Cgtmse ppt

A

Presentation ON

CGTMSE SCHEME, COVERAGE IN ELIGIBLE ACCOUNTS IN GUJARAT.

UNDERTAKEN AT STATE BANK OF INDIA SUBMITTED TO

Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE MASTER DEGREE OF BUSINESS ASMINISTRATION

SUBMITTED BY SANKET R PARIKH– 127780592045SOM LALIT Institute of Business Management Affiliated to Gujarat Technological University

AHMEDABAD

http://www.smeworld.org/userfiles/CGTMSE%20Scheme.jpg


Definition of MSE as defined in MSMED Act 2006

Micro and Small Enterprises (MSE) in India

MSE is governed by the MSMED Act 2006

More than 26 million units Registered / Unregistered MSEs

Provide employment to more than 60 Million persons

Largest employment generating sector after agriculture

Employment potential at low capital cost

Constitute 95% of industrial units

Maximum Cover of up to 85% of credit facility

Key contributors to national economy

45% of manufacturing output

40% of total exports

10% of Gross Domestic Product

More than 6000 product produce by MSE

36% food product produce by MSE.

About CGTMSE

At beginning the Scheme shall be known as the Credit Guarantee Fund Scheme for Small

Industries (CGFSI) But Subsequent the Trust was Renamed as Credit Guarantee Fund Trust

for Micro and Small Enterprises. Under the scheme, loan up to 100 lakhs is available

CGTMSE came into force from august 1,2000. It is set up as trust and administered by Board

of Trustees.

CGTMSE is committed to facilitate collateral free credit to the MSE sector across the country

and work diligently towards achievement of the goals of financial inclusion.

The progress of guarantee coverage under CGS has picked up during the past few years with

a total of 2,43,981 guarantees for an amount of Rs.13,783.98 crore being approved during the

financial year.

CGTMSE will include small road and water transport operators, small business, professionals

and self employed person and all other service enterprises under the ambit of micro and small

enterprises.

National Small Industries Corporation Ltd. and SIDBI is only lending institutions who

disbursed loans under this scheme.


About CGTMSE

The propose of this scheme is to laid the growth and development of micro, small and

medium-scale enterprises (MSME) in India.

Loans can be obtained for working capital requirements, purchase of machines, expansion

plans etc. and Small businesses involved in retail trade are not eligible.The loan under the

scheme is disbursed through MLIs( Member Lending Institutions)

They provide their own website www.cgtmse.in or www.cgtsi.org.in MLI can log on to the

website-member page, using member-ID allotted and generate the reports desired by it viz.

status of the application lodged, Demand for GF/ASF, monthly reports etc. There are 131

MLIs bank under CGTMSE..

The chairman of CGTMSE is S. Muhnot and CEO is U.R.Tata.


About fee and processor to claim online

Credit limitsOne time Guarantee fee Annual service fee

North eastern region including Sikkim

others

Up to RS.5 lacs 0.75% 1.00% 0.5%

Above RS.5 lacs to Rs. 50 lacs

0.75% 1.00% 0.5%

Procedure for lodging the claim online

•Login to CGMSE WEBSITE

•Select the ‘claim processing’ icon from the two drop-down boxes provided just below the above icon.

•Fill the applications in all respects by giving the CGPAN number of the borrower-unit

•Print two copies of this filled in application and submit to the trust along with a declaration and

undertaking above duly executed by an officer not less than the rank of the AGM of the bank.

Procedure for allocation of guarantee fee

Login to website of CGTMSE Go to receipts and payments Select allocate payment from the left dropdown box Select GF from the right dropdown box DANS for GF as the case may be will be visible Allocate payments by checking the PAY boxes. Click on SAVE Enter the instrument details and click on SAVE Go to reports and MIS Select GF allocated report from right dropdown box. Click OK Print the report and send the report along with the DDs to CGTMSE for

appropriation.

Introduction about banking sector

A bank is a financial intermediary that accepts deposits and channels those deposits into

lending activities, either directly or through capital markets

The Indian financial system comprises the three institutions. one is commercial banks which

include Public sector, Private sector, Foreign Banks and second is cooperative banks which

include Urban cooperative banks, State cooperative banks, Central cooperative banks and

third is financial institution. Banking sector cover 47% placement In India.

Various service of bank is Corporate Bank Services / Wholesale Banking Services, Retail

Banking, Saving Bank Account, Fixed Deposit, Current Account, Corporate Salary Account,

Internet Banking Services, Demat Services, Inter Branch Network, Automated Teller Machine

(ATM), 24-Hours Phone Banking, Bill Pay, Safe Deposit Lockers, Debit Cards & Credit cards,

Free Investment Advisory Services, Banking Through Mobile Phones, Free Home Services

Introduction about company

State Bank of India (SBI) is government-owned and It traces its existence back to the Bank of

Calcutta. which was established in 1806; this makes SBI the oldest commercial bank in the

Indian subcontinent.

SBI is one of the Largest state-owned bank and financial services company in India, by almost

every parameter - revenues, profits, assets, market capitalization. It having 131 Foreign offices in

32 countries across the global. It have 26500 branches, and ranked 29th most reputed company

in the world according to Forbes.

It’s SWOT analysis is Strengths King of rural India, Government Banking, Diversified Portfolio,

Low Transaction Cost, Brand Name. it’s weakness is High % of NPA, Lacks modernization. It’s

Opportunities is Merger of banks Add branches Expansion Modernization and Threats is Advent

of MNC banks, Private banks, Liberalization, Consumer Expectations, Employee Strike. Managing the nation’s largest ATM network.

Objectives of scheme

Facilitate institutional credit flow to MSE sector and Address growth constraints of MSE sector

Enable financial inclusion / employment generation Widening of credit portfolio, Better management of risk Lender should give impotence to project viability and secure the credit

facility purely on the primary security of the assets financed. cover risk up to 85% to ensure that loan to MSE entrepreneurs is sanctioned without any

collateral security or third party guarantee. To promote this scheme as many as possible and give maximum advantage

to MSE for starting and expanding their business.

scope

To empower the SME sector to utilize the limited resources (human & economic) they have in

an optimum manner.

To be educated and informed of the latest developments taking place globally and helped to

acquire skills necessary to keep pace with the global developments and accordingly that

modified CGTMSE scheme.

to organize Seminars, Conferences, Workshops and Training Programs and other trade

promotional activities to educate & create awareness amongst the SMEs

To go for diversification, expansion and modification by facilitating extension of collateral

free credit through the institutional mechanism.

To improve employment.

Objective of research

To know about awareness level of CGTMSE scheme and

To know the prospective growth of the scheme if it is made mandatory.

To find the need of promotion and marketing in CGTMSE scheme

To know about coverage in Gujarat under CGTMSE scheme

To find way that how can we raise CGTMSE scheme coverage, and how can we provide best

service to customer in related to CGTMSE scheme, or what are the step needed to make better

this scheme.

Research Scope and limitation

o Scope

To find the need of promotion and marketing in CGTMSE scheme

To know about coverage in Gujarat under CGTMSE scheme

To increase awareness about CGTMSE

To know about whether mandatory of CGTMSE is beneficial or not

o limitation

Most of data are base on secondary information.

It is very difficult to find primary data as there is less customer information of it.

Some manager and people also not aware about it so expert reply is very few.

Research Methodology

Research design:

Primary data:

In which I use two method of it that is personal interview and questionnaires. And try to find out need of promote scheme, to know whether borrower aware about this scheme or not.

Secondary data:

In which I use Annual Report CGTMSE, Published journal articles, other theoretical publications on SME access to credit; Papers/articles found on the websites for suppliers of credit, development financial institutions and banks ; and Papers/articles found on the websites for credit regulators and SME advocacy organisations.

Sample size

In my research I have done survey of 21 branch manager and 30 customer.

Data Analysis

Cross tabulation study between gender and their preferences about taking their CGTMSE loan in bank

PreferencesGender Private Gov.bank TotalMale 8 17 25Female 2 4 6Total 10 21 31

private gov.bank0

5

10

15

20

8

17

24

malefemale

From the fig. is interpreted that there is more preferences given in gov. bank.

age need no need

total

20-30 5 2 731-40 6 1 741-50 7 3 1051-60 4 3 7total 22 9 31

Cross tabulation Study in age and their view about need of promotion in CGTMSE Scheme

20-30 31-40 41-50 51-600%

10%20%30%40%50%60%70%80%90%

100%

56

74

21

33

Need to promote

no needneed

From the fig. is interpreted that there is need for promotion.

AWERNESS LEVAL OF CGTMSE

8

23

CGTMSE

awernot awer

From the fig. is interpreted that there is more Promotion is needed.

stron

gly

agre

ene

trul

disa

gree s

di0

10

20

30

40

50

60

3520

3 8 6

17

15

12 5 2

x2x1

X1= view about scheme is mandatory or notX2= view about if the scheme is mandatory will is affect the grow of the scheme

Based on secondary data

Performance of CGTMSE

private bank3% lending institution

6%

SBI Associare24%

PSU bank67%

Reginal rural banks0.4%

From the fig. is interpreted that PSU bank have lending high than rest of the bank.

Range of loan in rupees under CGTMSE

Up to 1 lakh

1 lakh to 2 lakh

2 to 5 lakh

5 to 10 lakh

10 to 25 lakh

25 to 50 lakh

50 to 100 lakh

0100002000030000400005000060000700008000090000

100000

90997

16501 1966510987 9936

1819 129

No. of approvals against loan amount range

Best sector under CGTMSE

6%

9% 1%

6%

71%

7%

food and beveragestextilesinformation technologyservicesmanufacturingother

From the fig. is interpreted that manufacturing sector has cover wide area of CGTMSE lending fund.

Top 7 States to utilize CGTMSE fundState/Union Territory

CGTMSE (Cr)

CGTMSE %

Uttar Pradesh

312.07 6.54

Kerala 354.27 7.42

Gujarat 376.77 7.89

West Bengal 404.97 8.49

Maharashtra 418.79 8.78

Karnataka 615.26 12.89

Tamil Nadu 646.99 13.56

Total 3129.12 cr 65.57 %

utterp

rades

h

keral

a

gujr

at

west b

enga

l

mah

aras

tra

karnat

aka

tam

ilnad

u0

100200300400500600700

312.07354.27 376.77 404.97 418.79

615.26 646.99

Column1Column2Column3Column4Column5Column6Column7

Top 7 States to utilize CGTMSE fund

Finding

Tools and technique Chi-square test of age group and their preferences about promotion of

CGTMSE loan H0:-Age group is independent of their preference about promotion of scheme H1:- Age group is not independent of their preference about promotion of

scheme

CONCLUTION

age need no need

total

20-30 5 2 7

31-40 6 1 7

41-50 7 3 10

51-60 4 3 7

total 22 9 31

fo fe (fo-fe)2 (fo-f1)/fe5 4.968 0.001 2.013

2 2.323 0.104 0.448

6 4.968 1.065 0.214

1 2.032 1.065 0.524

7 7.097 0.009 0.001

3 2.903 0.009 0.003

4 4.968 0.937 0.189

3 2.032 0.937 0.461

total 3.853

Let, a=0.05, x2(m-1)(n-1)=x2 3, 0.05= 3.8415X2=(Oij-Eij)2 = 3.853 Eij

Here,x2>x2 3, 0.05 so reject hypothecs

Chi-square test of gender and their preferences about taking their CGTMSE loan in bank

H0 = gender is independent of preference of bank

H1 = gender is not independent of preference of bank

Preference/ gender

Private bank

gov.bank Total

Male 8 17 25

Female 2 4 6

Total 10 21 31

F0 Fe (Fo-Fe)2 (Fo-Fe)2 Fe

8 8.065 0.004225 5.2387

17 16.94 0.0036 2.1251

2 1.94 0.0036 0.0019

4 4.065 0.004225 0.00104

total 31 0.01565 7.367Let, a=0.05, x2(m-1)(n-1)=x2 1, 0.05= 3.8415X2=(Oij-Eij)2 = 7.367 EijHere,x2>x2 1, 0.05 so reject hypothecs

Other finding

Awareness creation is a very important aspect and this needs to be improving in

many states which have not used this scheme effectively.

There is divergence in guidelines by CGTMSE, RBI & SBI

There are however many area for improvements that needs to be done to the

scheme to make it more successful in attaining its goals.

Public/government bank is more preferable than private bank in CGTMSE.

The average landing amount under CGTMSE is between 75000 to 300000.

Manufacture sector is taking more benefit of CGTMSE than all other

sector(service, food and breweries ,textile, information technology)

Conclusion

Successfully managing financial resources is impotent in new and expanding business,

so to develop and implement a financial plan CGTMSE play important role that will

ensure the success of business.

Currently, trading, training institutes and educational organizations are excluded under

CGSTME scheme. With a growing need for private institutions in the training and

educational arena and a burgeoning population, these enterprises are less likely to fail.

One major weakness that needs to be addressed is the awareness of the program. Many

in the industry perceive this to be “subsidy” or government-scheme Industrial

associations have been the primary channel used till now to inform and educate the

SME about the credit fund. Many members of these associations would otherwise be

the target for other schemes and hence training Institutes, colleges and other student

bodies should be targeted to raise the awareness among the public.

At final Awareness creation is a very important aspect and this needs to be done in

many states which have not used this scheme effectively.

Recommendation/Suggestions

Bank should conduct various seminar and also promote CGTMSE scheme for

improve awareness level about CGTMSE

There should be easier way and less formality to get the loan for borrower

Ruler area people should be targeted for giving him this benefit.

There should be some incentive for sale or promote this type of scheme for bank

The limit for loan is must be improve from 100 lakh to 300 lakh

There should be innovate other scheme too for develop small and micro Enterprise.

It is keen need to cover and improve service sector also.

Proper guidance should be there for both bank and borrower

Bibliography

Guarantee Trust Fund for Small and Medium Enterprises

http://www.cgtmse.in Report of the Working Group to Review the Credit Guarantee Scheme

of the Credit Guarantee Fund Trust for Micro and Small Enterprises. annual report of CGTMSE Published journal articles, and other theoretical publications on SME

access to credit Papers/articles found on the websites for credit regulators and SME

advocacy organisations www.smeworld.org › SME Finance www.dcmsme.gov.in/schemes/sccrguarn.htm KEN BLACK book fifth addition of Business Statistics 2010.

Annexure

Questioner of CGTMSE SURVEY QUESTIONNAIRE ADMINISTERED TO 21 BRANCHES MANAGERS

Profile of Respondent:

Name:

Name of bank and Branch:

Please Indicate Your Agreement with Each of the Following Statements.

Guidelines of CGTMSE:

1. Do you think CGTMSE lending should be non-mandatory?

Strongly agree Neutral disagree strongly disagree

1 2 3 4 5

2. . Do you think that non-mandatory nature of CGTMSE lending has reduced lending under CGTMSE?


1 2 3 4 5

SURVEY QUESTIONNAIRE ADMINISTERED TO 21 BRANCHES MANAGERS

3. Getting approval for every sanction has contributed to poor growth of CGTMSE lending.


1 2 3 4 5

4. Delay in getting the guaranteed sum from CGT keeps the scheme unattractive to bankers.


1 2 3 4 5

5.Branch level marketing of CGTMSE will help to increase lending.


1 2 3 4 5

6. More marketing by is needed to develop this scheme


1 2 3 4 5

7. Landing a fund without any secondary security is leading to misuse of fund by borrower


1 2 3 4 5

SURVEY QUESTIONNAIRE ADMINISTERED TO 31 CUSTOMERS

1.Name :

2. Occupation: gender: age:

3.Do you think that collateral (guarantee) free loan is good option to start or grow business? YES NO

4. Do you have account in any bank? If yes pls. mention it. YES . NO

5. Do you know about CGTMSE? YES NO

6.In which bank you prefer to take loan under CGTMSE? Pls. specify with particular bank name. Private bank Government bank .

SURVEY QUESTIONNAIRE ADMINISTERED TO 31 CUSTOMERS

6.Bank should conduct awareness camp about the scheme to make MSE aware about the scheme.


1 2 3 4 5

7. Can slum or ruler area people actually take advantage of this type of scheme? YES NO

8.Are you fill difficulty about Divergence in guidelines by CGTMSE, RBI & SBI? YES NO

9. Do you like to take a loan under CGTMSE scheme? YES NO

A year-wise growth position

Period Active MLIs Number of Proposals Approved

Credit Amount Approved (Rs. in Lakh)

FY 2000-01 9 951 606

FY 2001-02 16 2296 2952

FY 2002-03 22 4955 5867

FY 2003-04 29 6603 11760

FY 2004-05 32 9516 32677

FY 2005-06 36 16284 46191

FY 2006-07 40 27457 70453

FY 2007-08 47 30825 105584

FY 2008-09 57 53708 219940

FY 2009-10 85 151387 687511

FY 2010-11 106 254000 1258922

FY 2011-12 109 243981 1378398

FY 2012-13 133 60008 357684

Cgtmse ppt

Education

survey questionnaire

papersarticles

rbi amp

credit regulators

important

square test

theoretical

x2gt