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Cgtmse ppt


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Cgtmse ppt

  2. 2. Definition of MSE as defined in MSMED Act 2006
  3. 3. 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.
  4. 4. 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.
  5. 5. 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 or 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.
  6. 6. About fee and processor to claim online One time Guarantee fee Annual service fee Credit limits North eastern region others including Sikkim Up to RS.5 lacs 0.75% 1.00% 0.5% Above RS.5 lacs to 0.75% Rs. 50 lacs 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.
  7. 7. 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.
  8. 8. 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
  9. 9. 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.
  10. 10. 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.
  11. 11. 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.
  12. 12. 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.
  13. 13. 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.
  14. 14. 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.
  15. 15. Data Analysis  Cross tabulation study between gender and their preferences about taking their CGTMSE loan in bank Preferences Gender Private Male Female Total Total 8 17 2 4 10 21 From the fig. is interpreted that there is more preferences given in gov. bank. 25 6 31 20 17 15 10 5 8 2 4 0 private male female
  16. 16. Cross tabulation Study in age and their view about need of promotion in CGTMSE Scheme age 20-30 31-40 41-50 51-60 total need 5 6 7 4 22 no total need 2 1 3 3 9 From the fig. is interpreted that there is need for promotion. 7 7 10 7 31 Need to promote 100% 80% 2 1 3 3 60% 40% 5 6 7 4 20% 0% 20-30 31-40 41-50 51-60 no need need
  17. 17. AWERNESS LEVAL OF CGTMSE X1= view about scheme is mandatory or not X2= view about if the scheme is mandatory will is affect the grow of the scheme From the fig. is interpreted that there is more Promotion is needed. 60 50 40 30 20 10 0 CGTMSE 8 awer not awer 23 17 15 x2 x1 35 20 12 3 5 8 2 6
  18. 18. Based on secondary data  Performance of CGTMSE Reginal rural banks 0.4% From the fig. is interpreted that PSU bank have lending high than rest of the bank. private bank lending 3% institution 6% SBI Associare 24% PSU bank 67%
  19. 19. Range of loan in rupees under CGTMSE No. of approvals against loan amount range 100000 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 90997 16501 Up to 1 1 lakh lakh to 2 lakh 19665 2 to 5 lakh 10987 9936 1819 129 5 to 10 10 to 25 25 to 50 50 to lakh lakh lakh 100 lakh
  20. 20. Best sector under CGTMSE 7% 6% 9% 1% 6% 71% From the fig. is interpreted that manufacturing sector has cover wide area of CGTMSE lending fund. food and beverages textiles information technology services manufacturing other
  21. 21. Top 7 States to utilize CGTMSE fund State/Union CGTMSE Territory (Cr) Uttar 312.07 Pradesh Kerala 354.27 Gujarat 376.77 West Bengal 404.97 Maharashtra 418.79 Karnataka 615.26 Tamil Nadu 646.99 Total 3129.12 cr 700 600 500 400 312.07 300 200 100 0 CGTMSE % 6.54 7.42 7.89 8.49 8.78 12.89 13.56 65.57 % 615.26 354.27 376.77 404.97 Top 7 States to utilize CGTMSE fund 418.79 646.99 Column1 Column2 Column3 Column4 Column5 Column6 Column7
  22. 22. Let, a=0.05, x2(m-1)(n-1) =x2 3, 0.05 = 3.8415 X2=(Oij-Eij)2 = 3.853 Eij Finding  Tools and technique  Here,x2>x2 3, 0.05 so reject hypothecs 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 fo age need no need fe (fo-fe)2 5 4.968 2 total (fo-f1)/fe 0.001 2.013 2.323 0.104 0.448 20-30 5 2 7 6 4.968 1.065 0.214 31-40 6 1 7 1 2.032 1.065 0.524 41-50 7 3 10 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 51-60 4 3 CONCLUTION total 22 9 7 31 total 3.853
  23. 23. 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/ Privat Total gender e bank Male 8 17 25 F0 Fe (Fo-Fe)2 8 8.065 0.004225 (Fo-Fe)2 Fe 5.2387 Female 4 6 17 16.94 0.0036 2.1251 10 21 31 2 1.94 0.0036 0.0019 4 Total 2 4.065 0.004225 0.00104 total 31 0.01565 7.367 Let, a=0.05, x2(m-1)(n-1) =x2 1, 0.05 = 3.8415 X2=(Oij-Eij)2 = 7.367 Eij Here,x2>x2 1, 0.05 so reject hypothecs
  24. 24. 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)
  25. 25. 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.
  26. 26. 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
  27. 27. Bibliography         Guarantee Trust Fund for Small and Medium Enterprises 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 › SME Finance KEN BLACK book fifth addition of Business Statistics 2010.
  28. 28. 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 1 2 3 4 strongly disagree 5 2. . Do you think that non-mandatory nature of CGTMSE lending has reduced lending under CGTMSE? Strongly agree Neutral disagree strongly disagree 1 2 3 4 5
  29. 29. SURVEY QUESTIONNAIRE ADMINISTERED TO 21 BRANCHES MANAGERS 3. Getting approval for every sanction has contributed to poor growth of CGTMSE lending. Strongly agree Neutral disagree strongly disagree 1 2 3 4 5 4. Delay in getting the guaranteed sum from CGT keeps the scheme unattractive to bankers. Strongly agree Neutral 1 2 3 5.Branch level marketing of CGTMSE will help to increase lending. disagree 4 strongly disagree 5 Strongly agree Neutral disagree 1 2 3 4 6. More marketing by is needed to develop this scheme Strongly agree Neutral disagree 1 2 3 4 7. Landing a fund without any secondary security is leading to misuse of fund by borrower strongly disagree 5 Strongly 1 strongly disagree 5 agree 2 Neutral 3 disagree 4 strongly disagree 5
  30. 30. 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 .
  31. 31. SURVEY QUESTIONNAIRE ADMINISTERED TO 31 CUSTOMERS 6.Bank should conduct awareness camp about the scheme to make MSE aware about the scheme. Strongly agree Neutral disagree strongly disagree 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
  32. 32. A year-wise growth position Period Active MLIs 9 Number of Proposals Approved 951 Credit Amount Approved (Rs. in Lakh) 606 FY 2000-01 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