The document is a presentation submitted in partial fulfillment of an MBA degree. It discusses the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme in India. Some key points: - CGTMSE provides credit guarantees for loans up to Rs. 100 lakhs to micro and small enterprises. It aims to facilitate institutional credit and promote financial inclusion. - The objectives of the research presented are to assess awareness of the CGTMSE scheme in Gujarat and ways to increase coverage. - Primary data was collected through interviews and questionnaires with bank managers and customers. Secondary data came from annual reports, publications, and websites. - Preliminary findings show need for

1. A
Presentation
ON
CGTMSE SCHEME, COVERAGE IN ELIGIBLE
ACCOUNTS IN GUJARAT.
UNDERTAKEN AT STATE BANK OF INDIA
SUBMITTED TO
Gujarat Technological University
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE
MASTER DEGREE OF BUSINESS ASMINISTRATION
SUBMITTED BY
SANKET R PARIKH– 127780592045
SOM LALIT Institute of Business Management
Affiliated to Gujarat Technological University
AHMEDABAD

2. Definition of MSE as defined in MSMED Act 2006

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. 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. 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 www.cgtmse.in or www.cgtsi.org.in 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Data Analysis

Cross tabulation study between gender and their preferences about taking their
CGTMSE loan in bank
Preferences
Gender
Private
Male
Female
Total
Gov.bank 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
gov.bank
male
female

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. 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. 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. 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. 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. 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. 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. 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 gov.bank 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. 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. 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. 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. Bibliography








Guarantee Trust Fund for Small and Medium Enterprises
http://www.cgtmse.in
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
www.smeworld.org › SME Finance
www.dcmsme.gov.in/schemes/sccrguarn.htm
KEN BLACK book fifth addition of Business Statistics 2010.

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. 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. 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. 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. 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