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SME unding ! Studyof an "ndian

Entrepreneur

Group # 05 TYBMS

G.N Khalsa college

1/27/2012



Group Members:

1.Purna Kaur Arora 02

2.Tejal Kaur Arora 04

3.Shradha Dherange 0

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INTRODUCTION TO SME’S



Small and Medium Enterprises (SMEs) have played a significant role

world over in the economic development of various countries. Over a

period of time, it has been proved that SMEs are dynamic, innovative

and most importantly, the employer of first resort to millions of peoplein the country. The sector is a breeding ground for entrepreneurship.

The importance of SME sector is well-recognized world over owing to

its significant contribution in achieving various socio-economic

objectives, such as employment generation, contribution to national

output and exports, fostering new entrepreneurship and to provide

depth to the industrial base of the economy. Small and medium-sized

enterprises (SMEs) are the backbone of all economies and are a keysource of economic growth, dynamism and flexibility in advanced

industrialized countries, as well as in emerging and developing

economies. SMEs constitute the dominant form of business

organization, accounting for over 95% and up to 99% of enterprises

depending on the country. They are responsible for between 60-70%

net job creations in Developing countries. Small businesses are

particularly important for bringing innovative products or techniques

to the market. Microsoft may be a software giant today, but it started

off in typical SME fashion, as a dream developed by a young student

with the help of family and friends. Only when Bill Gates and his

colleagues had a saleable product were they able to take it to the

marketplace and look for investment from more traditional sources.

SMEs are vital for economic growth and development in both

industrialized and developing countries, by playing a key role in

creating new jobs. Financing is necessary to help them set up and

expand their operations, develop new products, and invest in new staff

or production facilities. Many small businesses start out as an idea

from one or two people, who invest their own money and probably turn

to family and friends for financial help in return for a share in the



business. But if they are successful, there comes a time for all

developing SMEs when they need new investment to expand or

innovate further. That is where they often run into problems, because

they find it much harder than larger businesses to obtain financingfrom banks, capital markets or other suppliers of credit.

COMMON CHARACTERISTICS OF SMES:

(a)Born out of individual initiatives & skills

SME startups tend to evolve along a single entrepreneur or a small

group of entrepreneurs; in many cases; leveraging n a skill set. There

are others setup purely as a means of earning livelihood.

(b)Greater operational flexibility

The direct involvement of owner(s), coupled with flat

hierarchical structures and less number of people ensure thatthere is greater operational flexibility. Decision making such as

changes in price mix or product mix in response to market conditions

is faster.

(c)Low cost of production

SMEs have lower overheads. This translates to lower cost

of production, least up to limited volumes.

(d)High capacity to innovate export:

SMEs skill in innovation, improvisation and reverse engineering are

legendary. By being able to meet niche requirements, they are



also able to capture export markets where volumes are not

huge.

(e)High employment orientation:

SMEs are usually the prime drives of jobs, in some cases creating up

to 80%. Jobs SMEs tend to be labour intensive per se and are

able to generate more jobs for every unit ofinvestment, compared

to their bigger counterparts.

(g) Reduction of regional imbalances

Unlike large industries where divisibility of operations is more difficult,SMEs enjoy the flexibility of location. Thus, any country,

SMEs can be found spread virtually right across, even though

some specific location s emerge as ‘clusters’.

SMEs in India:

India has a vibrant SME sector that plays an important

role in sustaining economic growth, increasing trade,

generating employment and creating new entrepreneurship in

India.

In keeping in view its importance, the promotion and

development of SMEs has been an important plank in our

policy for industrial development and a well-structured program

of support has been pursued in successive five-year plans for. SMEs in

India have recorded a sustained growth during last five decades.

The number of SMEs in India is estimated to be around13 million

while the estimated employment provided by this



sector is over 31 million. The SME sector accounts for

about 45 per cent of the manufacturing output and over 40 per

cent of the national exports of the country.

Figure 1.1SMEs In India



DEVELOPMENT OF SMES IN INDIA :

SME has emerged into prominent sector in Indian economy in

general and industry in particular. SSI sector in India hasposted impressive growth in 1990's from 15% in1991-92 to

55% in 2001-02.The growth in employment generation has been

equally impressive from 3% to 45% during the same period.

Employment in SME touched 19million, just behind agriculture. Share

of SSI exports crosses 40% of total exports.



Growth by itselfin SME sector is impressive enough indicating

a positiveresponse to the Economic Reform process initiated in the

country since 1991.

--- Development of infrastructure

--- Availability of Cheap Credit ---Concessionary Taxes and Tariffs

--- Financial subsidies

--- Equity contributions are all the protective measures for the sector

--- Assured supply of Raw Materials.

The Long-Term Finance may be Raised by the Companies

from the following Sources:-

Capital market :

Capital market denotes an arrangement whereby transactions

involving the procurement and supply of long-term funds take

place among individuals and various organizations. In the capital

market, the companies raise funds by issuing shares and

debentures of different types. When long-term capital is initiallyraised by new companies or by existing companies by issuing

additional shares or debentures, the transactions are said to take

place in the market for new capital called, as 'New Issue Market'.

But, buying and selling of shares and debentures already issued

by companies takes place in another type of market called as 'the

Stock market'.

Special Financial Institutions:

A large number of financial institutions have been established in

India for providing long-term financial assistance to industrial

enterprises. There are many all-India institutions like Industrial

Finance Corporation of India (IFCI); Industrial Credit and



Investment Corporation of India (ICICI); Industrial Development

Bank of India(IDBI), etc. At the State level, there are State

Financial Corporations (SFCs) and State Industrial Development

Corporations (SIDCs). These national and state level institutions

are known as 'Development Banks'. Besides the development banks, there are several other institutions called as 'Investment

Companies' or 'Investment Trusts' which subscribe to the shares

and debentures offered to the public by companies. These

include the Life Insurance Corporation of India (LIC); General

Insurance Corporation of India (GIC); Unit Trust of India (UTI),

etc.

Leasing companies :

Manufacturing companies can secure long-term funds from

leasing companies. For this purpose a lease agreement is made

whereby plant, machinery and fixed assets may be purchased by

the leasing company and allowed to be used by the

manufacturing concern for a specified period on payment of an

annual rental. At the end of the period the manufacturingcompany may have the option of purchasing the asset at a

reduced price. The lease rent includes an element of interest

besides expenses and profits of the leasing company.

Foreign companies :

Funds can also be collected from foreign sources, which usually

consists of:- Foreign Collaborators:- If approved by the Government of India,

the Indian companies may secure capital from abroad through the

subscription of foreign collaborator to their share capital or by way of

supply of technical knowledge, patents, drawings and designs of plants

or supply of machinery.



International Financial Institutions:- like World Bank and

International Finance Corporation (IFC) provide long-term funds for the

industrial development all over the world. The World Bank grants loans

only to the Governments of member countries or private enterprises

with guarantee of the concerned Government. IFC was set up to assistthe private undertakings without the guarantee of the member

countries. It also provides them risk capital.

Non-Resident Indians:- persons of Indian origin and nationality

living abroad are also permitted to subscribe to the shares and

debentures issued by the companies in India.

Retained Profits or Reinvestment of Profits:

An important source of long-term finance for ongoing profitable

companies is the amount of profit which is accumulated as general

reserve from year to year. To the extent profits are not distributed as

dividend to the shareholders, the retained amount can be reinvested

for expansion or diversification of business activities. Retained profit is

an internal source of finance. Hence it does not involve any cost of

floatation which has to be incurred to raise finance from externalsources.

Short-Term Finance may be Raised by the Companies from

the following Sources:-

Trade Credit:

It is the credit which the firms get from its suppliers. It does not make

available the funds in cash, but it facilitates the purchase of supplies without immediate payment. No interest is payable on the trade

credits. The period of trade credit depends upon the nature of

product, location of the customer, degree of competition in the

market, financial resources of the suppliers and the eagerness of



suppliers to sell his stocks.

Installment Credit:

Firms may get credit from equipment suppliers. The supplier mayallow the purchase of equipment with payments extended over a

period of 12 months or more. Some portion of the cost price of the

asset is paid at the time of delivery and the balance is paid in a

number of installments. The supplier charges interest on the

installment credit which is included in the amount of installment.

The ownership of the equipment remains with the supplier until all

the installments have been paid by the buyer.

Accounts Receivable Financing:

Under it, the accounts receivable of a business concern are

purchased by a financing company or money is advanced on security

of accounts receivable. The finance companies usually make

advances up to 60 per cent of the value of the accounts receivable

pledged. The debtors of the business concern make payment to it

which in turn forwards to the finance company.

Customer Advance:

Manufacturers of goods may insist the customers to make a part of

the payment in advance, particularly in cases of special order or big

orders. The customer advance represents a part of the price of the

products that have been ordered by the customer and which will be

delivered at a later date.

Bank Credit:

Loans:- When a bank makes an advance in lump sum, the

whole of which is withdrawn to cash immediately by the

borrower who undertakes to repay it in one single installment, it

is called a loan. The borrower is required to pay the interest on



the whole amount.

Cash credit:- It is the most popular method of financing by

commercial banks. When a borrower is allowed to borrow up to

a certain limit against the security of tangible assets orguarantees, it is known as secured credit but if the cash credit

is not backed by any security, it is known as clean cash credit.

In case of clean cash credit the borrower gives a promissory note

which is signed by two or more sureties. The borrower has to

pay interest only on the amount actually utilized.

Overdrafts:- Under this, the commercial bank allows its

customer to overdraw his current account so that it shows thedebit balance. The customer is charged interest on the account

actually overdrawn and not on the limit sanctioned.

Discounting of bills:- Commercial banks finance the business

concern by discounting their credit instruments like bills of

exchange, promissory notes and hundies. These documents arediscounted by the bank at a price lower than their face value.

PROBLEMS OF SMES:

SME sector faces a number of problems - absence ofadequate

and timely banking finance, limited knowledge and non-availability of

suitable technology, low production capacity, follow up with variousagencies in solving regular activities and lack of interaction with

government agencies on various matters. Some of the major problems

are briefly as follows:

a)Financial problems of SMEs:



The financial problem ofSMEs is the Root Cause for all the other

problems faced by the SME sector. The small and medium

industrialists are generally poor and there are no facilities

for cheap credit. They fall into the clutches of money lender who

charges very high rates of interest, or else they borrow from thedealers of their goods, who exploit them by completing

them to sell their products at very low price. After

the nationalization of 14 major Indian Banks in July,

1969, the Commercial banks were providing only a small

proportion of SMEs financial requirements. Credit to the SME

sector continues to be non-commensurate with its contribution

to the total industrial output. As against the share of the village and

SME at 40% in the industrial output, its share in total credit to theindustrial sector is only about 30%.

b) Raw Material problem of SMEs:

This difficulty is experienced in a very pronounced form. The

quantity,quality andregularity ofthe supply ofraw materials ar

e not satisfactory. There are noquantity discounts, since they ar

e purchased in small quantities and hencecharged, higher prices

by suppliers. Difficulty is also experienced in procuring semi-manufactured materials. Financial weakness stands in the way of

securing rawmaterialism bulk in a competitive market.

c)Technological problem of SMEs:

Today technology is changing at a very fast phase; it becomes difficult

for SMEs to cope up with changing technology. Technology up

gradation and the frequent need to renew the equipment has

emerged as a big problem.

d) Marketing problem of SMEs:

As marketing is not properly organized,helpless artisans are

completely at the mercy of middle man. The potential demand for their



goods remains under developed. SMEs cannot afford to spend lavishly

for advertisement to promote their sales.

e) Managerial problem of SMEs:

The in efficiency in management comes first among managerial proble

ms.The entrepreneurial ability ofpromoters ofcottage industrie

s and SMEs are handicapped by technical knowhow in the areas

of production, finance, accounting and marketing management.

f) Sickness of SMEs:

A serious problem which is hampering small and medium

sector has been sickness. Many small units have fallen sick due

to one problem or the other. Sickness is caused due to both Internal and external factors. From among the various inte

rnaland external causes ofsickness the important ones are bud

management,high rate ofcapital gearing, inadequacy offinance, short

ofrawmaterials, outdated plant and machinery, low labor productivity

etc.

NEED OF THE HOUR:

The need of the hour for Indian SMEs is to upgrade theirtechnology, The availability ofadequate credit at affordable

cost, thus, becomes critical for Indian SMEs. SIDBI is the

national level principal financial institution

for promotion, financing and development ofSMEs.





Glass Bangles

Mechanical Engg. Excluding Transport Equipment:

Steel almirah, Rolling shutters, Steel chairs – all types, Steel

tables – all other types, Steel furniture – all other types,Padlocks, Stainless steel utensils, Domestic utensils – Aluminium

SME FINANCING:

SME Finance is the funding of small and medium sized

enterprises and represents a major function of the general

business finance market – in which capital for firms oftypes is

supplied, acquired, and costed/priced. Capital is supplied

through the business finance market in the form of bankloans and overdrafts; leasing and hire-purchase

arrangements; equity/corporate bond issues; venture capital

orprivate equity; and asset- based finance such as factoring and

invoice discounting.

Importance:

The economic and social importance ofSME

sector is well recognized in academic and policy literature. It isalso recognized that these actors in the economy may be

underserved, especially in terms offinance. This has led to

significant debate on the best methods to serve this sector.

Collateral based lending offered by traditional banks and finance

companies is usually made up of a combination ofasset-based

finance, contribution based finance, and factoring based finance,

using reliable debtors or contracts.

Information based lending usually incorporates financial statement

lending,credit scoring, and relationship lending.

Viability based financing is especially associated with venture capital.

http://en.wikipedia.org/wiki/Private_equity

http://en.wikipedia.org/wiki/Significant

http://en.wikipedia.org/wiki/Collateral

http://en.wikipedia.org/wiki/Asset-based_lending


http://en.wikipedia.org/wiki/Factoring_(finance)

http://en.wikipedia.org/wiki/Credit_score


http://en.wikipedia.org/wiki/Venture_capitalists

http://en.wikipedia.org/wiki/Significant

http://en.wikipedia.org/wiki/Collateral



http://en.wikipedia.org/wiki/Factoring_(finance)



http://en.wikipedia.org/wiki/Venture_capitalists

http://en.wikipedia.org/wiki/Private_equity





detailed financial information – which can actually assist the finance-

raising process;

• Banks are particularly nervous of smaller businesses

due to a perception that they represent a greater credit risk.Because the information is not available in other ways, SME’s

will have to provide it when they seek finance. They will

need to give a business plan, list of the company assets,

details of the experience of directors and managers and demonstrate

how they can give providers of finance some security for amounts

provided. Prospective lenders – usually banks – will then make a

decision based on the information provided. The terms of the loan

(interest rate, term, security, and repayment details) willdepend on the risk involved and the lender will also want to monitor

their investment. A common problem is often that the banks will be

unwilling to increase loan funding without an increase in the

security given. Aparticular problem of uncertainty relates to

businesses with a low asset base. These are companies without

substantial tangible assets which can be used to provide

security for lenders. When an SME is not growing

significantly, financing may not be a major problem.

However, the financing problem becomes very important when a

company is growing rapidly, for example when contemplating

investment in capital equipment or an acquisition. Few growing

companies are able to finance their expansion plans from cash flow

alone. They will therefore need to consider raising finance

from other external sources. In addition, managers who are

looking to buy-in to a business ("management buy-in" or "MBI")

or buy-out (management buy-out" or "MBO") a business from its

owners may not have the resources to acquire the

company. They will need to raise finance to achieve their

objective.



ROLE OF PUBLIC SECTOR BANKS IN SME FINANCING:

Banks are playing a major role in financing SMEs in India. Nearly 82%

of the total SME financing in year 2006-07 is through banks. And

among them the major share is of public sector banks i.e. 57%. Thus

it is clear that the most common source of finance for SMEs is Bank

Financing. There are no. of banks that help in assisting the

SMEs for financing.

The main channel used by the SMEs via Banks is Specialized

loans by various Banks. The Main reason for choosing bank loans by

SMEs compared to other sources offinancing like venture capital,

PE funding etc is that is only interest to be paid no stake is to be diluted thus the whole command of the SME is with the owner

only. There area number of Private as well as Public sector banks who

assist SME in Financing.

The role of Banks, in general, has become very important in the above

context The SME sector’s demands were comprehensively taken care of

by the Public sector Banks through several initiatives such as:

Single Window dispensation,

Quick decision with least Turnaround Time through specially

constituted SME Cells, and above all,

Better service. Cluster-based Schemes are also on the list of the

Bank’s initiatives. The Bank prioritized the following more

particularly:-

Provision of timely and adequate credit to the SMEs,

Encouraging Technology Up gradation, for better quality and

competitiveness oftheir product(s), and



Proactively detecting sick and viable units in time so as to nurse

them back to health through appropriate re-structuring.

Financing of Clusters with adequate and concessional Bankfinance on liberal terms in several pockets for specified activities

concentrated in these pockets, which would result in reducing

transaction cost and greater economies of scale.

Some Public sector Banks offering SME financing schemes are as

follows:

State Bank of IndiaState Bank of India has been playing a vital role in the

development of small scale industries since 1956.The Bank has

financed over 8 lakhs SSI units in the country. It has55 specialized

SSI branches, 99 branches in industrial estates and more than 400

branches with SIB divisions

The Bank finances for Small Business activities which are of special

significance to a large number of people as many of these

activities can be started with relatively lower investment and with no special skills on the part of the entrepreneurs. The

following are the SME products offered by State Bank Of India:

• Commodity Packed Warehouse Receipt Financing

• Traders Easy Loan Scheme

• SSI Loans

• Business Current Accounts

• Open Term Loan





needs of business and industries. The Bank has parameterized

products for transporters, dealers, traders, and vendors. In

addition, it has a separate Transaction Banking Group that has

expertise in products like cash management services, letter of credit,

bank guarantees and treasury products”

IDBI Bank provides following SME products:

• SulabhVyapar Loan

• Dealer Finance

• Funding Under CGFMSE

• Direct Credit Scheme-SIDBI

• Preferred Customer Scheme

• Vendor Financing Programme

• Lending against the security of future Credit Card Receivables

• Working Capital Financing

• Finance to Medical Practitioner

• SME Hosiery Special Current Account

Bank of Baroda

Bank of Baroda started its operation in the year 1908 in

Baroda. Its mission is"to be a top ranking National

Bank ofInternational Standards committed to augment stake



holders' value through concern, care and competence”. Bank of

Baroda offers following SME products and services

• Baroda Vidyasthali Loan

• Baroda Arogyadham Loan

• Baroda LaghuUdhyami Credit Card

• Baroda Artisans Credit Card

• Technology Upgradation scheme

• SME short term loans

• SME medium term loans

• Composite Loans

Canara BankCanara Bank was founded by Shri Ammembal Subba Rao

Pai, a great visionary and philanthropist, in July 1906, at

Mangalore, then a small port in Karnataka.

The Bank has adopted a Policy for lending to SME sector, in

tune with Govt. of India guidelines as per MSMED Act,

2006, which has come into force w.e.f. 2ndOctober,2006.

LOAN PRODUCTS

Schemes for Capital Investment

• Term loan for acquisition of fixed assets

http://www.canarabank.com/Upload/English/Content/LoanSME_TermLoan.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_TermLoan.doc



• Standby credit for capital expenditure

• Standby term loan scheme for Apparel Exporters

• Loan scheme for reimbursement of investment made in fixedassets by SMEs

• Soft loan scheme for Solar Water Heaters

• Scheme for Energy Savings for SMEs

• Technology Upgradation Fund scheme (TUFS) for textile & jute

industries in SME sector

• Credit linked capital subsidy scheme (CLCSS)

• Loans under Interest Subsidy Eligibility Certificate (ISEC)

Scheme of Khadi& Village Industries Commission (KVIC) to

eligible institutions.

Schemes for Working Capital

• Simplified Open Cash Credit (SOCC)

• Open Cash Credit (OCC)

•

Micro financing jointliability groups(Handloom weaver & Agarbathimanufacturer groups)

• Laghu Udhyami Credit Card (LUCC)

http://www.canarabank.com/Upload/English/Content/LoanSME_Credit.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_Apparel.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_Reimbrursement_scheme.doc


http://www.canarabank.com/Upload/English/Content/LoanSME_Solar_Water_Heater.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_Energy_Savings_Scheme.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_TUFS.doc



http://www.canarabank.com/Upload/English/Content/LoanSME_CLCSS.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_KVIC_ISEC.doc



http://www.canarabank.com/Upload/English/Content/LoanSME_SOCC.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_OCC.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_Micro_Financing.doc







http://www.canarabank.com/Upload/English/Content/LoanSME_LUCC.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_Credit.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_Apparel.doc



http://www.canarabank.com/Upload/English/Content/LoanSME_Solar_Water_Heater.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_Energy_Savings_Scheme.doc




http://www.canarabank.com/Upload/English/Content/LoanSME_CLCSS.doc





http://www.canarabank.com/Upload/English/Content/LoanSME_SOCC.doc

http://www.canarabank.com/Upload/English/Content/LoanSME_OCC.doc




http://www.canarabank.com/Upload/English/Content/LoanSME_LUCC.doc



• Bill of Exchange discounting facility to Small Entrepreneurs at

concessional rate of interest (BE-SE)

NABARD - SME INITIATIVES

NABARD is an apex development bank established for facilitating

credit flow for promotion and development of agriculture, small-scale

industries, cottage and village industries, handicrafts and other rural

crafts.

NABARD had selected five cluster and 50 additional clusters for

intensive development and has partnered with other government

agencies to promote rural industrialisation, to strengthen existing

clusters and to develop new clusters in FY06. Further, during FY08,

the cluster development programme was extended to 19 clusters, that

is, 17 clusters under participatory mode and 2 under intensive mode,

which took the total number of clusters adopted under this

programme to 61 (56 in partnership and 5 under intensive mode) asat end March 2008.

Realising the growth potential of SMEs, many banks have started

offering products and services to this segment as highlighted in this

chapter. Moreover, the SMEs have to offer more growth opportunities

due to globalisation; however, this growth strongly depends on the

SMEs’ ability to scale-up their capacity and embrace new technology, which is a major hurdle in present times. The banks can help them

overcome such hurdles and cater to them through innovative

products and services.

http://www.canarabank.com/Upload/English/Content/LoanSME_BE_SE.doc








In this regard the financing needs of small and medium enterprises

have drawn the attention of several financial institutions. The National

Bank for Agriculture and Rural Development (NABARD) has emerged

as a pioneer in the field of micro finance, thereby ensuring financial

inclusion for more than 5.8 crore poor households within its fold.

Dr. K G Karmakar, Managing Director, NABARD says, “NABARD's role

in the growth of the micro finance model has been multi-dimensional,

i.e. policy-formulation, financial innovations, technological

interventions, and institutional strengthening. Emphasis has been on

improving the access of the rural poor to integrated micro finance

services covering both savings and credit, rather than providing just

micro credit facilities. This entails improving access of the poor tomicro-finance in a sustainable manner rather than to offer credit in

the form of subsidies.

In order to improve access of the poor to formal banking, NABARD

launched Self help Group (SHG) Bank linkage model in 1992. Under

this scheme the poor form small groups and are encouraged to pool

their savings regularly. These savings are then used to make small

interest bearing loans to the members. Bank credit follows this stage.

NABARD has initiated several measures for the healthy growth of the

SHG linkage programme viz.- developing a conducive policy framework

through the provision of opening Saving Bank Accounts in the names

of SHGs and relaxation of collateral norms, simple documentation and

delegation of all credit decisions to SHGs; training and awareness

building among the stakeholders; mainstreaming the SHG Linkage

Programme as part of corporate planning and normal business activityof banks; encouraging Regional Rural Banks and Co-operative banks

to act as SHGs promoting institutions; setting up a micro-finance

development and equity fund in NABARD for meeting the promotional

costs of up scaling the micro-finance interventions; dissemination of



information through seminars, workshops and media and to provide

support to NGOs for promotion of SHGs.

The SHG Bank linkage programme has reportedly helped the rural

sector to avail of credit facilities to set up small enterprises and even toelevate their standard of living. A study conducted in Karnataka

showed that income levels per SHG member had increased

substantially over a period of three years. A recent study In Tamil

Nadu revealed that participation in credit and savings programmes

has enabled several families to send their children to school. The SHG

movement has ushered in women's empowerment and has helped

reduce child mortality, improve maternal health and has enabled the

poor to fight diseases due to better nutrition, housing and health.he most valuable impact of the linkage programme is that it has

brought about positive changes in the attitudes of banks towards

microcredit. The lending procedures in SHGs require branch managers

to attend group meetings, interact with members and then finalize his

lending opinion rather than spending more time in evaluating loan

documents backing the application for loans.

Another landmark has been the increasing expenditure on production

purposes and development of socially backward sections. This has led

to elevation of living standards of many households.

Moving towards a sound micro-financial sector is a big challenge for

the financial system of the country. The main task is not to provide

new institutions but to improve the access of the poor to the existing

banking network. This requires the design of new products and

delivery mechanisms. NABARD has been propagating and facilitating

the growth of the SHG linkage programme. However several challenges

still lay ahead: there is a need to check the uneven spread of the SHG-

Bank linkage programme in all parts of the country. NABARD has

initiated a three years “Pilot Project” in nine districts across nine

states in order to promote livelihood creation and employment

opportunities besides imparting relevant skills and development of





Micro finance is not new to State Bank of India. The bank's

association with non-government organizations (NGOs) or voluntary

agencies in extending financial help can be traced as far back as 1976

well before NABARD introduced SHG-Bank Credit Linkage Programmeas a pilot project in 1992.

SHG-BANK CREDIT LINKAGE PROGRAMME

SBI has actively participated in SHG-Bank Credit Linkage programme

since its inception in 1992 as a pilot project of NABARD. Since then

the Bank has made a steady progress in financing SHGs.

SBI is maintaining its position as a leader among Commercial Banks

in credit linking of SHGs and is a prime driver for the movement. The

bank has successfully initiated various measures toward widening its

SHG network and has started to leverage the vast SHG network for

various services.

SIDBI – SME OVERVIEW

Established in 1990, SIDBI is the principal financial institution that

is engaged in promotion, financing and development of SMEs. It also

coordinates functions of other institutions engaged in SME lending.

SIDBI provides financial assistance to small scale sector under

various categories, namely refinance assistance to primary lending



institutions (PLIs), indirect equity assistance, direct assistance, and

promotional and developmental assistance.

The range of products and services offered by SIDBI for SMEs are

direct finance, bills finance, refinance, international finance, microfinance and fixed deposit schemes. It also provides government

subsidy schemes to the SMEs in textile, leather and food processing

industries.

Further, SIDBI also acts as a nodal agency for implementing the

government’s various schemes like Technology Up gradation Fund

Scheme for the textile industry (TUFS), Scheme of Technology Up

gradation/Setting up/Modernization/Expansion of food processingindustries, Integrated Development of Leather Sector Scheme (IDLSS)

etc.

SME Financing and Development Project (SMEFDP)

SIDBI is an implementing agency of the SME Financing and

Development Project (SMEFDP), which is a World Bank-led multi-

agency/ multi-activity project for financing and developing SMEs. The

project was introduced with an objective to attend to demand andsupply-side issues of MSMEs through financial and non-financial

services. The Department of Financial Services, Ministry of Finance,

is the nodal agency and World Bank, DFID, UK; KfW, Germany, and

GTZ, Germany are the international partners for the project.

Key Highlights

• The entire credit allocation was utilised to benefit 927 MSMEs

• The BDS market was developed by strengthening both the

supply-side (BDS providers) and demand side (sensitisation and

demand articulation of MSMEs)



• Extended capacity building support was provided to SMERA for

scaling up exclusive rating of MSMEs and to CIBIL for setting up

SME Commercial Bureau.

Apart from this, SIDBI has set up various institutions for developmentand financing of SMEs, namely

• Credit Guarantee Fund Trust for Micro & Small Enterprises

(CGTMSE)

• SIDBI Venture Capital Ltd (SVCL)

• India SME Technology Services Ltd (ISTSL)

•

SME Rating Agency of India Ltd (SMERA)





VIJAY MALLYA





Vijay Mallya's Career Debut : Mallya took over as Chairman of the

United Breweries Group in 1983

Vijay Mallya's Address : 333 Technology Drive Canonsburg,

Pennsylvania 15317 United States

Vijay Mallya's Education : La Martiniere Boys' College, Calcutta in

Kolkata.

Vijay Mallya's PhD : University of Southern California

Vijay Mallya's Doctorate : University of Southern California

Vijay Mallya's Father Name : Vittal Mallya

Vijay Mallya's Mother Name : Shrimati Lalitha Mallya

Vijay Mallya's Wife Name : Rekha

Vijay Mallya's Son Name : Sidhartha Vijay Mallya

Vijay Mallya's Daughter Name : Leana Mallya

Vijay Mallya's Daughter Name : Tanya Mallya

Vijay Mallya's Countries Visited : U.S.A., France, Germany, U.K., Italy,

Switzerland, Russia, South Africa, Singapore, U.A.E. and Hong Kong.

Vijay Mallya's Career : Rajya Sabha M.P.Chairman- United Breweries Group

Kingfisher Airlines

Force India

Royal Challengers Bangalore

United Racing and Bloodstock Breeders



Vijay Mallya's Occupation : Chairman of : United Breweries Group,

Kingfisher Airlines, Force India F1 Team, Royal Challengers Bangalore,

East Bengal FC, URBB

Vijay Mallya's Sports, Clubs, Favourite Pastimes and Recreation :

Keen sportsman and an ardent aviator and yachtsman of distinction;

has won trophies on the professional car racing circuits; participates

in and also supports various sporting events worldwide, particularly

for the underprivileged

Vijay Mallya's Political career :

Mr. Mallya is a MP in Rajya Sabha. He entered politics in 2000 and

replaced Subramanian Swamy as the president of the Janata Party,

his party contested for almost 224 seats during the Karnataka State

legislative election, but the result of the election didn’t see the light of

success, he couldn’t able to win a single seat.

Vijay Mallya's Social and Cultural Activities and other Special Interests: Founded the Vittal Mallya Scientific Research Foundation, Bangalore;

co-promoted the Mallya-Aditi International School, Bangalore;

established the Mallya Super Speciality Hospital, Bangalore.

VIJAY MALLYA –THE FLAMBOYANT

Vijay Mallya, the flamboyant CEO of United Breweries – the company

that owns the Kingfisher brand – is one of the most flamboyant CEOs

in Asia. Vijay Mallya believes in leading his brand from the front by

leveraging his personality.



Vijay Mallya has built a reputation for splurging his money in the

public. He is the key sponsor to many of India’s top derby

championships, he owns a yacht once owned by Elizabeth Taylor, flies

a personal Boeing business jet, owns super stylish homes in London,

US, Dubai and India. Vijay Mallya is a diehard party animal, and isseen as the personification of a luxurious life!

Vijay Mallya’s associations with the rich, trendy and the luxurious

have rubbed on his business venture and the brands. Similarly to

Richard Branson, he recently launched Kingfisher Airlines, which

draws a lot of its brand equity from Mallya himself.

Breweries:

Mallya took over as Chairman of the United Breweries Group in 1983.

Since then, the group has grown into a multi-national conglomerate of

over sixty companies with an annual turnover which has increased

by 639% to US$11.2 billion in 1998-1999 .The Local business areas of

the group encompass alcoholic beverages, life sciences, engineering,

agriculture, chemicals, information technology, aviation and leisure.

He owned McDowell Crest, which took loans in crores of rupees fromthe general public .Kingfisher Premium Lager Beer is currently

available in 52 countries outside India and leads the way among

Indian beers in International market. It has been ranked among top 10

fasting growing brand of UK. UNITED SPIRITS LIMITED (USL) has

a portfolio of more than 140 brands of which 19 are millionaire

brands(selling more than million cases a year) and enjoys a strong59%

market share for its first line brands in India. United Spirits recorded

global sales of 90 million cases for the year ended on March 31,2009. With the acquisition of BOUVET LADUBAY in 2006,the UB Group has

made a strategic entry into ofthe wines category. Bouvet-Ladubay,

located in the Loire valley of the Saumur region in France, has a

heritage ofover 156years.





Formula one

VitantonioLiuzzi driving for Mallya'sFormula One team,Force India,

at the2009 Japanese Grand Prix.

In 2007, Mallya and the Mol family from The Netherlands boughttheSpyker F1 team for 88 million euros.] The team changed its name

toForce India F1 from the 2008 Season. Team's car VJM-01 was

named after its owners Vijay Mallya, Jan Mol andMichiel Mol.

Mallya also represents India in theFIA World Motor Sport Council,

where he has a seat from 2009 to 2013.

Cricket

Indian Premier League is a cricket tournament being organised by theBoard of Control for Cricket in India (BCCI) and backed by the

International Cricket Council (ICC). For the inaugural tournament

held in Apr–Jun 2008, the BCCI had finalised a list of 8 teams who

will be participating in the tournament. The teams representing 8

different cities of India, including Bangalore, were put up on auction

in Mumbai on 20 February 2008 and the Bangalore team was won by

Vijay Mallya, who paid US$111.6 million for it. This was the second

highest bid for a team in the IPL, next only to Mukesh Ambani'sReliance Industries' bid of $111.9 million for the Mumbai team.

Bollywood actresses Katrina Kaif and Deepika Padukone, and

Sandalwood film stars Ramya and Puneeth Rajkumar are the brand

ambassadors of the team.

Football

http://en.wikipedia.org/wiki/Vitantonio_Liuzzi


http://en.wikipedia.org/wiki/Formula_One

http://en.wikipedia.org/wiki/Force_India

http://en.wikipedia.org/wiki/2009_Japanese_Grand_Prix

http://en.wikipedia.org/wiki/Netherlands

http://en.wikipedia.org/wiki/Spyker_F1

http://en.wikipedia.org/wiki/Vijay_Mallya#cite_note-9


http://en.wikipedia.org/wiki/Force_India_VJM01

http://en.wikipedia.org/wiki/Michiel_Mol

http://en.wikipedia.org/wiki/FIA_World_Motor_Sport_Council

http://en.wikipedia.org/wiki/File:Vitantonio_Liuzzi_2009_Japan_3rd_Free_Practice_1.jpg


http://en.wikipedia.org/wiki/Formula_One


http://en.wikipedia.org/wiki/2009_Japanese_Grand_Prix

http://en.wikipedia.org/wiki/Netherlands

http://en.wikipedia.org/wiki/Spyker_F1

http://en.wikipedia.org/wiki/Vijay_Mallya#cite_note-9


http://en.wikipedia.org/wiki/Force_India_VJM01

http://en.wikipedia.org/wiki/Michiel_Mol

http://en.wikipedia.org/wiki/FIA_World_Motor_Sport_Council



Mallya's United Breweries sponsors theEast Bengal andMohun

Bagan football clubs inKolkata where Mallya spent his childhood.

He also was part of the consortium that acquiredQueens Park

Rangers FC; the consortium also includedBernie Ecclestone,Flavio

Briatore andLakshmi Mittal.

MISSION STATEMENT FROM THE TYCOON

We constitute a large, global group based in India. We associate

with world leaders in order to adopt technologies and processesthat will enable a leadership position in a large spectrum of

activities.

We are focused on assuming leadership in all our target markets.

We seek to be the most preferred employer wherever we operate.

We recognize that our organization is built around people who

are our most valuable asset.

We will always be the partner of choice for customers, suppliers

and other creators of innovative concepts. We will continually increase the long-term value of our Group for

the benefit of our shareholders.

We will operate as a decentralized organization and allow each

business to develop within our stated values.

http://en.wikipedia.org/wiki/East_Bengal_Club

http://en.wikipedia.org/wiki/Mohun_Bagan


http://en.wikipedia.org/wiki/Kolkata

http://en.wikipedia.org/wiki/Queens_Park_Rangers_FC


http://en.wikipedia.org/wiki/Bernie_Ecclestone

http://en.wikipedia.org/wiki/Flavio_Briatore


http://en.wikipedia.org/wiki/Lakshmi_Mittal

http://en.wikipedia.org/wiki/East_Bengal_Club



http://en.wikipedia.org/wiki/Kolkata



http://en.wikipedia.org/wiki/Bernie_Ecclestone



http://en.wikipedia.org/wiki/Lakshmi_Mittal







Kingfisher airlines proved out to be the most glamorous domestic

airlines.

• In just 10 months from launch, Kingfisher Airlines has received 3

International Awards. The first was the “Best New Airline of the yearaward in the Asia Pacific and Middle East region” given by the Centre

for Asia Pacific Aviation. The second was the “Skytrax award for

service excellence”. Skytrax, London is the leading independent

research and quality evaluation agency for the World Air Transport

Industry. The latest addition to the list of laurels is the “Best New

Domestic Airline for Excellent Services and Cuisine” award from

Pacific Area Travel Writers Association (PATWA), one of the biggest

travel writers’ organizations in the world.

• After Mallya’s successful airline venture, it was time now for

Entertainment industry. And what better than joining hands with

NDTV in launching India’s first lifestyle channel – NDTV Good Times.

UB group owned Kingfisher brand took over the charge for this exotic

channel’s promotion and it came into being on September 7, 2007.

• Vijay Mallya, a sports lover, bought Spykar F1 team along withMicheil Mol in October 2007 for 88 million euros. It was a 50-50 joint

venture between him and Mol, a director of Spyker Formula One, of

the Netherlands. The world saw India’s first Formula One team –

Force India came into existence

• Vijay Mallya owns one of the largest private yachts in the world

called Indian Empress

HALL OF FAME

Co-owns a Formula One team, Force India, with Dutch

businessman Michiel Mol.



Vijay Mallya is the Chairman of public companies both in India as

well as in the USA. He has been the Chairman of Aventis

Pharma India (previously Hoechst) as well as the Chairman of Bayer

CropScience in India (previously Agrevo) for over 20 years, in

addition to his Chairmanship of several other corporations.

Vijay Mallya has received several professional awards both

in India and overseas. He was also conferred a Doctorate of

Philosophy in Business Administration, by the Southern California

University, Irvine. He has also been nominated as a Global Leader

for Tomorrow by the World Economic Forum.

Mallya was nominated ‘global leader for tomorrow’ by the WorldEconomic Forum, Davos, in 1995

He has served as an elected member of the Rajya Sabha (the upper

house) of the Indian Parliament and has served as a member of

various Parliamentary committees and on defense, science and

technology, environment and forests, and industry.

He was also conferred a Doctorate of Philosophy in Business Administration, by the Southern California University, Irvine.

He is also the chairman of both the Federation of Motor sports

Clubs in India (FMSCI) and Motor sport Association of India (MAI).













Hardwork:Despite having his father’s own company he worked

there for just Rs.400 at the initial level. This shows the hard work

and dedication from this individual.

Leadership skills: After his father’s death he took the charge of

UB group at an early age of 28. He turned his father’s 50 crore

company into 5000 crore unit.

Passionate: It was his own passion and interest which he turned

into business units. He turns his passion into his business. It

was his passion which led him to purchase RCB of IPLand

FORCE INDIAa Formula one team.4.

Mammoth: Out of all the liquor consumption throughout the

world 9% is from the UB which shows the mammoth

contribution ofthis group.





Documents

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