Cards Personal loans Deposits Life InsuranceMutual funds 4.
Establishing an international presence Canada UK UAE Singapore USA
China Phase I: Offices opened/to be opened shortly Phase II:
Geographies under advanced stage of evaluation 5. Universal Banking
Theme Smart Card Technology Empanelled expert for tax and
accounting advice Web Trading InternetBanking MobileBanking Call
Centre B2B Solutions Portals e-Commerce initiatives Leveraging
Technology to enhance delivery capabilities 6. SME Sector Higher
productivity High quality- greater competitiveness Sustainable
revenue models Use ofTechnology Enables virtuous cycle of
technology, innovation, competitiveness, openness to market economy
and globalisation Virtuouscycle Single largest employer Fastest to
adopt innovation Ensures equitable wealth distribution Importance
of SME Sector in Technology 7. Financing options for SME Upto
breakeven Long Sustainablegrowth VC / Bank / Debt markets Bank
Finance / Debt/ IPO Short term Growth Loan/ Debt/ IPO Mid Term
Creation Promoters Long Seed capital / Subsidy SME Lifecycle
Suitable type Duration of financing required Suitable Channel Start
up VC / Angel investor / Subsidy/Tax incentive Long VC / Promoters
Maturity Public Debt/ Capital Market Short term VC / Angel investor
/ Subsidy/ Tax incentive/ VC/ Angel Investor / Promoters VC / Bank
/ Promoters Capital Market/ Debt markets 8. Financing for SMEs
Financing for SMEs
Cluster Financing
9. Financing intervention for technology Financing intervention
for technology can happen at 2 levels
-
- Internet payments in closed
-
- Smart cards in closed loops
10. Constraints in Financing SMEs..
- Low capitalization / Collaterals
- Vulnerable to market changes
- Insistence on collaterals and
11. SME Financing Approaches to SME Financing Prudent
Segmentation Cash flow based evaluation Multiple channels offerings
by leveraging Technology Migration to non-branch channels Key
aspects Measurement of risk and mitigation Reduction in cost of
transactions Delivery cost and reach 12. Enabling Framework for
Technology Financing TechnologyFinancing Financing Quality
Initiatives Priority Sector Mandated Lending Specialised
Stock-markets Competitive pressure to encourage innovation
Protection to nascent technical units Technical education/ skilled
manpower Fiscal Measures, System and Infrastructure Cluster
Development VC/ Angel incubators Institutional framework of nodal
agencies for refinance/ guarantees Industrial extension services
Enabling technology transfer incentives 13. BIS 2 Proposals
Advantage SME
- Banks free to evolve capital allocation according
- to internal rating based approach
- SMEs with turnover less than EUR 50 mn will
- have explicit lower capital charge
- Small businesses with loan size less than EUR 1 mn
- with collateral will get beneficial capital allocation
- Recognition to collaterals, credit derivatives,
- guarantees for allocating capital
Risk sensitive capital framework holds promise that the
regulatory framework will support SME lending by banks 14. ICICI
Bank Initiatives SME Portal - Internet Banking Gateway for B2Bsites
Supply Chain Financing on B2B loops Subsidiary network role in
technology financing 15. 16. Case Study I - Supply Chain B2B
Solution PurchaseOrder ERPInterface DespatchInvoices Dealer
Overdraft Account ICICI Bank SME Dealer ABC Ltd 17. Case Study II -
Smart card solution for FSCsBank Account/ Credit History Output
Sale Collect Money Farmer Service Center
MerchantStore Input Online update of Bank accounts 18.
Innovative DeliveryMechanisms Innovations in Delivery Channels
Sustainable Access for Rural India (SARI) project Partners: MIT
Media Labs, Harvard University, I-Gyan,
-
- Providing reliable Internet access through Kiosks using corDECT
WiLL
100 kiosks managed by entrepreneurs to be set-up
-
- Providing e-governance, and information services
Delivering banking services through Internet kiosks 19. Other
initiatives - I e-banking in ICICI Bank ICICI Markets online FX,
Debt, SME Portal Corporate Infinity online transfer/ settlement
system Bill Junction Utility bill payments Roaming Current Account
web interface ICICI Direct and ICICI Select Pay Seal electronic
payment system 20. Other Initiatives - II OTHER INITIATIVES Cluster
Financing Fleet card for transporters Smart card for retailers
Escrow payment services Facilitating e-Sales Tax/Octroi payments
Shopping Mall arrangements 21. Subsidiary network support
technology financing ICICI Eco-Net Internet &Technology Fund
ICICI Infotech Services LimitedICICI InformationTechnology Fund
ICICI Web Trade Limited ICICI OneSource Limited ICICI Equity
Fund
- Business process outsourcing
- Internet based broking services
- Software consulting development
- Investment in securitiesof medium sized IT companies
- Investment in unlisted internet & technology companies
- Investment in medium sized IT companies
22. Our recommendations
-
- Fiscal benefits to attract VC funds
-
- Lifecycle approach to determine which channel to fund SME
requirement
-
- Public-private partnership
-
- Banks to be permitted to use non-bank infrastructure to deliver
services
23. Road Ahead Liberalised normsfor tech transfer JV with
foreign VCDirected lending normsto include all techintensive SME
Re-finance ,guarantees,subsidies, VC fundsTax
incentivesInfrastructure statusto IT, Bio-tech,telecom Public -
Private Partnership 24. Thank You
