Banking Patterns and Needs of Sme

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

Documents

Banking Patterns and Needs of Sme