Comparison of SME financing services provided by SBI and ICICI

2009

A Report on
Comparative Study of SME Financing Services Provided By
Nationalised and Private Sector Bank.

Submitted By

Shekhani Mohamed Vasim W.

Opulence Business Solutions Pvt. Ltd. 08BS0001577
43, World Business House,
Above IndusInd Bank, Nr. Parimal Garden, Date of Submission: 16/05/2009
C. G. Road, Ahmedabad – 380 009
E-Mail: opportunities.opulence@gmail.com
Website: www.opulencebiz.com

1|Page Shekhani Vasim 08BS0001577

A REPORT
ON
COMPARATIVE STUDY OF SME FINANCING
SERVICES PROVIDED BY NATIONALISED AND
PRIVATE SECTOR BANK.
By
Shekhani Mohamed Vasim Md. Wahid

Opulence Business Solutions Pvt. Ltd.
43, World Business House,
Above IndusInd Bank, Nr. Parimal Garden,
C. G. Road, Ahmedabad – 380 009
E-Mail: info@opulencebiz.com
Website: www.opulencebiz.com

Submitted to:
Dr. Himani Joshi
IBS, Ahmedabad

Date of Submission: 16/05/2009


Preface
As a part of my course curriculum of MBA in summer Internship program, we are
assigned some practical studies as well as the theoretical knowledge in the related
areas for completing the project. I am preparing comprehensive report on
COMPARATIVE STUDY OF SME FINANCING SERVICES PROVIDED
BY NATIONALISED AND PRIVATE SECTOR BANK.

The basic idea of assignment of this project is to augment the knowledge of
students about the SME finance and its various sources. It is concerned with
finding the appropriate source of finance that can be used as per the requirement of
the SME belonging to a particular sector. This will not only help students, but to a
large extent it will help the company it taking the decision to as to which source of
finance should be used for a particular SME. This makes the students enhance their
analytical capability.

So far as decision of the industry or this sector is concerned, I have chosen the
financial consulting firm. This project will also give me firm understanding about
the various aspect of SME finance and the various means of raising the finance. I
have gained lots of knowledge from this project. And I believe that this will help
me in the near future.


Acknowledgement
I would like to express our immense gratitude to mentor guide Mr. BHAVESH
PATEL (CMD, Opulence Business Solution Pvt. Ltd), Mr. EDWARD MACWAN
(Vice President, Opulence Business Solution Pvt. Ltd) and Mr. SANKET JOSHI
(Associate Vice President, Opulence Business Solution Pvt. Ltd) for imparting
valuable support, encouragement, guidance and immense knowledge throughout
the project.

I am also very thankful to all the staff members of Opulence Business Solution Pvt.
Ltd Ahmedabad, Mr. Pratik Pandya, Ms. Harni, and Mr. Vikash Mehta who guided
me and provided their support whenever needed.

I am thankful to my faculty members Dr. HIMANI JOSHI for guiding my way
throughout this project and clarifying all my confusions. Apart from that he helped
me in finding my path and how to go about the project and provided me right input
whenever needed.

Last not the least I would like to thank my parents without whose kind, support and
love I could not have undergone the project smoothly. I am thankful to my friends
and our seniors without whose cooperation and guidance would not have been
completely successfully.

I think all those who knowingly and unknowingly who have helped me in the
fulfillment of this project.


Company Profile
A brief Introduction

We and our business partner are pleased to present our credentials as a full service
Merchant Bank, Investment Bank, Brokerage House & Financial Services
Company with presence in Mumbai as well. Our Partner (RBI registered) and its
subsidiary (SEBI registered) are together a full service Investment Bank, Merchant
Bank and “Institutional” Stock Broking company with membership in NSE & BSE
and Depository services, providing a wide range of Financial Services to over 500
large and mid-cap companies and thousands of retail clients all over India since
1994.

Our Board consists of eminent legal and finance professionals who have gained
their experience by working with leading Banks and Financial Advisory
Institutions of India and abroad expertise in Financial Services, Capital Market,
and Investment Banking.

The range of SERVICES provided by us includes:

Corporate Finance
 Secured/Unsecured Term Loans
 Working Capital Finance
 Secured/Unsecured Term Loans
 Working Capital Finance
 ECB/FCNR(B) Facilities
 Placement of Debentures & Bonds
 Project Funding – Equity & Loans
 Financial structuring
 Trade Finance

Investment Banking
 Corporate Advisory Services
 Mergers and Acquisitions
 Private Equity Placement
 Joint Venture Partner Search
 Equity share and business valuations


Merchant Banking
 Initial Public Offers and Follow on shares
 Right Issues
 Buybacks
 Open Offers
 Preferential allotments
 ESOP certification
 BSE listing of companies listed on Regional Stock Exchanges
 Delisting of Securities

Corporate Restructuring

To unlock value in the businesses
To comply with Regulatory requirements
To hive off noncore businesses
To streamline operations of the Group in similar activities
Family Settlement / Re-arrangement

Due Diligence
Finance & Accounting
Direct Taxes
Indirect Taxes
Legal Service

Valuation
Business/Division Valuation
Brand Valuation
Valuation of Equity Shares
Employee Share based compensation Valuation
Impairment of Assets (Technical Valuation)
Valuation of Financial Instruments
Purchase Price Allocation
Fairness Opinion
Other Intangibles – License / Copyrights / trademarks / technology


Contents
Preface .......................................................................................................................................................... 3

Acknowledgement ........................................................................................................................................ 4

Company Profile ........................................................................................................................................... 5

1. Introduction ........................................................................................................................................... 9

1.1. Purpose & Scope ........................................................................................................................... 9

1.2. Methodology & Sources ............................................................................................................... 9

1.3. Limitation.................................................................................................................................... 10

2. A Brief profile of SMEs in India ........................................................................................................ 11

2.1 Importance of SMEs ......................................................................................................................... 11

2.2 Definition of SME............................................................................................................................. 12

2.3 What Constitutes the SME Sector ..................................................................................................... 12

2.4 SMEs in India ................................................................................................................................... 14

2.4.1 Micro, Small and Medium Enterprise Sector: Profile ................................................................ 14

2.5 Challenges Faced by the SME Sector ............................................................................................... 16

2.6 Various ways of Financing SMEs..................................................................................................... 17

3. SME Services Provided by State Bank of India.................................................................................. 23

3.1 Steps for SME loans by State Bank of India (SBI) ........................................................................... 24

3.2 Credit Appraisal By banks ................................................................................................................ 26

3.3 SME Financing Schemes by SBI ...................................................................................................... 27

3.3.1 Open term Loan ......................................................................................................................... 27

3.3.2 School Plus................................................................................................................................. 28

3.3.3 Paryatan Plus .............................................................................................................................. 29

3.3.4 Transport Plus ............................................................................................................................ 31

3.3.5 Doctor Plus................................................................................................................................. 32

3.3.6 SBI Shoppe ................................................................................................................................ 34


3.3.7 Dental Doctor Plus ..................................................................................................................... 35

3.3.8 Cyber Plus .................................................................................................................................. 37

3.3.9 Rice Mill Plus ............................................................................................................................ 38

3.3.10 Rice Mill Plus .......................................................................................................................... 40

4. SME Services Provided by ICICI Bank .............................................................................................. 41

4.1 Steps for SME loans by ICICI bank.................................................................................................. 42

4.2 SME Financing schemes by ICICI bank for various sectors ............................................................ 44

4.2.1. Automotive Sector .................................................................................................................... 44

4.2.2. Construction Sector ................................................................................................................... 45

4.2.3. Pharmaceutical Sector ............................................................................................................... 46

4.2.4. Apparel Sector .......................................................................................................................... 47

4.2.5. Transport Sector ........................................................................................................................ 48

4.2.6. Gems & Jewelry Sector............................................................................................................. 49

4.2.7. Travel and Tourism Sector ........................................................................................................ 50

4.2.8. Education Sector ....................................................................................................................... 52

4.2.9. Medical Sector .......................................................................................................................... 53

4.2.10. Climate Change Initiative ....................................................................................................... 54

5. Sector wise comparison of SME financing services ........................................................................... 55

Conclusion .................................................................................................................................................. 69

References ................................................................................................................................................... 70


1. Introduction

1.1. Purpose & Scope
The Purpose of carrying out this project is to identify the best source of SME
financing schemes provided by Nationalized and Private Banks in different sectors.
Every Financial consultancy firm like us (Opulence) wants that its client gets the
best deal so this survey will be an important tool for financing needs of every SME
client. More specifically I will concentrate mainly on SME financing schemes
provided by State Bank of India (SBI) and ICICI bank. As we know that SME
form the backbone of any economy and SME are vital for growth of developing
countries like India so financing of SME is considered to be very important issue
for any economy. Because of this reason most of the banks, may it be nationalized
banks likes SBI or Private sector banks like ICICI, all are bringing different
schemes for SME finance, but out of these various schemes which scheme is more
profitable and suitable for a SME is the main question of concern for every SME.

1.2. Methodology & Sources
Following are the series of steps which will be followed during execution of the
project.

 In the early phase of the project I will try to know about the various schemes of
SME financing which are introduced by various banks.

 After having the knowledge about various schemes prevailing in the market by
various banks, I will focus more on schemes provided by SBI and ICICI for
SMEs.

 I will then collect details about these schemes provided by each bank one by
one by visiting the corresponding banks and having interaction with the
representative of that bank. I will collect details like amount of loan available,
Interest rate, Disbursement period, Repayment period, Eligibility criteria,
Security required etc.

 Now after collecting information regarding different schemes of SME finance
by various banks, I will focus on sectors one by one. Like I will take one sector
for e.g. medical , then I will compare schemes for SME provided by various
banks and conclude that if a SME belonging to a medical sector wants finance

then financing scheme of which bank is better for it. Similarly I will cover
different sectors like Tourism, Transport, Medical, Agriculture etc. The
comparison will be on the basis of the following factors:
 Rate of Interest
 Disbursement Period
 Repayment Period
 Eligibility criteria
 Security/collateral etc.

 Basically my aim will be to compare SME financing schemes provided by SBI
and ICICI more specifically, but for some sector it happens that in a particular
sector SBI provides financing but ICICI has introduced any scheme in such
case I will try to compare it with some other bank’s SME service.
 For collection of data I will go to the banks and ask them mu queries to their
representative out there. I will explore the website of the banks to collect the
data.

1.3. Limitation
Some of the limitations of the project can be:

 Generally the data on the websites of the banks are not fully disclosed i.e. other
than the charges mentioned on the website there are many hidden charges
which increases the cost like service charge etc.

 In case of interaction with the representative of a particular bank it happens
many a time that the representative cannot disclose all the data because of
certain reasons like banks privacy policy etc. thus getting clear picture about the
service provided is not possible.

I will try to overcome the above mentioned limitations as far as possible.

10 | P a g e Shekhani Vasim 08BS0001577

2. A Brief profile of SMEs in India

2.1 Importance of SMEs

Small and medium-sized enterprises (SMEs) are the backbone of all economies
and are a key source of economic growth, dynamism and flexibility in advanced
industrialized countries, as well as in emerging and developing economies. SMEs
constitute the dominant form of business organization, accounting for over 95%
and up to 99% of enterprises depending on the country. They are responsible for
between 60-70% net job creations in Developing countries. Small businesses are
particularly important for bringing innovative products or techniques to the market.
Microsoft may be a software giant today, but it started off in typical SME fashion,
as a dream developed by a young student with the help of family and friends. Only
when Bill Gates and his colleagues had a saleable product were they able to take it
to the marketplace and look for investment from more traditional sources
SMEs are vital for economic growth and development in both industrialized and
developing countries, by playing a key role in creating new jobs. Financing is
necessary to help them set up and expand their operations, develop new products,
and invest in new staff or production facilities. Many small businesses start out as
an idea from one or two people, who invest their own money and probably turn to
family and friends for financial help in return for a share in the business. But if
they are successful, there comes a time for all developing SMEs when they need
new investment to expand or innovate further. That is where they often run into
problems, because they find it much harder than larger businesses to obtain
financing from banks, capital markets or other suppliers of credit.


2.2 Definition of SME

Units in Small and Medium Enterprises (SME) Sector will include all units in
tiny and Small Scale industrial (SSI) sector and also those industrial units whose
investment in plant and machinery is up to INR 100 million. Accordingly, only
those units in the SME sector as per definition of RBI (defined in RPCD Circular
No. RPCD.PLFNS.BC. 31/ 06.02.31/ 2005-06 dated August 19, 2005)

2.3 What Constitutes the SME Sector

It is rather difficult to define precisely as to what constitutes the SME sector, as
a. It covers a wide spectrum of activities ranging from manufacturing to trade
to services.
b. It involves different types of organizations with varying constitutions like
proprietary concerns, partnership firms, private limited companies, public limited
companies.
c. Regulations/ Govt. Policy guidelines varies from activity to activity.
d. It overlaps with the presently defined Priority Sector.


In the given scenario, it can be broadly said that the SME segment would
include the following

Traders (Wholesale & Retail) Manufacturers Services
Small Owners
Examples
Mom & Pop Stores
Small Producers
Cash 'n' Carry
Retail Merchants Wholesale Manufacturers Service Providers
Traders

Examples Examples Examples Examples

Convenience Export- Light Industries Agencies
Stores Importers Processing Consulting
Wholesalers Companies Services
Personal
Services
Restaurants
Travel &
Tourism


2.4 SMEs in India

2.4.1 Micro, Small and Medium Enterprise Sector: Profile
SMEs by Geographical Regions (in %)
SMEs by Geographical Regions

East
11%
South West
43% 23%

North
23%


SMEs by size

Medium
5%
Micro
43%

Small
52%

Of the 1150 micro, small and medium enterprises evaluated by SMERA 43% are located in
South India and 52% are Micro in size
Source: SMERA Newsletter

Performance of Micro and Small Enterprises

Year No. of Units Production Employmen Export
(in Lakhs) (Rs Crs.) t s
Regd Unreg Total At At (in Lakhs) (Rs.
Current Constant Crs.)
Prices Prices
2004-05 17.53 101.06 118.59 418263 251511 282.57 124417
2005-06 18.71 104.71 123.42 476201 277668 294.91 N.A.
2006-07 497840
2007-08 587200
Source: Development Commissioner (SSI)

Annual flow of Credit 2006-07
Indicators MSEs( former SSIs) MSME sector
Public Sector Banks $5.4 Billion $9.5 Billion
Other banks (private
/foreign banks, SIDBI etc.) $2.4 Billion $3.5 Billion
Emerging Sources (PV, - $3.0 Billion*
VC, ECBs, etc.)
Total $7.8 Billion $ 12 Billion
*Estimates based on certain broad assumptions, Exchange rate 40 INR = 1$


2.5 Challenges Faced by the SME Sector
Mentoring & Advocacy

Credit/Financing

Technology

 Information about Technology
 Actual procurement of technology
 Finance for Technology up gradation
Market Access

Infrastructure

Procedures

Exit Mechanism

Strategy Interventions for Revitalization and Growth

Reasons attributed to sickness of SMEs

80
70
60
50
40
30
20
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Source: Sickness and Rehabilitation of MSMEs in India, Milagrow Business and
knowledge Solutions


2.6 Various ways of Financing SMEs

Government

Specialized
Investment
Banks for SMEs &
Assistance
Loans and Equity

Leasing Companies

Loans SMEs
Private Financial Lease

Institutions
e.g.
Banks
Finance Companies
Equity

Venture Capitalists


This graph shows the various ways of financing for SMEs in various stages of their
life cycle. The valley of death spreads its shadows to other stages of the life cycle
also. Growing companies, especially ones that invest in capital need not only term
loans but also more working capital.

Most common sources for Finance for MSMEs


Thus it is clear that the most common source of finance for SMEs is Bank
Financing. There are a no. of banks who help in assisting the SMEs for financing.
The main channel used by the SMEs via Banks is Specialized loans by various
Banks.

The Main reason for chosing bank loans by SMEs compared to other sources
of financing like venture capital, PE funding etc is ther is only interest to be paid
no stake is to be diluted thus the whole command oof the SME is with the owner
only.

There are a number of Private as well as Public sector banks who assist SME in
Financing

Some Banks Offering Financial Assistance to SMEs
Allahabad Bank www.allahabadbank.com
Andhra Bank www.andhrabank-india.com
Bank of India www.bankofindia.com
Bank of Baroda www.bankofbaroda.com
Bank of Maharashtra www.maharashtrabank.com
Canara Bank www.canbankindia.com
Central Bank of India www.centralbankofindia.co.in
Corporation Bank www.corpbank.com
Dena bank www.denabank.com
ICICI Bank www.icicibank.com
Indian Bank www.indian-bank.com
Indian Overseas Bank www.iob.com
IndusInd Bank Ltd. www.indusind.com
The Jammu & Kashmir Bank Ltd. www.jkbank.net
Punjab National Bank www.pnbindia.com
Syndicate Bank www.syndicatebank.com
State Bank of Travancore www.statebankoftravancore.com
State Bank of India Group www.sbi.co.in
Small Industry Development Bank of www.sidbi.com
India (SIDBI)
Union Bank of India www.unionbankofindia.co.in
United Bank of India www.unitedbankofindia.com
UCO Bank www.ucobank.com
Vijaya Bank www.vijayabank.com


Investment in SMEs

Total SME Units Fixed Investment
Sr. No. Year
(Lakhs) (Rs. Crores)
1 1990-91 67.87 93555
2 1991-92 70.63 100351
3 1992-93 73.51 109623
4 1993-94 76.49 115795
5 1994-95 79.60 123790
6 1995-96 82.84 125750
7 1996-97 86.21 130560
8 1997-98 89.71 133242
9 1998-99 93.36 135482
10 1999-00 97.15 139982
11 2000-01 101.1 146845
12 2001-02 105.21 154349
13 2002-03 109.49 162317
14 2003-04 113.95 170219
15 2004-05 118.59 178699
16 2005-06 123.42 188113


Credit to MSE sector from Public Sector Banks

The table below gives the status of credit flow to the micro and small enterprises
(MSE) sector from the public sector banks since 2000:

Year Net Bank Credit (NBC) Credit to SMEs % of NBC
2000 316427 46045 14.6
2001 341291 48400 14.2
2002 396954 49743 12.5
2003 477899 52988 11.1
2004 558849 58278 10.4
2005 718722 67634 9.4
2006 1017614 82492 8.1
2007 1317705 104703 8.0
Source: RBI Provisional

Amount Invested in SMEs by ministry of Small scale industry via
Credit Linked Capital Subsidy Scheme (CLCSS)

Year No. of Amount
Units sanctioned
Assisted (Rs. Lakhs)
2001-02 9 21.36
2002-03 47 93.97
2003-04 150 368.79
2004-05 526 1351.89
2005-06 699 1801.17
2006-07 1189 3795.47
Total 2620 7432.65
Source: Development Commissioner, Ministry of SMEs


Amount Invested in SMEs by ministry of Small scale industry via ISO
9000 Incentive Scheme
Year No. of Amount sanctioned
Units (Rs. Crores)
Assisted
1993-94 3 0.016
1994-95 10 0.043
1995-96 48 0.25
1996-97 54 0.39
1997-98 85 0.49
1998-99 174 0.96
1999-00 361 2.25
2000-01 649 4.05
2001-02 992 6
2002-03 1182 6.99
2003-04 917 4.77
2004-05 3314 17.33
2005-06 4101 19.44
2006-07 1543 7.37
Total 13433 70.88
Average assistance/unit= Rs. 52,765
Source: Development Commissioner, Ministry of SMEs


3. SME Services Provided by State Bank of India
State Bank of India (SBI) is the forerunner in the field of SME financing.
Majority of the loans to SMEs are been provided by SBI. SBI has introduced
various schemes for SMEs. The various schemes are according to the sector in
which a particular SME belongs. SBI has introduced SME financing for SME
belonging to sectors like:
Agriculture
Medical
Transport
Tourism
Art
Education
and many more.

SME Business Unit is implementing multiple strategies to maintain Banks
premier position in SME financing.

 The Advances given By SBI to SME sector increased to Rs. 76,329 Crores as
on 31.03.2008 from Rs. 58,674 Crores of the previous year registering a
growth of 30%.
 The Deposits of SBI under SME sector increased to Rs. 1,65,168 Crores as at
the end of March 2008 from Rs. 1,23,054 Crores of previous year, recording a
growth of 34% during the year.
 The SME architecture has been firmly established and with a focus on
companies with a turnover of less than Rs. 50 Crores, SBI’s advances to SME
rose by 26% in FY08.
 Currently, SBI has 12-lakh SME customers.

Credit Given by SBI to SMEs

Q4FY08 Q4FY07 Q3FY08 % OF % OF % OF
TOTAL Y-O-Y Q-O-Q
GROWTH GROWTH
RS IN 782 621 691 19 26 13.1
BN


3.1 Steps for SME loans by State Bank of India (SBI)

1. Application for loan by SME to local branch of a particular area.

2. Inspection/Survey of SME by the Executives of that Local branch.

3. Sending the Documents of survey by Local branch to SMECC branch

4. Preparing credentials of Promoters and firm by SMECC branch and
investigating the same

5. Estimating the amount of loan to be sanctioned and forwarding the
documents for sanctioning.

6. If the loan is been sanctioned by the central authority then
disbursement of the loan amount into account of the SME.


The above figure shows the steps for availing finance through State Bank of
India (SBI) using loans. Here is the brief description of the above shown
procedure:

First of all the SME who wants to avail loan has to visit the local branch office
of their area, where by the loan application is been filled by the SME.

After that the executives of that branch check whether all the necessary
documents are provided by the SME or not, then if all necessary documents are
submitted the next step comes whereby the officials of that local branch go to
the premises of that SME and just have a brief survey of promoter as well as the
premises.

After they are satisfied they send the file of necessary documents to the
SMECC branch, which is a special branch for SME loans. Where by the credit
appraisal takes place, which consist of credit appraisal of promoter, financial
appraisal, determining cost of project, understanding various means of finance
used, profitability estimate, cash flow projections , marketing appraisal etc. ,
which is explained in next section. This step brings out the clear picture
whether the loan should be given to the SME or not?

If the SMECC branch is satisfied with the details then it forward the request of
granting loan to the sanctioning authority.

And finally after the verification by sanctioning authority, the disbursement of
loan amount takes place in the account of that SME

This whole procedure right from application to disbursement of loan amount
takes approximately 20-25 days as the procedure involves analysis of
documents by various branches and thus the movement of documents amongst
them, if all this procedure would have taken place at single place then it would
take only 10-12 days for disbursement.


3.2 Credit Appraisal By banks

1. Credit Worthiness of Borrower/ KYC form

2. Technical Appraisal

3. Financial Appraisal

4. Determination of Cost of Project

5. Determining means of finance

6. Profitability Estimate

7. Break Even Analysis

8. Analyzing Cash flows projections

9. Analyzing Balance Sheet

10. Economic Appraisal

11. Marketing Appraisal


3.3 SME Financing Schemes by SBI

3.3.1 Open term Loan
Purpose:

 Expansion and Modernization
 Upgradation of Technology/machinery, acquisition of hardware,
software etc.
 Acquisition of ISO and other certificates.
 Visits abroad for business development etc.

Loan Amount:

 Maximum for service sector: Rs. 100 Lacs.
 Maximum for manufacturing sector: Rs. 250 Lacs.

Amount of loan available:

 90% of cost

Repayment Period:

 Maximum 3 years, extendable upto 5 years.

Collateral:

 Personal Guarantee of Promoters in all cases
 Pledge of Promoter’s equity in case of corporate.

Eligibility:

 Existing or new corporate/Non-corporate customers of SME segment
with good rating.


3.3.2 School Plus
Purpose:

 Construction of new building/repairing.
 Purchase of equipments, software, and furniture.
 Additional land for expansion or play ground, bus etc.

Loan amount:

 Need Based- No upper limit


 85% of project cost

Repayment:
 Minimum-3 years, Maximum -7 years.

Collateral:
 For loan < Rs. 2 Lacs – Personal Guarantee of promoters/others.
 For loans > 2lacs – Personal Guarantee + Equitable mortgage of
land & building of the school.

Eligibility:
 Government schools/ Private schools/ Colleges having necessary
approval from the government (Excluding professional colleges
& coaching institutes)

Interest Rate:

 Loan < Rs. 2 Lacs – 9.25%
 Loan amount between Rs. 2 Lacs & 5 Lacs.- 10.25%


3.3.3 Paryatan Plus
Purpose:

 Construction, renovation, modernization, addition to hotels, Yatri
niwas, Dharmsala, Restaurants, Travel Agency etc.
 Construction of office premises.
 Purchase of computer & equipments; purchase of luxury buses,
cars, vans, house boats etc.
 Fast food centers, coffee houses, ice cream parlours, amusement
park, ropeway, health club etc. are also eligible.

Loan amount:

 Need Based- No upper limit


 60% for purchase of old vehicles ,not more than 5 years old

Repayment:
 Minimum-3 years , Maximum -7 years
 Maximum moratorium period – 1.5 years

Collateral:
 Tangible security for at least 50% of loan amount.


Eligibility:
 Individual, Partnership firm, Ltd. Company, Trust.

Interest Rate:

 Loan < Rs. 50,000 – 8.5%
 Loan amount between Rs. 50,000 & 2 Lacs.- 9.5%
 Loan above Rs. 25 Lacs – 11.00 to 12.75%


3.3.4 Transport Plus
Purpose:

 Finance for new four wheelers i.e. trucks, tankers, trailers, luxury
buses and cars.

Loan amount:

 Minimum- Rs. 10 Lacs, Maximum- Rs. 10 Crores.



Repayment:
 Maximum – 5 years including Maximum moratorium period of 3
months.

Collateral:
 Tangible security for at least 50% of loan amount.

Eligibility:
 Transport operators owning more than 10 vehicles including the
proposed ones.
 Chief promoter should be IT assessee and having National/State
permits

Interest Rate:

 Loan amount between Rs. 15 Lacs & 7.5 Crores- 11.00%


3.3.5 Doctor Plus
Purpose:

 Equipments, setting up of clinic.
 X-ray lab, nursing homes, and Pathological clinics.
 Computers/ ambulance.
 Expansion or renovation of existing premises.
 Any other activities related to medical profession.

Loan amount:

 Maximum- Rs. 5 Crores of which upper limit for working capital is:
(a) 10% of amount upto Rs. 1 Crore.
(b) 5% of amount above Rs. 1 Crore and minimum Rs. 10 Lacs.


 Upto Rs. 5 Lacs - 90% of loan amount.
 Above Rs. 5 Lacs- 85% of loan amount

Repayment:
 Maximum -7 years
 Maximum moratorium period – 1 year.

Collateral:
 Allopathic/other doctors upto Rs. 15 Lacs/10 Lacs – No security
 Loans over Rs. 15 Lacs/ 10 Lacs. For Allopathic/other doctors –
25% of loan amount plus personal guarantee.


Eligibility:
 Assessment based on simplified scoring model. Min. score-60%
Interest Rate:

 Loan < Rs. 50,000 – 8.5%


3.3.6 SBI Shoppe
Purpose:

 Purchase of new/old shops/offices.
 Modernization/renovation Expansion/addition/alteration of shops.
 Building of Training /Service centers/ garage etc.
 Furniture/ fixtures, electrical fittings.

Loan amount:

 Maximum- Rs. 20 Lacs.


 75% for new shop & 60% for old shop.

Repayment:
 Maximum moratorium period – 6 months

Collateral:
 Hypothecation/Pledge / Mortgage of property.

Eligibility:
 Individual, Partnership firm, Ltd. Company, Trust/Franchisees.


3.3.7 Dental Doctor Plus
Purpose:

 To boost the financing to Dental equipment under tie-up arrangement.
 To finance qualified dentists
 For buying equipment
 Any other activities related to Dental profession

Loan amount:

 Maximum- Rs. 10 Lacs.


 Up to Rs. 25,000 – 100%
 Over Rs. 25,000 and up to Rs. 5 Lacs – 90%
 Over Rs. 5 Lacs and up to Rs. 10 Lacs – 80%

Repayment:
 Minimum-3 years , Maximum -5-10 years
 Maximum moratorium period – 6 months, for construction
purpose it is 12 months

Collateral:
 Hypothecation/Pledge / Mortgage of property.


Eligibility:
 Individual, Partnership firm, Ltd. Company, Trust/Franchisees.
 Promoters should have minimum BDS and should be registered
practitioners.

Interest Rate:

 Loan < Rs. 50,000 – 8.5%


3.3.8 Cyber Plus
Purpose:

 To set up internet/cyber cafes especially at rural and semi-urban
centers with potential for such a facility.

Amount of loan margin:

 Rs. 9000

Repayment:
 36 to 40 monthly installments
 Moratorium period- 3 months

Collateral:
 Security for assets purchased from bank finance.

Eligibility:
 Individual entrepreneurs
 The kiosk operator should be a local person
 Educational qualification - Minimum Plus two
 Age between 20 and 45 years
 Should possess basic computer knowledge.

Interest Rate:

 Loan – 9.5%


3.3.9 Rice Mill Plus
Purpose:

 Acquisition of machinery/factory building for modernization or
expansion.
 Working capital needs.

Loan amount:
 Based on Project cost.


 85-75% of project cost.
 Working capital:
(a) Paddy & rice- 80-75%
(b) Brokens -80%
(c) Gunny bags- 60%
(d) Bran- 70%

Repayment:
 For working capital-12 months can be extended to other 12
months under certain conditions.

Collateral:
 Loans >5 Lacs - Equitable mortgage of property/ tangible security.


Eligibility:
 Profit making existing units and new units of good credit rating.

Interest Rate:

 Loan < Rs. 50,000 – 8.5%
 Loan amount between Rs. 5 Lacs & 25 Lacs.- 11%
 Loan amount above 25 Lacs.- 11 to 12.75%


3.3.10 Rice Mill Plus
Purpose:

 Acquisition of machinery/factory building for modernization or
expansion.
 Working capital needs.

Loan amount:
 Based on Project cost.


 85-75% of project cost.
 Working capital- 85-75%

Repayment:

Collateral:
 Loans < 5 Lacs – No security
 Loans >5 Lacs - Equitable mortgage of property/ tangible security.

Eligibility:
 Profit making existing units and new units of good credit rating.

Interest Rate:

 Loan < Rs. 50,000 – 8.5%
 Loan amount between Rs. 5 Lacs & 25 Lacs.- 11%
 Loan amount above 25 Lacs.- 11 to 12.75%


4. SME Services Provided by ICICI Bank
ICICI is amongst the leading private sectors bank in India. ICICI is the second
largest bank of the country. ICICI bank has introduced various schemes for SMEs.
The various schemes are according to the sector in which a particular SME belongs
as seen in case of SBI. ICICI bank has introduced SME financing for SME
belonging to sectors like:
Automotive
Transport
Tourism
Education
Construction
Apparels
Gems and jewelry
and many more.

Few Facts about ICICI bank:

 The total loans given by the ICICI bank has decreased by 1.4% from 2007 to
2008. The total loans given by the bank was Rs. 2155.17 billion on Dec 31,
2007; it increased to Rs. 2256.16 billion in Mar 2008 and again decreased to
Rs. 2125.21 billion in Dec2008.
 The breakup of the total loan amount given by ICICI bank for the year 2008 is
as follow:
Retail (Personal, home, vehicle etc.) : 54%
Overseas: 26%
Domestic corporate: 12%
Rural: 4%
SME: 4%
 Thus out of the total loans given by the ICICI bank in year 2008 i.e. Rs.2125
billion, the SME loans come out to be 4% of 2125 billion = Rs. 85 billion


4.1 Steps for SME loans by ICICI bank

1. Application for loan by SME to local branch of a particular area.

2. Sending the Documents collected by Local branch to SME branch

3. Preparing credentials of Promoters and firm by SME cell in SME
branch and investigating the same

4. Estimating the amount of loan to be sanctioned and if all credentials
are positive then sanctioning of loan by SME cell.

5. Disbursement of loan in the account of the SME.


The above figure shows the steps for availing finance through ICICI banks
using loans. Here is the brief description of the above shown procedure:

First of all the SME who wants to avail loan has to visit the local branch office
of their area, where by the loan application is been filled by the SME.

The local area branch sends the file of necessary documents to the SME branch,
which is a special branch for SME loans. Where by the credit appraisal takes
place by SME cell which is in SME branch, which consist of credit appraisal of
promoter, financial appraisal, determining cost of project, understanding
various means of finance used, profitability estimate, cash flow projections ,
marketing appraisal etc. This step brings out the clear picture whether the loan
should be given to the SME or not?

If the SME cell is satisfied with the details then it forward the request of
granting loan to the sanctioning authority within the SME branch.

And finally after the verification by sanctioning authority, the disbursement of
loan amount takes place in the account of that SME

This whole procedure right from application to disbursement of loan amount
takes approximately 15-20 days as the procedure involves analysis of
documents by only 2 branches i.e. the local area branch and the SME branch
and thus the disbursement period is less as compared to SBI as there is to and
fro movement of documents between several branches in SBI..


4.2 SME Financing schemes by ICICI bank for various sectors

4.2.1. Automotive Sector
Purpose:
 To set up an automobile manufacturing unit, expansion, Upgradation
of technology.
Loan amount:

 Minimum- Rs. 10 Lacs.
 No upper limit


 75-90%

Repayment:
 On demand but maximum 5 years but in some cases can be
extended to 7years.

Collateral:
 Immovable property, Assets financed or Tangible security of
about 30-40% of loan amount.

Eligibility:
 Networth should be minimum Rs. 40 Lacs

Interest Rate:

 Loan : 16%

Service Charges:
 0.50-2.50%


4.2.2. Construction Sector
Purpose:
 To set up a construction company, purchase of equipments,
Upgradation of technology.
Loan amount:
 No upper limit

 75-90%

Repayment:
extended to 7years.

Collateral:
Eligibility:

Interest Rate:
 Loan : 16%
Service Charges:
 0.50-2.50%


4.2.3. Pharmaceutical Sector
Purpose:
 To set up a Pharmaceutical unit, Upgradation, innovation.
Loan amount:
 No upper limit

 75-90%

Repayment:
extended to 7years.

Collateral:
Eligibility:

Interest Rate:
 Loan : 16%
Service Charges:
 0.50-2.50%


4.2.4. Apparel Sector
Purpose:
 To set up an apparel manufacturing unit, retail stores, expansion,
Upgradation.
Loan amount:
 No upper limit

 75-90%

Repayment:
extended to 7years.

Collateral:
Eligibility:
 Networth should be minimum Rs. 40 Lacs.

Interest Rate:
 Loan : 16%
Service Charges:
 0.50-2.50%


4.2.5. Transport Sector
Purpose:
 Finance for new four wheelers i.e. trucks, tankers, trailers, luxury
buses and cars.

Loan amount:
 No upper limit

 75-90%

Repayment:
extended to 7years.

Collateral:
Eligibility:
 SMEs should have National/state permits.

Interest Rate:
 Loan : 16%
Service Charges:
 0.50-2.50%


4.2.6. Gems & Jewelry Sector
Purpose:
 To set up a gems and jewelry unit, expansion of the old unit,
Upgradation.
Loan amount:
 No upper limit

 75-90%

Repayment:
extended to 7years.

Collateral:
Eligibility:

Interest Rate:
 Loan : 16%
Service Charges:
 0.50-2.50%


4.2.7. Travel and Tourism Sector
Purpose:
 Construction, renovation, modernization, addition to hotels, Yatri
niwas, Dharmsala, Restaurants, Travel Agency etc.
 Construction of office premises.
 Purchase of computer & equipments; purchase of luxury buses,
cars, vans, house boats etc.
 Fast food centers, coffee houses, ice cream parlours, amusement
park, ropeway, health club etc. are also eligible.

Loan amount:
 No upper limit

 75-90%

Repayment:
extended to 7years.

Collateral:
Eligibility:


Interest Rate:
 Loan : 16%
Service Charges:
 0.50-2.50%


4.2.8. Education Sector
Purpose:
 Construction of new building/repairing.
 Purchase of equipments, software, and furniture.
 Additional land for expansion or play ground, bus etc.

Loan amount:
 No upper limit

 75-90%

Repayment:
extended to 7years.

Collateral:
Eligibility:
 Government schools/ Private schools/ Colleges having necessary
approval from the government (Excluding professional colleges
& coaching institutes)

Interest Rate:
 Loan : 16%
Service Charges:
 0.50-2.50%

4.2.9. Medical Sector
Purpose:
 Equipments, setting up of clinic, Labs etc.
 Computers/ ambulance.
 Expansion or renovation of existing premises.
 Any other activities related to medical profession.

Loan amount:
 No upper limit

 75-90%

Repayment:
extended to 7years.

Collateral:
Eligibility:
 Promoter must be a Qualified Doctor.

Interest Rate:
 Loan : 16%
Service Charges:
 0.50-2.50%


4.2.10. Climate Change Initiative
Purpose:
 To help climate change initiative programs, which help to preserve
environment like developing non-renewable energy dependent
projects etc.
Loan amount:
 No upper limit

 75-90%

Repayment:
extended to 7years.

Collateral:
Eligibility:

Interest Rate:
 Loan : 16%
Service Charges:
 0.50-2.50%


5. Sector wise comparison of SME financing services
Medical Sector
Bank SBI ICICI bank

Interest rate  < Rs. 50,000 – 8.5%  Loan : 16%
 Rs. 50,000 - 2 Lacs.- 9.0%
 Rs. 2 Lacs - 5 Lacs.- 9.25%
 Rs. 5 Lacs - 25 Lacs.- 10.25%
Service charge  Nil  0.50 – 2.50% of loan
amount
Loan amount  Maximum – Rs. 5 Crores  Minimum Rs. 10 Lacs
For working Capital:  No upper limit
 10% of amount upto Rs. 1 Crore.
 5% of amount above Rs. 1 Crore
and minimum Rs. 10 Lacs.

Margin/  < Rs. 5 Lacs - 90%  75-90%
Amount of  > Rs. 5 Lacs- 85%
loan
sanctioned
Repayment  Maximum – 7 years  On demand
Period  Maximum 5 years but
in cases upto 7 years
Security/  Allopathic/other doctors upto Rs.  Immovable property
collateral 15 Lacs/10 Lacs – No security  Assets Financed
 Tangible security of 30-
 Loans over Rs. 15 Lacs/ 10 Lacs.
40% of loan amount
For Allopathic/other doctors –
25% of loan amount plus
personal guarantee.
Eligibility  Based on simplified scoring  Networth should be
model. minimum Rs. 40 Lacs
 Qualified Doctor.


Interpretation: Following inference can be made from table above:

 In case of SBI the interest rate is different for different loan amount but for all
slabs the interest rate is less compared to the interest rate of ICICI bank.
 In case SBI there is no service charge to be paid while in case of ICICI bank
there is about 0.5-2.50% service charge so in this case SBI is better than ICICI
bank.
 In case of SBI there is no minimum limit for loan amount while for ICICI bank
it is Rs. 10 lacs. While there is maximum limit for SBI is Rs. 5crores and Rs. 1
crore for working capital while for ICICI there is no upper limit. So we can say
in case of minimum loan amount SBI is better and I case of upper limit of loan
amount ICICI is better.
 In case of SBI the amount of loan available is 90% for loan amount below Rs. 5
lacs and above Rs. 5 lacs it is 85% while in case of ICICI bank it varies
between 75-90% so for loan below Rs. 5 lacs SBI is a better option while for
loan amount above Rs. 5 lacs if amount of loan sanctioned is above 85% then
ICICI bank will be right choice otherwise SBI will be a better option.
 The repayment period of SBI is maximum 7 years while for ICICI bank it is
maximum 5 years but only for certain cases it can be extended to 7 years in
ICICI bank. So looking at this figures it is clear that in this case SBI is better
option than ICICI bank
 In case of SBI the security for Allopathic doctors for loan above Rs. 15 lacs is
25% and below that it is Nil while in case of other doctors for loan amount
above Rs. 10 lacs the security is 25% and below that it is Nil but in ICICI bank
the security is 30-40% for all loan amount and for everyone thus it is clear that
SBI is better compared to ICICI bank in case of security.
 For eligibility criteria, In SBI there is credit scoring model and based on the
score obtain in that loan is given to only those SMEs who score above 60% i.e.
if they fail to qualify for one criteria of a model but qualify for rest other criteria
then they are eligible but in case of ICICI the SME should have a Networth of
minimum Rs. 40 lacs otherwise they fail to qualify for loan. Thus SBI seems to
be a better option here.

Looking at the above interpretations it is clear that for SME belonging to
Medical sector SME loan from SBI will be better option as compared to ICICI
bank.

Education Sector
Bank SBI ICICI bank

Interest rate  < 2 Lacs.- 9.25%  Loan : 16%
 Rs. 2 Lacs - 5 Lacs.- 10.25%
 Rs. 5 Lacs - 25 Lacs.- 11%
amount
Loan amount  Need based  Minimum Rs. 10 Lacs
 No upper limit  No upper limit
Margin/  85%  75-90%
Amount of
loan
sanctioned
Repayment  Minimum-3 years  On demand
Period  Maximum – 7 years  Maximum 5 years but
Security/  < Rs. 2 Lacs – Personal  Immovable property
collateral Guarantee of promoters/others.  Assets Financed
 > 2lacs – Personal Guarantee +
40% of loan amount
Equitable mortgage of land &
building of the school.
Eligibility  Government schools/ Private  Networth should be
schools/ Colleges having minimum Rs. 40 Lacs
necessary approval from the  Institutes having
necessary approval
government (Excluding
from Government.
professional colleges & coaching
institutes)



bank.
it is Rs. 10 lacs. While there is no upper limit in both the cases. So we can say
SBI is better than ICICI bank as there is no minimum loan limit, it is need
based.
 In case of SBI the amount of loan available is 85% while in case of ICICI bank
it varies between 75-90% so if amount of loan sanctioned is above 85% then
ICICI bank will be right choice otherwise SBI will be a better option.
 The repayment period of SBI is minimum 3 years and maximum 7 years while
for ICICI bank it is maximum 5 years but only for certain cases it can be
extended to 7 years in ICICI bank. So looking at these figures it is clear that in
this case SBI is better option than ICICI bank as maximum limit in all cases for
SBI is 7 years.
 In case of SBI the security for loan amount below Rs. 2 lacs is only personal
guarantee of Promoter and for loan amount above Rs. 2 lacs the security is
personal guarantee of Promoter as well as equitable amount of mortgage but in
ICICI bank the security is 30-40% for all loan amount and for everyone thus it
is clear that for loan amount below Rs. 2 Lacs SBI is better compared to ICICI
bank and for loan amount above Rs. 2 lacs ICICI bank is a better option in case
of security.
 For eligibility criteria, In SBI all institutions with necessary government
approval except professional colleges and coaching classes are eligible there is
no criteria of Networth while in case of ICICI the SME should have a Networth
of minimum Rs. 40 lacs otherwise they fail to qualify for loan. Thus SBI seems
to be a better option here.

Education sector SME loan from SBI will be better option as compared to
ICICI bank.


Transport Sector
Bank SBI ICICI bank

Interest rate  Rs. 15 Lacs – 7.5 Crores - 11%  Loan : 16%

amount
Loan amount  Minimum- Rs. 10 Lacs  Minimum Rs. 10 Lacs
 Maximum- Rs. 10 Crores  No upper limit
Margin/  80%  75-90%
Amount of
loan
sanctioned
Repayment  Maximum – 5 years including  On demand
Period Maximum moratorium period of  Maximum 5 years but
3 months.
Security/  Tangible security for at least  Immovable property
collateral 50% of loan amount.  Assets Financed
40% of loan amount
Eligibility  Transport operators owning  Networth should be
more than 10 vehicles including minimum Rs. 40 Lacs
the proposed ones.  SMEs having
National/state permits.
 Chief promoter should be IT
assessee and having
National/State permits



 For SBI the interest rate is 11% while for ICICI bank it is 16% thus it can be
seen in case of interest rate SBI is better than ICICI bank.
 In SBI there is no service charge while in case of ICICI bank about 0.5-2.50%
service charge is taken thus SBI is better than ICICI bank in this case.
 As can be seen the amount of loan available by SBI is 80% of project cost while
for ICICI bank it varies between 75-90% so if amount of loan sanctioned is
above 85% then ICICI bank will be right choice otherwise SBI will be a better
option.
 The repayment period in case of SBI is Maximum 5 year including moratorium
period of 3 months while in case of ICICI bank it is also maximum 5 years but
in certain case it can be extended to 7 years thus in this case ICICI bank is a
better option.
 In case of SBI the security is tangible security for at least 50 % of loan amount
but in ICICI bank the security is tangible security for at least 30-40% of loan
amount or assets financed or immovable property thus it is clear that if the SME
has tangible security for loan than ICICI bank is a better option otherwise SBI
is a better option.
 For eligibility criteria, In SBI only those SMEs are eligible who own more than
10 vehicles (including the proposed ones) and the firm should have
National/State permits while in case of ICICI the SME should have a Networth
of minimum Rs. 40 lacs as well as the firm should have National/State permit
otherwise they fail to qualify for loan. Thus SBI seems to be a better option
here.
Transport sector SME loan from SBI will be better option as compared to ICICI
bank.


Travel &Tourism Sector
Bank SBI ICICI bank

Interest rate  < Rs. 50,000 – 8.5%  Loan : 16%
 Rs. 50,000 - 2 Lacs.- 9.5%
 Rs. 2 Lacs - 5 Lacs.- 10.25%
 Rs. 5 Lacs - 25 Lacs.- 11.00%
 > Rs. 25 Lacs – 11.00 to 12.75%
amount
Loan amount  Need Based  Minimum Rs. 10 Lacs
 No upper limit  No upper limit
Margin/  80% of project cost  75-90%
Amount of  60% for purchase of old vehicles
loan
sanctioned
Repayment  Minimum-3 years  On demand
Period  Maximum -7 years  Maximum 5 years but
 Excluding Maximum
moratorium period – 1.5 years
Security/  Tangible security for at least  Immovable property
collateral 50% of loan amount.  Assets Financed
40% of loan amount
Eligibility  Individual, Partnership firm, Ltd.  Networth should be
Company, Trust. minimum Rs. 40 Lacs.



bank.
it is Rs. 10 lacs. While there is no upper limit in both the cases. So we can say
SBI is better than ICICI bank as there is no minimum loan limit, it is need
based.
 In case of SBI the amount of loan available is 80% of project cost and 60% for
purchase of old vehicles while in case of ICICI bank it varies between 75-90%
so in this case ICICI bank is better option than SBI.
 The repayment period of SBI is minimum 3 years and maximum 7 years
(excluding moratorium period of maximum 1.5 years) while for ICICI bank it is
maximum 5 years but only for certain cases it can be extended to 7 years in
ICICI bank. So looking at these figures it is clear that in this case SBI is better
option than ICICI bank as maximum limit in all cases for SBI is 7 years.
 In case of SBI the security is tangible security for at least 50 % of loan amount
but in ICICI bank the security is tangible security for at least 30-40% of loan
amount or assets financed or immovable property thus it is clear that if the SME
has tangible security for loan than ICICI bank is a better option otherwise SBI
is a better option.
 In SBI there are no specific eligibility criteria for a SME and also there are no
criteria of Networth while in case of ICICI the SME should have a Networth of

Travel & Tourism sector SME loan from SBI will be better option as compared
to ICICI bank.


Apparel Sector
Bank SBI (Open Term Loan ) ICICI bank

Interest rate  12.25%  16%

amount
Loan amount  Service sector: Max. Rs. 1Crores  Minimum Rs. 10 Lacs
 Manufacturing sector: Max Rs. 2.5  No upper limit
Crores.
Margin/  90%  75-90%
Amount of
loan
sanctioned
Repayment  Maximum 3 years, extendable upto  On demand
Period 5 years.  Maximum 5 years but
Security/  Personal Guarantee of Promoters.  Immovable property
collateral  Assets Financed
40% of loan amount



 For SBI the interest rate is 12.25% while for ICICI bank it is 16% thus it can be
 There is no upper limit for SME loan in case of SBI as in the case of ICICI
bank in which there is minimum limit of Rs. 10 lacs but there is no upper limit
in case of ICICI bank where as for SBI the upper limit for service sector is Rs. 1
Crore and for manufacturing sector it is Rs. 2.5 Crores thus SBI puts a limit on
the SME loan so if an SME wants loan more than Rs. 1 Crore in case of service
industry and Rs. 2.5 Crores in case of manufacturing sector than ICICI is a
better option.
 The amount of loan sanctioned by SBI 90% of project cost while for ICICI
bank it may vary between 75-90% thus in this case SBI seems to be a better
option than ICICI bank.
 The repayment period of SBI is maximum 3 years and in some cases extendable
upto 5 years while for ICICI bank it is maximum 5 years and in certain cases it
can be extended to 7 years in ICICI bank. So looking at these figures it is clear
that in this case ICICI bank is better option than SBI as maximum limit in all
cases for ICICI bank is 5 years.
 In case of SBI no tangible security is required only personal guarantee of
promoters is required while in case of ICICI bank the firm should have a
Networth f minimum Rs. 40 lacs otherwise it will be not eligible. Thus in this
case SBI seems to be a better option than ICICI bank.

Apparel sector SME loan from SBI as well as from ICICI bank seems to be
equal as in some criteria SBI is better while in other criteria ICICI seems to be
better thus both are on equal positions for Apparel sector.


Gems & Jewelry Sector


amount
Crores.
Margin/  90%  75-90%
Amount of
loan
sanctioned
40% of loan amount



better option.

Gems & Jewelry sector SME loan from SBI as well as from ICICI bank seems
to be equal as in some criteria SBI is better while in other criteria ICICI seems
to be better thus both are on equal positions for Gems & Jewelry sector.


Other Sectors


amount
Crores.
Margin/  90%  75-90%
Amount of
loan
sanctioned
40% of loan amount



better option.

sector other than mentioned above, SME loan from SBI as well as from ICICI
bank seems to be equal as in some criteria SBI is better while in other criteria
ICICI seems to be better thus both are on equal positions for other sectors.


Conclusion
From the above comparison between SME plans provided by SBI and ICICI
bank it can be judged that for a SME belonging to a particular sector which bank is
providing a better SME plan. It can be tabulated as follows:

Sector Public Sector Bank Private Sector Bank
(SBI) (ICICI Bank)

Medical

Education

Transport

Travel & Tourism

Apparel

Gems & Jewelry

Other Sectors


References
BUSINESS WORLD, 2009. The SME Whitebook 2009-2010. New Delhi:
ABP Pvt. Ltd.

http://www.statebankofindia.com/

http://www.icicibank.com/

http://www. smallindustryindia.com/

http://www.laghu-udyog.com/

http://www. rbi.org.in/

http://www. smeiift.com/

http://www.lubindia.org/


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