MANAGEMENT THESIS -1

FINAL REPORT

“A THESIS ON CREDIT SERVICES OFFERED TO SMALL AND MEDIUM ENTERPRISES BY

ICICI BANK GUNTUR”

BY
M. SRAVANYA
ENROLLEMENT NO: 7NBGU021
 MANAGEMENT THESIS -1
FINAL REPORT

“A THESIS ON CREDIT SERVICES OFFERED TO SMALL AND MEDIUM

ENTERPRISES BY ICICI BANK GUNTUR”

BY
M.SRAVANYA
Enrollment No: 7NBGU021
MBA program (Class of 2007-2009)
Under the esteemed guidance of
Mr. SITA RAMAIAHA, Mr. GURU PRASAD
Center Head, Faculty Member,
ICFAI National College ICFAI National College
Guntur Guntur.
 INTRODUCTION TO SMEs

Small and Medium enterprises play an important role in the development of the country.
However, these industries face difficulty in accessing adequate finance for their businesses.
Apart from the traditional modes of financing like banks and money lenders, newer sources of
financing such as venture capital investment, can take care of their financing requirements. In
the case of India, the government has taken several initiatives both at the national and
international levels to improve the availability of finance. But there are still certain impediments
that the SMEs face that are required to be addressed by the government.
 COMPANY PROFIL

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and
was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through
a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on
the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock
amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in
fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the
Government of India and representatives of Indian industry. The principal objective was to create a
development financial institution for providing medium-term and long-term project financing to
Indian businesses. In the 1990s, ICICI transformed its business from a development financial
institution offering only project finance to a diversified financial services group offering a wide
variety of products and services, both directly and through a number of subsidiaries and affiliates
like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the NYSE.
 NEED FOR THE STUDY

The main objective behind the study ,to find out whether ICICI BANK providing business loans to small
& medium enterprises I had a prejudice that the banks are not providing loans to SME sector based upon
my observations I conduct study from the bankers perceptive. The ICICI bank always focusing on loan
segment for its revenue .my study also focus on the loan propasures followed yet
 OBJECTIVES

• To know the credit service offered by the ICICI Bank

• To know the credit sanctioning procedures followed by ICICI Bank

• To know the criteria of credit services offered to SMEs by ICICI Bank

• To know the how the bank is encouraging SMEs

• To discuss the credit facilitates offered to the SMEs

 LIMITATIONS

• The biggest constraint to this survey is the time element.

• Bank Employees are very busy and unable to share their opinions on credit services of SMEs

•There were lots of difficulties in getting the data from the small and medium scale

• Survey demands more time but the survey is restricted to less time.

• But utmost care was taken to maintain the quality aspect in the data.

• Though there has been chance for basis, the investigator has taken all steps for the reduction of
bias.
 FINDINGS

•It is offering working capital finance and term finance and rural and agriculture finance.

•at present the ICICI bank is not encouraging the SMEs, because they feel their repaying capacity is not upto
the level

•The SMEs are not interested in taking loans from ICICI bank, because of high documentation and higher
rate of interest

•the loan procedure is cumbersome and it may not be able to fulfill all the documents required to submit for
credit sanction

•the bank is not all helping the loans sanctioning to the SMEs

•All the small industrial owners are illiterates and they like only public banks

•The bank provides loans only to the well known customers only.
 SUGGESTIONS

•In the recent years some initiatives have been taken by both governments and banks of
developed and developing countries to make SMEs more acceptable for funding by banks.
These initiatives aim to reduce cost and risk in financing SMEs.

•Credit guarantee and rating institutions have floated to support banks to assume risk
unhesitatingly in financing SMEs

•More appropriate credit instruments have been developed to help SME to have facile credit
with less cost and collaterals in ICICI bank

•Better information systems and training have been developed to make SME viable and
acceptable in ICICI bank

•Despite these recent changes, SMEs need some more brand building to become attractive and
viable in ICICI bank.
 CONCLUSIONS

• The ICICI Bank is providing loans for SMEs

• The system of appraisal is very regarding in sanctioning the loans

• The SMEs are enable to submit proper documentation for approval of the loan

• The Bank field officers occasionally provide guidance to business man

• The industrial owner feel the interest rate at ICICI when compare to other Banks
M. SRAVANYA