phool chand.pptx
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Presented by:Phool ChandMBA 3rd SEM
Various issues related tofinance in SMEs
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Finance:
Finance is the art and science of managing money.
-M Y Khan
Financial management:
Financial management is concerned with theduties of the financial managers in the business firm.
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Importance of Finance in M!s:
Finance is the life bloodof any business.
Finance is one of the basic re"uirements of apro#ect.
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M!$ as an important segment of the Indian!conomy:
%& of '()
*+ & of the industrial units
small-scale industries , I produce about %products
/ & of output in manufacturing sector
/ & of total e0port
!mployment of about 1 million people
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2ategori3ation of enterprises on the basis of financial In4estment:
Micro $ small and medium enterprises de4elopment 5ct.6 7:
8.Manufacturing enterprises:
Micro enterprises:In4estment96+ la h
mall enterprises:
6+ la h9In4estment; + crore Medium enterprises:
+ crore9In4estment;8 crore
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Micro $ small and medium enterprises de4elopment 5ct. 6 7:
6. er4ice enterprises:. Micro enterprises:
In4estment98
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2ategori3ation of M!s on the basis of financialstrength = performance capability:
Financial trength
>igh Moderate ighest !85 !8? !82
>igh !65 !6? !62
Moderate !15 !1? !12
@ea !/5 !/? !/2
)oor !+5 !+? !+2
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Financial re"uirement of small enterprises:finance
Fixed investment
Land Building Machinery
Work in process
Sundry debtors Expenses stocks Finished goods
Working capital
Land Building Machinery
Work in process
Sundry debtors Expenses stocks Finished goods
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ource of finance in M!s:
?usiness growth
ource of finance
Aenturecapital
?usinessangels
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?usiness growth:
Internal
!0ternal
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Internal source of finance:
Beser4e surplus
Crganic growth: growth generated through thede4elopment and e0pansion of the business itself.
'enerating increasing sales
Dse of retained profit
ale of assets
)ro4isions ,ta0ation = depreciation
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!0ternal source of finance:
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2ont
2. Loans:
. (ebentures
. ?an loans
.
Merchant or in4estment ban s
. go4ernment
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hort term:
?an loans
C4erdraft facilities
Grade credit
Factoring
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Inorganic growth:
5c"uisitions
Merger
Ga eo4er
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?usiness angels:
Indi4idual loo ing for in4estment opportunities
'enerally small sums
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Aenture capital:
)ooling capital in the form of limited companies.
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Financial assistance to medium-scale enterprises:
1 !"# $nterest rate for units located at back%ardarea on loan &s! " Lacs
1'!"# $nterest rate for units located at non
back%ard area&epayment period max! 1( years!
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2onclusion:
Finance$ which has been aptly described as the life blood of industry is a pre-re"uisite for themobilisation of real resources to organise productionand mar eting. (epending upon the nature of theacti4ity to be financed$ business re"uires short- term $medium term and long term finance.
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Beference:
Ghe (ynamics of !ntrepreneurial (e4elopment andManagement
- Aasant (esai
!ntrepreneurship and mall ?usiness Management
- M ? hu la
Financial management
- M Y Khan
www.google.com
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