Problem faced by micro and small enterprises, suggestions to solve those problems so that micro and small enterprises can easily access to finance.

1. Presented By-
Yasha Singh
4113007007
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2. Type- Public
Industry-Banking, Financial services
Founded-20 July 1908
Founder - Maharaja Sayajirao Gaekwad
Headquarter - Vadodara (Baroda), India
Area served-Worldwide
Key people- S S Mundra (Chairman & MD)
Products- Credit cards, consumer banking, corporate
banking, finance and insurance, investment banking, mortgage
loans, private banking, private equity, wealth management
Revenue-346 billion (US$5.7 billion) (2012)
Net income 52.48 billion (US$860 million) (2012)
Total assets 4.574 trillion (US$75 billion) (2012)
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3. Topic – Suggestions to stimulate financing under micro and
small enterprises.
In the growing global competition, the productivity of any
business concern depends upon finance. This topic deals with
the financing problem faced by micro and small enterprises
and suggestions to stimulate financing in micro and small
enterprises.
Project report contains 5 different chapters-
 The report begins with the first chapter which consists
introduction to the problem, background of micro and small
enterprises, objective of the project etc.
 The second chapter is the introduction to the literature review
which gives a brief idea regarding theoretical rationale for loan
guarantee programs in micro and small enterprises. 3

4.  The third chapter is about research methodology adopted in
preparing this report. It covers the sample procedure, types of
data used and the data collection method.
 The fourth chapter comprehensive coverage of forecasting
concepts and techniques which shows the analysis of data
through tabulation, computation and graphical representation of
data collected from survey.
 The fifth chapter deals with the findings, suggestion and
conclusion.
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5. Objective of this project is to analyze the problems of
the MSME sector and to discuss the strategies for
removal of the obstacles.
To study the financing policy and the financing appraisal
system as a whole.
To understand the financing system as being used in Bank of
Baroda (BoB), Alpha-1, Greater Noida.
To study procedure adopted in evaluating financing proposal
by using case analysis in BoB.
To understand the commercial, financial and technical
viability of the proposal proposed and it’s finding pattern. 5

6. There are mainly two sources of data.
 PRIMARY DATA:
▪ Data provided by bank.
 SECONDARY DATA:
▪ Bank reports
▪ Banks loan circulars on micro and small enterprises
▪ Bank and ministry of MSE website
▪ Books and Journals
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7. There is a total finance requirement of INR 32.5 trillion ($650
billion) in the MSME sector, which comprises of INR 26 trillion
($ 520 Billion) of debt demand and INR 6.5 trillion ($130
Billion) of equity demand.
Despite the increase in financing to MSMEs in recent years,
there is still a considerable institutional finance gap of INR 20.9
trillion ($418 billion). After exclusions in the debt demand (62
percent of the overall demand) and the equity demand (from
MSMEs that are structured as proprietorship or partnership),
there is still a demand-supply gap of INR 3.57 trillion ($ 71.4
billion).
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8. 8
Source: MSME Census, RBI, SIDBI, Primary Research
Source: MSME Census, RBI, SIDBI, Primary Research

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10. 10
(in INR trillion)
* Figure in brackets is in USD Billion
** includes equity demand by micro enterprises
Source: MSME census, SIDBI, Primary Research , IFC- Intellecap Analysis

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(in INR trillion)

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13. 13
(in INR Trillion)

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(in INR Trillion)

15. Some of the common financial problems faced by MSMEs
are:
 Inability to obtain external financing;
 Inability to obtain internal financing;
 Insufficient capital, start-up costs; Expensive raw materials;
 High wholesale price;
 Large losses due to scrap rate, sabotage, breakage and crime;
 Decline in sales volume;
 Bad debts and write offs;
 Heavy equipment and maintenance costs;
 Government tax, VAT and customs duty;
 Payroll, rent and utilities;
 Transportation and petrol costs;
 High interest rates on loans;
 Ability to meet financial obligation;
 Insurance costs and delay in account receivables payment.
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16. Minimum government regulation and tax.
Better access to finance.
Private equity funding.
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