Msme Financing

ITS ABOUT THE VARIOUS STEPS THAT ARE ADOPTED BY BANKS FOR FINANCING THE MSMES IN INDIA

This project starts with an introduction to MSME which explains the various limits of financing micro, small and medium industry and it is divided into manufacturing and service sector. Various Orissa government policies are described with their objectives and strategies and details about the four new policies introduced. Various MSME schemes introduced by the government are described along with there objectives, strategies and scopes. For studying the scope of MSME the opportunities in the MSME sector is studied and the employment generated by these MSME sectors previously is also studied. Then the process of financing the msme by banks is analyzed by studying the profile of the companies and analyzing the various factors such as how to finance and how much to be financed by the bank and to explain this process in detail a case analysis is performed and then decision is taken whether to finance the company or not and how much will be the interest rate. Rating is done and the interest rate is fixed. Various aspects of the company such as marketing prospects financial ratios, technical aspects, environmental aspects are studied and analyzed, credit rating is done based on all these parameters. The cluster based approach of the bank is studies and various three clusters are analyised in three different areas. The risk management system of the bank is studied which is followed by the bank while financing any of the msme industry. The process of E-banking which now a days plays a major role to help the banks in financing the MSME is studied. Then the problems faced by banks in financing MSME is studied and at last with conclusion some suggestions are made