Micro, Small and Medium Enterprises (MSMEs) play a major role in economic development, particularly in emerging countries.
MSMEs :
Contributes to the economic growth,
Enormous potential for growth
Potential for employment and income generation
for vast masses of the country.
Government pronouncements about “Make in India” are fundamentally based on these convictions.
There is heightened attention by the international community on MSME sector.
This is primarily because of the critical importance of job creation in the recovery cycle following the recent financial crisis, and the MSME’s potentials in that respect.
In Indian economy, MSME sector contribute :
45 % of the manufacturing output.
40 % of the exports.
There are 467.56 lakh enterprises in the MSME sector.
Provide the largest share of the employment after agriculture. Employment opportunities to 10.62 crore people across the country.
An Analysis of Micro, Small and Medium Enterprises in IndiaABDUL MOIZZ
The presentation is about a brief study of MSME sector in India regarding GDP, employment and inclusive growth. The study also covers various challenges facing by this sector and also the governmental intervention for solutions of these challenges.
Micro, Medium and Small Enterprises
It is helpful for enterpreneurs and persons having interest in economy and want to gain knowledge regarding society.
You can contact me directly for any type of assistance
MSME - All you need to know about this sectorshubhadeep saha
here in the slide, I have presented all the necessary information regarding MSME i.e Micro, Small & Medium Enterprises. From the opportunities, challenges to the benefits of MSMED act, loan schemes, projects that the FMC has submitted till date are all presented. although I couldn't provide all the happenings in MSME this presentation can be named as MINI WIKI for MSME. in recent days msme has contributed a lot to the Indian economy and makes it stronger. also, the MSME sector provides huge employment that has surely lower down the tension of the govt. e6arao aro onek ki6u a6e, jeta apnara net ghatle bujhte parben, apatoto ja korar ata diei korun. porer ta pore dekha jbe
Micro, Small and Medium Enterprises, Key Government Schemes and Initiatives to support MSMEs, Current Financing Landscape for MSMEs, Issues and Challenges for MSMEs
An Analysis of Micro, Small and Medium Enterprises in IndiaABDUL MOIZZ
The presentation is about a brief study of MSME sector in India regarding GDP, employment and inclusive growth. The study also covers various challenges facing by this sector and also the governmental intervention for solutions of these challenges.
Micro, Medium and Small Enterprises
It is helpful for enterpreneurs and persons having interest in economy and want to gain knowledge regarding society.
You can contact me directly for any type of assistance
MSME - All you need to know about this sectorshubhadeep saha
here in the slide, I have presented all the necessary information regarding MSME i.e Micro, Small & Medium Enterprises. From the opportunities, challenges to the benefits of MSMED act, loan schemes, projects that the FMC has submitted till date are all presented. although I couldn't provide all the happenings in MSME this presentation can be named as MINI WIKI for MSME. in recent days msme has contributed a lot to the Indian economy and makes it stronger. also, the MSME sector provides huge employment that has surely lower down the tension of the govt. e6arao aro onek ki6u a6e, jeta apnara net ghatle bujhte parben, apatoto ja korar ata diei korun. porer ta pore dekha jbe
Micro, Small and Medium Enterprises, Key Government Schemes and Initiatives to support MSMEs, Current Financing Landscape for MSMEs, Issues and Challenges for MSMEs
• The 'District Industries Centre' (DICs) programme was started by the central government in 1978 with the objective of providing a focal point for promoting small, tiny, cottage and village industries in a particular area and to make available to them all necessary services and facilities at one place.
• The District Industries Centre is the institution at the District level, which provides all the services and support facilities to the entrepreneur for setting up Micro, Small and Medium Enterprises. This included identification of suitable schemes, preparation of feasibility reports, arrangements for credit facilities, machinery and equipments, provision of raw materials and development of industrial clusters etc.
• Established in 1940
• Vision is to be primary driving force of commercially sustainable industrial development .
• Industrial development Corporations are companies or agencies in India which were established at various times under the policy of Government of India for the promotion of small - scale industries.
• A Central Industrial Finance corporation was set up under the industrial Finance corporations Act, 1948 in order to provide medium and long term credit to industrial undertakings which fall outside normal activities of commercial banks.
• The State governments expressed their desire that similar corporations be set up in states to supplement the work of the Industrial financial corporation. State governments also expressed that the State corporations be established under a special statue in order to make it possible to incorporate in the constitutions necessary provisions in regard to majority control by the government, guaranteed by the State government in regard to the payment principal. In order to implement the views Expressed by the State governments the State Financial Corporation bill was introduced in the Parliament.
• Small Industries Development Bank of India (SIDBI), set up on April 2, 1990 under an Act of Indian Parliament, is the Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector and for Co-ordination of the functions of the institutions engaged in similar activities.
• It was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India.
• The purpose is to provide refinance facilities and short term lending to industries. Its headquarters is in Lucknow.
• Former Deputy Managing Director is Shri N.K. Maini. Dr. Kshatrapati Shivaji is the new Chairman and Managing Director of the organisation.
Challenges of entrepreneurship development in rural area and business educationPrashant Arsul
The majority of the population lives in villages, the village is the back bone of the country and village industries play an important role in the national economy, particularly in the rural development. Rural entrepreneurship is not only important as a means of generating employment opportunities in the rural areas with low capital cost and raising the real income of the people, but also its contribution to the development of agriculture and urban industries. Rural entrepreneurship can be considered one of the solutions to reduce poverty, migration, economic disparity, unemployment and develop rural areas and backward regions.
Entrepreneurship development - Micro Small and Medium EnterprisesSOMASUNDARAM T
Meaning; Definition; Types; product range; capital investment; ownership patterns; Importance and role played in the development of the Indian economy; Problems and Remedies; Sickness in MSME’s; Meaning and definition of a sick industry; Causes of industrial sickness; Preventive and remedial measures for sick industries.
Through my oversight of Studley’s Community Involvement Committee, a select group of employees from across Southern California engaged in some friendly competition on behalf of a great cause, Camp Pendleton\'s YMCA. Regional offices competed in the grueling 5-mile Mud Run. Studley also received great exposure at the high profile event as a corporate sponsor.
• The 'District Industries Centre' (DICs) programme was started by the central government in 1978 with the objective of providing a focal point for promoting small, tiny, cottage and village industries in a particular area and to make available to them all necessary services and facilities at one place.
• The District Industries Centre is the institution at the District level, which provides all the services and support facilities to the entrepreneur for setting up Micro, Small and Medium Enterprises. This included identification of suitable schemes, preparation of feasibility reports, arrangements for credit facilities, machinery and equipments, provision of raw materials and development of industrial clusters etc.
• Established in 1940
• Vision is to be primary driving force of commercially sustainable industrial development .
• Industrial development Corporations are companies or agencies in India which were established at various times under the policy of Government of India for the promotion of small - scale industries.
• A Central Industrial Finance corporation was set up under the industrial Finance corporations Act, 1948 in order to provide medium and long term credit to industrial undertakings which fall outside normal activities of commercial banks.
• The State governments expressed their desire that similar corporations be set up in states to supplement the work of the Industrial financial corporation. State governments also expressed that the State corporations be established under a special statue in order to make it possible to incorporate in the constitutions necessary provisions in regard to majority control by the government, guaranteed by the State government in regard to the payment principal. In order to implement the views Expressed by the State governments the State Financial Corporation bill was introduced in the Parliament.
• Small Industries Development Bank of India (SIDBI), set up on April 2, 1990 under an Act of Indian Parliament, is the Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector and for Co-ordination of the functions of the institutions engaged in similar activities.
• It was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India.
• The purpose is to provide refinance facilities and short term lending to industries. Its headquarters is in Lucknow.
• Former Deputy Managing Director is Shri N.K. Maini. Dr. Kshatrapati Shivaji is the new Chairman and Managing Director of the organisation.
Challenges of entrepreneurship development in rural area and business educationPrashant Arsul
The majority of the population lives in villages, the village is the back bone of the country and village industries play an important role in the national economy, particularly in the rural development. Rural entrepreneurship is not only important as a means of generating employment opportunities in the rural areas with low capital cost and raising the real income of the people, but also its contribution to the development of agriculture and urban industries. Rural entrepreneurship can be considered one of the solutions to reduce poverty, migration, economic disparity, unemployment and develop rural areas and backward regions.
Entrepreneurship development - Micro Small and Medium EnterprisesSOMASUNDARAM T
Meaning; Definition; Types; product range; capital investment; ownership patterns; Importance and role played in the development of the Indian economy; Problems and Remedies; Sickness in MSME’s; Meaning and definition of a sick industry; Causes of industrial sickness; Preventive and remedial measures for sick industries.
Through my oversight of Studley’s Community Involvement Committee, a select group of employees from across Southern California engaged in some friendly competition on behalf of a great cause, Camp Pendleton\'s YMCA. Regional offices competed in the grueling 5-mile Mud Run. Studley also received great exposure at the high profile event as a corporate sponsor.
MSME Sector - Growth, Challenges & Opportunities Resurgent India
The MSME sector contributes in a significant way to the growth of the Indian economy across the realms of production system, employment generation, national output, exports etc. The MSME Sector comprises of approximately 48 million units that produce more than 6,000 products ranging from traditional to high-tech items. The sector is driving sustainable growth in Indian economy by providing employment to around 111 million people, accounts for 45% of the manufacturing output, 40% of the country's exports and contributes 8-9% to the country's GDP.
TRANSPORT DOCUMENT more used for sea transport, road transport and air transport are CMR document, Bill of Lading, Airway Bill and Multimodal Bill of Lading.
INTERNATIONAL TRADE DOCUMENTS used in Export and Import Procedures are Commercial Invoice, Packing List, Certificate of Origin, Irrevocable Letter of Credit, Bill of Lading and CMR Document.
The development of the concept of HRD, HRD practice in Indian and Global Context, The Profession of HRD and Implementation, The Challenges of HRD on 21st Century .....
This is a one day program for organizing, leading and facilitating effective teams. Participants will take part in a range of discussions, activities and exercises to learn the key elements needed for an effective and efficient team.
Empowering MSMEs - Policies of Financial Regulator - Part - 5Resurgent India
To ensure formal finance to priority sectors such as agriculture and MSME, Priority Sector Lending guidelines have been in place for commercial banks since 1972. Under these guidelines, domestic commercial banks are required to allocate 40 percent of the net bank credit for priority sectors (32 percent norm for foreign banks.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Small Scale Industries play a very vital role in the national economy. They help in generating employment with minimum
possible investment and play a very vital role in promoting exports. Therefore, the Government has announced various schemes and policies for the promotion of Small Scale Industries to ensure that control over production is widely distributed. As per the present definition, an industry having investment of upto Rs. 1 crore in plant and machinery is defined as Small Scale Industry.
Decoding of government of india 20 lakhs crore packageRajivRoy28
The follwing article decodes Government of India Announcement regarding COVID 19 Economic Package its vision/purpose, its intended usage, its implication in Indian circuit.
INDIAN ECONOMY: CHALLENGES AND EXPECTATIONSNeha Sharma
The Reserve Bank of India has recently released a small dose of liquidity by reducing Cash Reserve Ratio (CRR) by 0.5% for the commercial banks. Government borrowings have swallowed significant resources from the banking sector in recent months. The Liquidity with banking sector is still a major issue.
Acomplete survey of khushhali bank,the first microfinance bank in pakistan, its investment in different sectors for the development of the economic conditions of pakistan, credit lines and the product it offers for its customers
Similar to MSME Sector in India- An overview of the policy ecosystem (20)
Reserve Bank of India (RBI) is the debt manager for 29 State Governments and the Union Territory of Puducherry as also the banker to the State Governments except Government of Sikkim.
This is in terms of their agreement with RBI under Section 21 A of the Reserve Bank of India Act 1934.
RBI makes advances to State Governments to tide over mismatches in the cash flows of their receipts and payments. Such advances are termed as Ways and Means Advances (WMA).
WMA : Repayable in each case not later than
three months from the date of the making of the advance.
Governed by Section 17 (5) of the RBI Act.
The Reserve Bank has been extending such advances to State Governments since 1937.
Under this provision, the maximum amount of WMA by the Reserve Bank and the interest charged thereon are regulated by agreements with the State Governments
Based on he recommendations of various committees Groups constituted.
RBI, a unique central bank, has agreements with the sub-national Governments to act as banker.
The revised WMA quantum works out to `32,225 crore for all the States.
Once WMA limits are prescribed, States have the full freedom to access it and it becomes an autonomous component of liquidity over which the central bank has least control.
SAVINGS SAVE MONEY FOR LIFE CYCLE NEEDS
DO NOT LOOSE YOUR HARD EARNED MONEY, ALWAYS SAVE IN A BANK ACCOUNT SAVING ACCOUNT IN A BANK IS THE KEY TO ALL OTHER SERVICES
BANK IS NOW AVAILABLE AT YOUR DOOR STEP
Safety , liquidity and profitability should be the investment mantras.
Bank depositors, investors in capital market need to financial planning, framing own budget, horizon of savings, borrowings, investment mantras, financial inclusion, financial products, risk management ,net banking, mobile banking, payment banks to abreast with the developments in financial institutions, products and regulation. Investment awareness should be a part of financial literacy. The depositors and investors should update their domain knowledge, consumer protection measures and tax treatment etc.
Licensing new banks in private sector is a bold step in the path of financial sector reforms. In fact the ball was set rolling after the Union Finance Minister in his Budget Speech 2010-11 made a significant announcement that: “RBI is to consider giving some additional banking licenses to private sector players.” The objective is clear and loud: to extend banking outreach, instill competitive efficiency, bring in new technology and achieve inclusive growth.
RBI issued the final “Guidelines for Licensing of New Banks in the Private Sector” in February 2013 after taking into account the important amendments to the Banking Regulation Act, 1949, feedbacks received from the public, and consultation with the Central Government.
An innovative corporate structure of the promoters of banks is prescribed. Entities / groups in the private sector and entities in the public sector shall be eligible to promote a bank through a Non–Operative Financial Holding Company (NOFHC). The corporate structure is designed to ring-fence the banks from spill-over risks from other entities of the group.
Financial inclusion has emerged as major policy plank of the Centre and RBI. The task is challenging with large population and the geographical spread of our country. The data released from the recent Census of India shows that only 54.4 per cent of rural households have access to banking services
RBI received 26 applications for bank license. On the recommendations of a High Powered Committee headed by Dr Bimal Jalan, former RBI Governor, RBI, issued "in principle" approval to two entities viz IDFC ( an NBFC) and Bandhan( NBFC-MFI) to set up banks. Presently they are functioning as NBFCs; they need to obtain license from RBI under Sec 22 of the Banking Regulation Act, 1949.
. The earlier experimentation of bank licensing infused the much needed competition and technology in the banking sector. Notably, the business models adopted by these banks support class banking, profit maximization and risk-taking. Expectedly, the new generation banks would bring an evolutionary change to meet the “needs of modern economy” and alongside “improve access to banking services” to the lower strata of the society.
India’s Resilient External Debt
Summary:
The official documents published by GOI and RBI make incisive analysis of the composition, size, sustainability, trend and overall management of India’s external debt.
As per RBI, the country’s external debt stock which stood at US$ 405 billion as at June-end 2013 has increased to US$ 450.1 billion as at June-end 2014 registering an increase of 11.1 per cent.
According to IMF, debt service -to-export ratio is a key indicator as a measure of repaying capacity of a country. The lower the ratio, the less vulnerable is the economy to external shocks. The debt service ratio of India which peaked 35.3 per cent in 1990-91 in the wake of Balance of Payment crisis declined to 16.6 per cent in 2000-01 and further brought down to a more comfortable level of 5.9 per cent in 2013-14. The import cover of reserves, which stood at 9.5 months at end-March 2011 has declined to 7.0 months at the end-March 2013, still above comfort level. The CAD to GDP ratio deteriorated to 4.7 per cent in 2012-13, mainly on account of slowdown in major trading partners and rise in gold imports. It, however, improved to 1.7 per cent in 2013-14 due to measures taken by policy makers. The rising level of external debt does not necessarily translate into increasing debt burden, as it would also depend on the growth, growth potential of the economy and the export earnings.
I
ndia’s external debt is characterized by resilience and sustainability. The country’s external debt statistics are compiled and disseminated by Government of India (GOI) and Reserve Bank of India (RBI) on a quarterly basis. As per the standard practice, the external debt data for the quarter ending March and June are released by RBI; the data as at September-end and December-end are disseminated by the Ministry of Finance, GOI. Further, Ministry of Finance publishes every year “India’s External Debt-A Status Report” as at March-end. These official documents make incisive analysis of the composition, size, sustainability, trend and overall management of India’s external debt.
As per RBI, the country’s external debt stock which stood at US$ 405 billion as at June-end 2013 has increased to US$ 450.1 billion as at June-end 2014 registering an increase of 11.1 per cent.
The composition of India’s external debt is shown below:
[Amount: US$ billion]
Composition June 2013 June 2014
Multilateral 51.72 53.74
Bilateral 24.82 24.72
Trade Credit 17.53 16.04
Commercial Borrowing 135.81 153.85
NRI Deposits 71.12 106.25
Short-Term ( Trade Credit) 96.76 87.90
International Monetary Fund 5.98 6.15
Rupee Debt 1.25 1.50
(Source: Reserve Bank of India, Press Release, September 30, 2014)
According to RBI’s Annual Report 2013-14, the country’s foreign exchange reserve recorded US$ 316.14 billion vis-à-vis ext
In a society where a large chunk of people are financially excluded, financial literacy would play a game changing role in promoting financial inclusion. In March 2010, Hon’ble Finance Minister of India during RBI-OECD Workshop on Financial Literacy mentioned: “ Financial literacy, and education, plays a crucial role financial inclusion, inclusive growth and sustainable prosperity”.
Indian banking scenario is changing rapidly. The first commercial bank viz Bank of Bengal was set up in Kolkata in 1806, mostly catering the financial needs of merchants. The first state sponsored bank was set up in1955 with State Bank of India taking over the erstwhile Imperial Bank of India. To control the commanding heights of economy , 14 major commercial banks were nationalised in June 1969. Subsequently , in 1980 six more banks were nationalised. With implementation of financial sector reforms, Reserve Bank of India, central bank and the banking regulator launched scheme for licensing new private sector banks, in 1992 and gave license to nine banks. Two more banks were given license in private sector in 2001. In 2010-11 Union Budget, Finance Minister , Government of India, announced to license to new generation private banks to prop up financial inclusion leading to inclusive growth. In the Union Budget 2014-15, the Hon'ble Finance Minister has announced differentiated bank license for setting up Payment Banks and Small Banks. On July 17, 2014, Reserve Bank of India released Draft Guidelines for Licensing of Payments Banks and Small Banks. With setting up of state-of -technology banks, banks in niche areas, the banking scenario in India is heading for a massive transformation.
Small depositors in all countries are exposed to higher risk. As the banks are well regulated, the risk to depositors is mitigated to a limited extent through deposit insurance. In India, 87 commercial banks, 82 Regional rural Banks, 4 Local Area Banks and 2026 Co-operative banks are covered by deposit insurance scheme of the Deposit Insurance and Credit Guarantee Corporation of India (DICGCI). Each depositor in a bank is insured up to a maximum of rupees one lakh for both principal and interest. In the aftermath of Global Financial Crisis, depositor protection has become far more central for achieving the goal of financial stability
This is a latest development in Indian banking landscape after the Government of India announced the intention to license new commercial banks in private sector. Reserve bank of India, the banking regulator has set the process. This is a milestone development in Indian banking landscape. Final guidelines would be issued by Reserve Bank after necessary dialogue with government.
More from Consultant in Banking and Finance. Freelance Writer (10)
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
Honest Reviews of Tim Han LMA Course Program.pptxtimhan337
Personal development courses are widely available today, with each one promising life-changing outcomes. Tim Han’s Life Mastery Achievers (LMA) Course has drawn a lot of interest. In addition to offering my frank assessment of Success Insider’s LMA Course, this piece examines the course’s effects via a variety of Tim Han LMA course reviews and Success Insider comments.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
Embracing GenAI - A Strategic ImperativePeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
2. MSME-Economic Significance
2
Micro, Small and Medium Enterprises (MSMEs) play a
major role in economic development, particularly in
emerging countries.
MSMEs :
Contributes to the economic growth,
Enormous potential for growth
Potential for employment and income generation
for vast masses of the country.
Government pronouncements about “Make in India”
are fundamentally based on these convictions.
3. MSME-Economic Significance
3
There is heightened attention by the international
community on MSME sector.
This is primarily because of the critical importance of
job creation in the recovery cycle following the recent
financial crisis, and the MSME’s potentials in that
respect.
4. MSME-Economic Significance
4In Indian economy, MSME sector contribute :
45 % of the manufacturing output.
40 % of the exports.
There are 467.56 lakh enterprises in the MSME
sector.
Provide the largest share of the employment after
agriculture. Employment opportunities to 10.62
crore people across the country.
[ Source: Speech by Shri SS Mundra, Deputy Governor RBI at CAB , Pune on
August 7, 2015].
5. MSME-Economic Significance
5
MSMEs develop a diverse range of products and
services to meet the needs of the local market, global
market, national and international value chains.
A look at the details reveal that only 1.25 crore
people find employment in large industries , whereas
small enterprises employ 11 crore people.
6. MSME Sector- Statutory Foundation
6
Govt of India enacted Micro, Small and Medium
Enterprises Development ( MSMED) Act, 2006 in
June, 2006. ( Notified on October 2, 2006) to address
policy issues in the MSME Sector.
Paradigm Shift
New Definition of MSME
Inclusion of the services sector in the definition of
MSME
Extending the scope to Medium Enterprise.
[RBI vide circular dated April 4, 2007 advised banks to
adopt the new definition for lending purpose.]
7. MSME- Definition
7
Manufacturing Enterprises engaged in the manufacture or
production, processing or preservation of goods :
(i) A micro enterprise is an enterprise where investment in
plant and machinery does not exceed Rs. 25 lakh;
(ii) A small enterprise is an enterprise where the
investment in plant and machinery is more than Rs. 25 lakh
but does not exceed Rs. 5 crore; and
(iii) A medium enterprise is an enterprise where the
investment in plant and machinery is more than Rs.5 crore
but does not exceed Rs.10 crore.
In case of the above enterprises, investment in plant and
machinery is the original cost excluding land and
building.
8. MSME- Definition
8
Service Enterprises engaged in providing or rendering of
services and whose investment in equipment :
(i) A micro enterprise is an enterprise where the
investment in equipment does not exceed Rs. 10 lakh;
(ii) A small enterprise is an enterprise where the
investment in equipment is more than Rs.10 lakh but
does not exceed Rs. 2 crore; and
(iii) A medium enterprise is an enterprise where the
investment in equipment is more than Rs. 2 crore but
does not exceed Rs. 5 crore.
9. Priority Sector Guidelines to MSME Sector
9
Manufacturing Enterprises
MSMEs engaged in the manufacture or
production of goods to any industry specified in
First schedule of Industries (Development and
regulation) Act, 1951 and notified by the Govt .
Service Enterprises
Bank loans up to Rs 5.00 crore per borrower for
MSE and Rs 10.00 crore to Medium Enterprises.
Bank Loans to food and agro processing units will
form part of agriculture.
10. Priority Sector Guidelines
10
Other Finance to MSMEs
Loans to entities involved in assisting the decentralised
sector in the supply of inputs to and marketing of
outputs of artisans , village and cottage industries.
Loans to MFIs for on-lending to MSME sector as per
conditions specified.
Credit outstanding under GCC for non-farm
entrepreneurial credit needs of individuals.
Outstanding deposits with SIDBI on account of priority
sector shortfalls.
11. MSME Sector- Targets for Lending
11
Advances to MSME sector are reckoned in
computing achievements under ovrerall priority
sector target of 40 %.
Domestic commercial banks are required to
achieve a sub-target of 7.5 % of ANBC or Credit
equivalent of OBS exposure, which ever is higher
for lending to Micro-enterprises in a phased
manner 7 % by March 2016 and 7.5 % by March
2017.
Foreign banks with more than 20 branches: this
sub-target would be applicable in March 2018.
12. Prime Minister’s Task Force
Recommendations on MSME
12
Banks have been advised to achieve :
60 % of the total lending to MSE sector to Micro-
enterprises.
20 % y-o-y growth in credit to small enterprises.
10 % annual growth in the number of micro-
enterprise accounts.
13. MSME sector- Key guidelines
13
Issue of Acknowledgement of Loan Application to
MSMEs- Mandatory.
Collateral : No collateral security in cases of loans
up to Rs 10 lakh extended to MSE sector. Banks
may increase it to Rs.25 lakhs, on the basis of good
track record and financial position.
Composite Loans: Limit of Rs 1.00 crore can be
sanctioned by banks so that the unit can avail
working capital and term loan thru SINGLE
WINDOW.
14. MSME sector- Key guidelines
14
Specialised MSME branches
PSBs have been advised to open at least one
specialised branch in each district.
Banks have been permitted to categorise their
branches having 60 % or more of their advances to
MSME sector as specialised MSME branches.
PSB banks will ensure specialised MSME branches
in identified clusters.
15. MSME sector- Key Policies
15
Cluster Based Approach
A Cluster based approach to lending – ( Ganguly
Committee on SSI, 2004) is more beneficial :
a) in dealing with well-defined and recognised groups;
b) availability of more information for risk assessment;
c) monitoring by lending institutions.
SLBC convener banks have been advised to incorporate in
the Annual Credit Plan, the credit requirements in the
clusters identified by Ministry of MSME Enterprises.
Prime Minister’s Task Force recommended : banks should
open more MSE focussed branches; each lead bank may
adopt at least on MSE cluster.
16. MSME sector- Key Policies
16
Empowered Committee on MSMEs
At the Regional Offices of RBI, empowered committee
has been constituted with Regional Director as
Chairman.
Other members : the SLBC Convener, senior officers
from two banks, Director of Industries, of the State
Government, representative from MSME Association.
The Committee reviews the progress in MSME
Financing, rehabilitation of sick SME units and co-
ordinate for smooth flow of credit to the sector.
17. MSME sector- Key Policies
17
Scheme of Small Enterprises Financial Centre (
SEFC)
As announced by Governor in Annual Policy
Statement 2005-06, a scheme for strategic alliance
between banks and SIDBI located in clusters
named “ Small Enterprises Financial Centre” has
been implemented, for co-ordinated approach.
As on date , SIDBI executed MOU with 15 banks.
18. MSME sector- Key Policies
18
Credit Linked Capital Subsidy Scheme ( CLSS)
Government of India Scheme for Technological
upgradation of Micro and Small enterprises.
Scheme:
a) Rate of subsidy @ 15 % for all units of MSE up to
loan of Rs 1.00 crore.
b) Computation of subsidy on the purchase price of
plant and machinery
c) SIDBI and NABARD : implementing agencies.
19. MSME sector- Key Policies
19
Credit Guarantee Scheme for MSEs
Government of India and SIDBI set up the Credit
Guarantee Fund Trust for Micro and Small
Enterprises (CGTMSE) in 2000.
The WG to review the working of the Credit
Guarantee Scheme (CGS) of CGTMSE g
Chairman V.K.Sharma).
The Group recommended for doubling the collateral
free loans to MSEs sector from Rs 5.00m lakh to Rs
10.00 lakh. ( RBI Circular issued in May 2010)
20. Policy Horizon
20
Micro Units Development and Refinance Agency (
MUDRA) Bank : Launched by Prime Minister on April
8, 2015.
Union Finance Minister in his Budget speech 2015-16
announced formation of MUDRA Bank.
There are 5.77 crore small business units, mostly
individual proprietorship, which run small
manufacturing, trading and service business. These
bottom of pyramid find it difficult for access of credit.
MUDRA will ‘fund the unfunded’
MUDRA has been registered as an NBFC , with RBI.
21. Policy Horizon
21
Objectives of MUDRA
To be an integrated financial and service provider for
micro enterprises.
Creating a good architecture of Last Mile Financiers
to micro business
After ‘ banking the unbanked’ with Jan Dhan Yojana
it’s time to ‘ fund the unfunded’.
22. New Policy Initiatives
22
Trade Receivables Discount System ( TReDS) of
MSMEs : RBI guidelines December 3, 2014
Institutional mechanism to facilitate the financing
of trade receivables of MSMEs from Corporate and
other buyers ( including Govt Departments, PSUs),
through multiple financiers.
The transactions processed under TReDS will be
“ without recourse” to the MSMEs.
To be operationalised soon.
23. MSME Sector- Challenges
23
The challenges to MSME sector are classified under
various important verticals to provide theme-based
focus, while devising strategy for the sector.
These are (i) finance and credit
(ii) technology (iii) infrastructure
(iv) marketing and procurement
(v) skill development and training
24. MSME Sector- Challenges
24
Quite often, the sector complains about not having to
only contend with higher cost of borrowing but
also a lack of availability of timely credit.
RBI has advised the banks to assign zero risk weight
for capital adequacy purpose for the portion of the
loan guaranteed by the CGTMSE for such MSE
borrowers.
25. MSME Sector- Challenges
25
There are also issues around the unavailability of
credit rating for first time MSME borrowers.
In this context, the banks have been advised to
formulate Board approved policy and start using
credit scoring models in their evaluation of the loan
proposals of MSE borrowers which works on the
principles of attributes of similar borrowers rather
than on past financials.
26. Small Finance Banks
26
A paradigm shift in financing of MSMEs
will happen as and when small finance
banks are operationalised. ( As on date
11 banks have been given in principle
approval; one started operations since
April 2016.)
These will make the financing of MSMEs
more competitive in the coming days.