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8/9/2019 Banking Patterns and Needs of Sme
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BANKING PATTERNS AND NEEDS OF SME
SALONI WADHWAA1802009468MBA-IB
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Definition of Micro, Small and MediumEnterprises
A micro enterprise is an enterprise where investment inplant and machinery does not exceed Rs. 25 lakh
A small enterprise is an enterprise where the investment inplant and machinery is more than Rs. 25 lakh but does notexceed Rs. 5 crore
A medium enterprise is an enterprise where the investmentin plant and machinery is more than Rs.5 crore but does notexceed Rs.10 crore
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INDIAN PROFILE:SME
Small and Medium Enterprises play a vital role for the growth of Indianeconomy by contributing45% of industrial output40% of exports
42 million employmentcreate one million jobs every year produce more than 8000 quality products for the Indian andinternational markets.
As a result, SMEs are today exposed to greater opportunities for expansion and diversification across the sectors. Indian market isgrowing rapidly and Indian industry is making remarkable progress invarious Industries like Manufacturing, Precision Engineering, FoodProcessing, Pharmaceutical, Textile & Garments, Retail, IT (InformationTechnology), Agro and Service sectors.
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SMES IN DIFFERENT SECTORS OF INDIAN
INDUSTRY Food ProcessingAgricultural InputsChemicals & Pharmaceuticals
Engineering; Electrical & Electronic GoodsElectro-medical equipmentTextiles and GarmentsLeather and leather goodsBio-engineering
Sports goodsPlastics productsComputer Software, etc.
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IMPORTANCE OF SME
Employment
Regional and local development
Contribute significantly to export revenues
A positive effect on the trade balance
Helps LSEs
Attracts direct foreign investment
Act as engines of growth
It generates more jobs per unit of capital and is more capital
efficient
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PROBLEMS OF SMES
Under-utilization of capacity.
Inadequate and untimely credit flows.
Inability in technology upgradation.
Insufficient raw-material procurement.
Inability to market finished goods.
Ineffective monitoring and feedback mechanism.
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SME BANKING AT STANDARD CHARTEREDBANK
Business Installation loan- loan to businesses with turnover ranging from INR 40 Lakh to INR 30 Crore.
Benefits of Business Installment Loan areEasy to applyHigher loan amount up to INR 30 LakhNo collateral/ security required
Quick turn around time
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Trade Services and Working Capital -Companies with turnover rangingfrom INR 1 crore to INR 110 crore.
Export ServicesCredit bills negotiationPre -shipment export financingExport Letter of Credit advisingLetter of Credit confirmation.
Import Services
Letter of CreditShipping GuaranteesImport FinancingCustom bonds and Guarantees
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Express Trade- Turnover ranging from INR 1 crore to INR 30crore.
The benefits of Express Trade include -O nly 20% cash margin.Lending upto INR 2.7 crore.Express approval within 7 days.Flexibility of usage in different trade productsSimple Credit and Trade documentation.
Customize the product according to working capital terms andpricing needs.Leverage on the banks extensive International network across morethan 50 countries
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International Trade Account- The services offered include:Current account facilitiesTrade & remittance servicesForeign exchange services
Term Loan- To business with turnover ranging form INR 1Crore to INR 110 Crore. Benefits of Term Loan include:Longer tenor of upto 10 years.
Attractive interest rates. A dedicated Relationship Manager to cater to the businessneedsQuick turn around time
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Forex Services- The services offered includePayment in foreign currency to the vendors/ suppliersQuotations for over 100 currencies offered.
An access to a global team of onshore traders specializingpricing.O nline Treasury ( O LT) which offers the convenience of executing F O REX transactions from desktop.
Loan Against Property-Loan up to 75% of the market value of the property.
Flexibility to opt for pure Term Loan or a combination of Term Loan& O verdraftLoan up to a maximum of INR 3.15 crore.Tenure up to 12 years.O verdraft facility up to a maximum of 50% of the total sanctionedlimit
Attractive interest rates
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ANALYSIS
Ty p o b n u d b y hr pond n (in %)
7 %
%
%
ion li d n
ri Indi n
ri For ign
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0%
2%
4%
6%
8%
10%
12%
14%
16%
Current red it ili ty iled y respondents( in %)
Term oan
Bus iness oan
Overdraft
Loan aga instproperty
P ro ject inance
Home Loan
Gurantees
Letter of Cred it
P resh ipment P ostsh ipment ac ili ty
Buyer's Cred it
Nil
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Pe r e p ion on nd rd h r e r e dn
%
%
%
%
%%
lob l P l e r
u o e r Fri e ndlb n
ood r nd I g e
S o i lles pon s ibl e
W id e P rodue gor
h e r(s )
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0
5
10
15
20
25
Rate I te r est
Br andVa l e
Br anchNetwo rk
stome r se r ices
Va r iety of Financ ia lse r ices
Othe r b an k
cha r es
F inanc ia ltr ade
se r ices
Othe r s
Eva l at ion of the c r ite r ia sed b y the r espondents in se lect ing a b an k
Ve r yImpo r tant
Impo r tant
Do NotCons ide r
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Awareness of services offered by StandardChartered Bank
0 5 10 15 20 25 30
BusinessInstallment Loan
Trade Se rcives&Working Capital
Expres s Trade
InternationalTrade Account
Term Loan
Forex Services
Overdraft
24 Hour BranchBanking
Yes
No
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60
32
8
0
10
20
30
40
50
60
Na i ali e P r iva e I ia P r iv a e r ei
Pe r ce i r es e s ea k es s i e r SME ee s
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RECOMMENDATIONS
Business for Standard Chartered Bank.A more customer friendly image particularlyshould be projected by Standard Chartered to gain
confidence.Awareness of services offered by StandardChartered Bank.Perception about the bank.
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THANK YO U