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17130630 Comparison of SME Finance by SBI and ICICI

Apr 16, 2015

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2009

A Report on Comparative Study of SME Financing Services Provided By Nationalised and Private Sector Bank.

Submitted ByShekhani Mohamed Vasim W. Opulence Business Solutions Pvt. Ltd.43, World Business House, Above IndusInd Bank, Nr. Parimal Garden, C. G. Road, Ahmedabad 380 009 E-Mail: [email protected] Website: www.opulencebiz.com

08BS0001577 Date of Submission: 16/05/2009

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Shekhani Vasim

08BS0001577

A REPORT ON COMPARATIVE STUDY OF SME FINANCING SERVICES PROVIDED BY NATIONALISED AND PRIVATE SECTOR BANK. By Shekhani Mohamed Vasim Md. Wahid

Opulence Business Solutions Pvt. Ltd.43, World Business House, Above IndusInd Bank, Nr. Parimal Garden, C. G. Road, Ahmedabad 380 009 E-Mail: [email protected] Website: www.opulencebiz.com

Submitted to: Dr. Himani Joshi IBS, Ahmedabad

Date of Submission: 16/05/20092|Page Shekhani Vasim 08BS0001577

PrefaceAs a part of my course curriculum of MBA in summer Internship program, we are assigned some practical studies as well as the theoretical knowledge in the related areas for completing the project. I am preparing comprehensive report on COMPARATIVE STUDY OF SME FINANCING SERVICES PROVIDED BY NATIONALISED AND PRIVATE SECTOR BANK.

The basic idea of assignment of this project is to augment the knowledge of students about the SME finance and its various sources. It is concerned with finding the appropriate source of finance that can be used as per the requirement of the SME belonging to a particular sector. This will not only help students, but to a large extent it will help the company it taking the decision to as to which source of finance should be used for a particular SME. This makes the students enhance their analytical capability.

So far as decision of the industry or this sector is concerned, I have chosen the financial consulting firm. This project will also give me firm understanding about the various aspect of SME finance and the various means of raising the finance. I have gained lots of knowledge from this project. And I believe that this will help me in the near future.

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AcknowledgementI would like to express our immense gratitude to mentor guide Mr. BHAVESH PATEL (CMD, Opulence Business Solution Pvt. Ltd), Mr. EDWARD MACWAN (Vice President, Opulence Business Solution Pvt. Ltd) and Mr. SANKET JOSHI (Associate Vice President, Opulence Business Solution Pvt. Ltd) for imparting valuable support, encouragement, guidance and immense knowledge throughout the project.

I am also very thankful to all the staff members of Opulence Business Solution Pvt. Ltd Ahmedabad, Mr. Pratik Pandya, Ms. Harni, and Mr. Vikash Mehta who guided me and provided their support whenever needed.

I am thankful to my faculty members Dr. HIMANI JOSHI for guiding my way throughout this project and clarifying all my confusions. Apart from that he helped me in finding my path and how to go about the project and provided me right input whenever needed.

Last not the least I would like to thank my parents without whose kind, support and love I could not have undergone the project smoothly. I am thankful to my friends and our seniors without whose cooperation and guidance would not have been completely successfully.

I think all those who knowingly and unknowingly who have helped me in the fulfillment of this project.

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Company ProfileA brief Introduction We and our business partner are pleased to present our credentials as a full service Merchant Bank, Investment Bank, Brokerage House & Financial Services Company with presence in Mumbai as well. Our Partner (RBI registered) and its subsidiary (SEBI registered) are together a full service Investment Bank, Merchant Bank and Institutional Stock Broking company with membership in NSE & BSE and Depository services, providing a wide range of Financial Services to over 500 large and mid-cap companies and thousands of retail clients all over India since 1994. Our Board consists of eminent legal and finance professionals who have gained their experience by working with leading Banks and Financial Advisory Institutions of India and abroad expertise in Financial Services, Capital Market, and Investment Banking. The range of SERVICES provided by us includes:

Corporate Finance Secured/Unsecured Term Loans Working Capital Finance Secured/Unsecured Term Loans Working Capital Finance ECB/FCNR(B) Facilities Placement of Debentures & Bonds Project Funding Equity & Loans Financial structuring Trade Finance

Investment Banking Corporate Advisory Services Mergers and Acquisitions Private Equity Placement Joint Venture Partner Search Equity share and business valuationsShekhani Vasim 08BS0001577

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Merchant Banking Initial Public Offers and Follow on shares Right Issues Buybacks Open Offers Preferential allotments ESOP certification BSE listing of companies listed on Regional Stock Exchanges Delisting of Securities

Corporate RestructuringTo unlock value in the businesses To comply with Regulatory requirements To hive off noncore businesses To streamline operations of the Group in similar activities Family Settlement / Re-arrangement

Due DiligenceFinance & Accounting

Direct Taxes Indirect Taxes Legal Service

ValuationBusiness/Division Valuation

Brand Valuation Valuation of Equity Shares Employee Share based compensation Valuation Impairment of Assets (Technical Valuation) Valuation of Financial Instruments Purchase Price Allocation Fairness Opinion Other Intangibles License / Copyrights / trademarks / technology

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ContentsPreface .......................................................................................................................................................... 3 Acknowledgement ........................................................................................................................................ 4 Company Profile ........................................................................................................................................... 5 1. Introduction ........................................................................................................................................... 9 1.1. 1.2. 1.3. 2. Purpose & Scope ........................................................................................................................... 9 Methodology & Sources ............................................................................................................... 9 Limitation.................................................................................................................................... 10

A Brief profile of SMEs in India ........................................................................................................ 11 2.1 Importance of SMEs ......................................................................................................................... 11 2.2 Definition of SME............................................................................................................................. 12 2.3 What Constitutes the SME Sector ..................................................................................................... 12 2.4 SMEs in India ................................................................................................................................... 14 2.4.1 Micro, Small and Medium Enterprise Sector: Profile ................................................................ 14 2.5 Challenges Faced by the SME Sector ............................................................................................... 16 2.6 Various ways of Financing SMEs..................................................................................................... 17

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SME Services Provided by State Bank of India.................................................................................. 23 3.1 Steps for SME loans by State Bank of India (SBI) ........................................................................... 24 3.2 Credit Appraisal By banks ................................................................................................................ 26 3.3 SME Financing Schemes by SBI ...................................................................................................... 27 3.3.1 Open term Loan ......................................................................................................................... 27 3.3.2 School Plus................................................................................................................................. 28 3.3.3 Paryatan Plus .............................................................................................................................. 29 3.3.4 Transport Plus ............................................................................................................................ 31 3.3.5 Doctor Plus................................................................................................................................. 32 3.3.6 SBI Shoppe ................................................................................................................................ 34

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3.3.7 Dental Doctor Plus ..................................................................................................................... 35 3.3.8 Cyber Plus .................................................................................................................................. 37 3.3.9 Rice Mil

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