Credit Appraisal Process Of SME.

CHAPTER-I

1.1 EXECUTIVE SUMMARY:

The main objective of this project is to acquire the knowledge of banking
and take practical exposure and expertise of credit appraisal system on SME. The
credit appraisal system is a holistic process which starts from the borrower walks into
the branch office and culminates in credit delivery, ensuring the objective, lending
quality and managing credit risk. The process of credit appraisal is a multifunctional
and includes management, technical, commercial and financial appraisal.

Initially we have introduced as a whole in India. Earlier banking industry was

highly protected by sovereign but in 1991 it has opened the door in the form of
liberalization for the growth and progressive future for this sector. Banking as a sector
provides life blood in the form of finance for the industrial growth as our objective is
to gain practical exposure it was necessary to be precise and focused to a particular
bank so as to understand their technique of credit risk management. We have taken up
Union Bank Of India as a part of banking network in India. For the better
understanding of credit risk management we have also studied the loan proposal
provided by UNI

The periodic review of advance accounts is one of the major aspect of the
credit appraisal monitoring. To deploy the resources of the bank the vital decision
should necessarily be based upon the barrower evaluation and assessment of the needs
.Any Account, proper periodical review is inevitable. My topic is “Credit Appraisal
process of UNI” Which means the process to identify the customer towards bank with
the primary data. After Analyzing the proposal and credit appraisal system, we have
rationalized our observation and tried to provide practical and feasible suggestions
that may help them to improve upon their present practice.

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1.2 GENERAL INTRODUCTION:

A story and quick Indian economy supported by dynamic financial banking

segment. Indian economy is experiencing a large change due to general liberalization
apportions brought on since July 1991.

Commencing from the days of imperial bank, Indian banking industries have
been seeing changes in developments, with the policies of the government. Banking is
said to be one of the barometer of the country’s economy. Accordingly, the banking
industry shows the health of the country.

Finance is regarded as the life-blood of a business enterprise, because the

modern world is money oriented economy. Finance is one of the basic functions of all
kinds of economic activities. It refers to funds of monetary resources needed by
individuals, business house and government.

1.3 NEED OF THE STUDY

In the Globalized scenario each and every thing is economic in nature. So
each and every person needs money in greater extent. So they take help of the banks
to raise money, but banks need to appraise and check the credit worthiness of a loan
applicant particularly for small and medium enterprise people

The main purpose of the study is to know the “Credit sanctioning procedures
of SME advances and to assess the type of SME customers in UNION BANK OF
INDIA in Ranebennur city. The study attempts to know the user’s opinion of
utilization of different SME services provided by the bank. It helps to understand the
respondent’s knowledge and opinion about UNION BANK OF INDIA and the
services provided by that bank. As we know that, the use of SME services day by day,
it is essential to know about the perceptions of customers about its various aspects and
their problems while sanctioning Credit, and find out the weak area which needs
improvements.

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1.4 STATEMENT OF THE PROBLEM:

The main function of development financial institutions is granting long term

loan to the industries and SME Sector. The success of development financial
institutions depends upon timely payment of interest and principal amount by the
borrower. In this connection it is very much essential to evaluate credit worthiness of
borrower before sanctioning loan. Credit appraisal gives an idea to the financial
institution about borrower’s ability to pay interest and principal. This, in turn, affects
crucial aspect of the financial institutions in their performance and financial position.
In this background this study is undertaken to known the credit appraisal mechanism,
methods and procedure on SME followed by union bank of India and their effectives.

1.5 OBJECTIVES OF THE STUDY:

The following are the main objectives of this study

 To study credit sanctioning procedures of SME advances and to assess the

type of SME customers in union bank of India

 To study the satisfaction level of SME customers towards credit facility of

union bank of India.

 To identify the service quality towards credit facility to SMEs provided by

union bank of India.
 To know on what criteria the bank appraises the loan to the business.
 To know the different methods available for credit Rating an understanding
the credit rating procedure used in Banking industry.

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1.6 SCOPE OF THE STUDY:

The scope of the study is limited to union bank of India. The study covers
information given by the regional office and from union bank of India and its
customers. This study will help us to know the workings and concept of credit
appraisal. This research helps to find how the banks analyses the credit worthiness of
the SME projects

1.7 RESEARCH METHEDOLOGY:

Research design is absolutely and basically the structure or arrangement of a

study that helps the data collection and analysis. Before conducting a study, this
research design is to be done. Success of any research depending on in its design.

SOURCE OF DATA:

 DATA COLLECTION: The objectives of the project are such that both primary
and secondary is required to achieve them. So both primary and secondary data
was used for the project.

 PRIMARY DATA:

The primary source of the data face to face discussion/interaction with

executives, officers and other staff members of the bank. It is a set of first-hand
information gathered originally for the research work.

 Interaction with the managers

 Interaction with UBI customers

 Questionnaire

 Observation/survey

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 SECONDARY DATA:

The facts and information, annual reports, manual papers reported by office
are the source of secondary data. The secondary information for analysis provided by
profit and loss account and balance sheet. Such data already available which are
prepared in some other context and not specifically for the project taken up.

 Banking Manuals

 Annual reports

 www.unionbankofindia.co.in

 www.capitaline.com

 Other websites

 SAMPLE SIZE: 50 Respondents are selected.

1.8 LIMITATIONS OF THE STUDY:

It is said, “Nothing is perfect” and if the quite is true, I am sure that there
would be few shortcomings in this project also. Sincere efforts have been made to
eliminate discrepancies as far as possible but few would have reminded due to
limitations of the study. These are:
 The research was carried out in a short period.

 As some of the information is not revealed, whatever suggestions generated,

are based on certain assumptions.

 Limited sample size

 The study is restricted to one branch

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CHAPTER-II

THEREOTICAL ASPECTS OF CREDIT APPRAISAL PROCESS

IN SME:

2.1 INTRODUCTION OF SMALL SCALE INDUSTRIES:

As my project is conducted in Union Bank of India Branch of Ranebennur,

and it mainly lends long term loans and working capital loans to SME’s so it is
better to know the brief history and working of SME’s in India.

Small scale enterprise management has assumed greater importance in the post
liberalization economy. The development of small scale enterprises is generally
believed to contribute substantially to employment creation and generation of income,
particularly for low income population groups. In Indian context, management of over
35 lakh small enterprise units is of great significance and importance in the wake of
emerging global competitive economy.

The small scale sector is the major contributor to the industrial economy of the
country. It accounts for 95% of countries factory ownership, contributes nearly 45%
of total Industrial production and export from this sector account for 45% of Indian
exports. Apart from the direct exports, products of large number of SSE’s enterprises
are exported indirectly through merchant exporters, export houses and other channels.

Financing is the most important activity for running smoothly a small scale
enterprise. Finance is the one of the most and basic requirements of a project. The
entrepreneur needs capital to start with and needs financial assistance at every stage of
the project. Project finance is needed both for short term and long term. Credit is
available on the basis of credit worthiness of the entrepreneur. In regard to capital
structure and working capital management. There are many differences between large,
medium and small-scale industries.

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Financial Sources To SME’s

Internal Source:

A. Reserve Surplus

 Capital reserve

 Development rebate reserves

 Others
B. Provisions

 Taxation

 Depreciation

External Source:

A. Borrowings

 From Banks

 From lending institutions like IDBI, IFCI, ICICI.

 From Government and semi Government agencies

 Others

B. Trade dues and other current liabilities

 Sundry Creditors

 Others
Financial institutions and banks make a critical appraisal of projects which are
submitted to them by entrepreneurs for getting loans. Financial institutions and Banks
have traditionally been accepting the data provided by the entrepreneur as valid while,
assessing the project appraisals. In fact, the emphasis has largely been on the cash
flow and financial viability of project in assessing their suitability for extending
support.

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Ratings are given by the financial institutions so that it will help in taking
decisions relating to lending whether to accept the proposal or not. For rating purpose
usually these institutions uses guidelines of RBI and CRISIL

CRISIL: [Credit Rating Information Services of India Limited]

An important institutional support to the development of capital market on

sound lines has been the establishment of the First Indian credit rating agency; it has
been promoted by ICICI and UTI with the purpose of evaluating the debt obligations
of all type companies.

CRISIL has announced it ratings under 3 categories.viz, high investment

grade, investment grade and speculative grade, they have ‘AAA’ and ‘AA’ which are
judged to have highest and high safety of timely payment of interest and principal
respectively. The two ratings differ only marginally. Investment grade securities
include’ A’ adequate safety and ‘BBB’ low safety. Changes in circumstances can
adversely affect such issues more than in the higher rated categories. Speculative
grades include ‘BB’ inadequate safety, ‘B’ high, ‘C’ substantial risk and ‘D’ in
default.

CRISIL SME rating scale

CRISIL SME
Rating Definition

SME 1 Highest
SME 2 High
SME 3 Above Average
SME 4 Average
SME 5 Below Average
SME 6 Inadequate
SME 7 Poor
SME 8 Default

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SME in Karnataka

Banlalore Urban
Banlalore Urban 2%
2% 2% 1% Rural
2% 1% Rural 2%
2% 2% 18% Belgaum
2% 18% Belgaum
2% Bellary
2% Bellary
Bidar
Bidar 2%
2% Bijapur
Bijapur 2%
2% Chickmagalur
Chickmagalur
Chitradurga
Chitradurga
Dakshina Kannada
Dakshina Kannada 6%
6% 5% Dharwad
5% Dharwad
Gulbarga Gulbarga
Hassan Hassan
Kodagu 4% Kodagu
4%
Kolar Kolar
Mandya 9% Mandya
2% 9% 2%
Mysore Mysore
Raichur Raichur
Shimoga Shimoga
6% 6%
Tumkur Tumkur
4% Uttar Kannada 4% Uttar Kannada
Bagalkot Bagalkot
2% 2%
2% Chamarajnagar 2% Chamarajnagar
4% 2% Davangere 2% Davangere
4%
1% 2% Gadag 2% Gadag
1%
3% 2% Haveri 3% 2% Haveri
4% 5% Kopal 4% 5% Kopal
4% 4%
Udupi Udupi

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2.2 CONCEPT:

The small-scale industries (SSI) produce 40% (8000 products) of the industrial
output and offer the largest employment after agriculture. The sector, this way
exhibits an opportunity to the nation to harness local competitive advantages for
achieving worldwide predominance

2.3 DEFINATION OF SME’s:

“ At present, a small scale industrial unit is an undertaking in which

investment in plant and machinery, does not exceed Rs. 1 crore, expert in respect of
certain specified items under hosiery, hand tools, drugs and pharmaceuticals,
stationery items and sports goods, where this investment limit has been enhanced to
Rs.5 crore. Unit with investment in plant and machinery in excess of SSI limit and up
to Rs.25 crore may be treated as medium enterprise (ME).”

On October 2nd 2006, Indian govt. has enacted the “MSMED Act 2006”.

2.4 CHALLENGES FACED BY SME:

 Particularly the small enterprises (tiny segment) have in adequate access to

finance due to lack of financial related data and non-formal business rehearses.

 It`s also lack access to private quality and investments and have extremely
restricted to secondary market instruments access.

 It face fragmented market in appreciation of their inputs and in addition

products and are under vulnerable to against business variances.

 SMEs need easy access to between state and global business sector.

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 The entrance of SMEs to innovation and item advancements is also minimal.

There is less knowledge of worldwide best practices.

“Before the SME sector, the financial segments and banking system has
placed are fully dressed up cake in a silver platter. It is not a birthday cake but a cake
in valuation for the endeavours furthermore as a motivating force to buckle down. The
part ought to benefit of the open doors and scale new statures. With this the division
will be profited and the general public as well.”

2.5 INTRODUCTION TO CREDIT APPRAISAL IN SME:

Credit appraisal implies an examination/appraisal done by the bank former

before giving any advances and venture money furthermore checks the business,
financial and technical viability of the project proposed its funding pattern and the
essential and insurance security spread accessible for such funds recovery.

 BRIEF VIEW OF CREDIT:

Credit Appraisal is a process to ascertain the risks associated with the

augmentation of the credit facility. It is generally large conveyed by the financial
organization, which are involved in aspects fiancé (funding to its customer). Credit
risk is identified with non-reimbursement of the credit got by the customer of a bank.
In this manner it is important to evaluate the believability of the client keeping in
mind the end goal to relieve the credit risk. Assessment of the client is performed
which measures condition of the finance and the client to reimburse backs the credit
in future.

This is the process of assessing the credit value of an advance candidate.

Which depending on components like age, income, number of dependents, nature and
continuity of employment, reimbursement limit, past advances, etc. are considered
while assessing the credit value of a person. Each bank or loaning foundation has its
own board of authorities for this reason.

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The 4’C’of credit are important are pertain to all barrowers which must be
kept in mind, at all times, “character”, “capacity”, “collateral” and “condition”. If
missing any one of the equation then the loaning officer must question the practicality
of credit.

There is no guarantee to ensure a loan does not run into problems however in
the event that fitting credit assessment systems and observing are executed then
actually the advance misfortune likelihood/issues will be minimized, which ought to
be the goal of each loaning officer Credit is the procurement of resources(such as
giving an advance) by one gathering to another gathering where that auxiliary
gathering does not repay the 1st party promptly, thereby creating obligation, and
rather orchestrates either to reimburse or return those assets at a later date. The 1st
party is called lender/creditor, while the 2nd party is called a barrower/debtor.

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CREDIT APPRAISAL PROCESS IN SME:

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Appraisal of SME proposals has four distinct stages:

 Conducting Due Diligence about the promoters & the proposed activity.
 Conducting Techno-economic Feasibility Study.
 Undertaking Financial appraisal & assessing Credit Requirements.
 Credit Risk Rating, Compliance of Takeover Codes & Decision Making.

Loan proposals falling within the delegation of the Branch are sanctioned and
disposed off at Branch level.

The bank has set up SARAL CENTRES at its various Regional Offices, where
all activities are attended under Single Window Concept in liaison with the concerned
branch with a view to quicken the decision making process, For proposals above
Branch Heads delegation, processing is done at Sarals, wherever they are operational.

Where Sarals are not operational, the proposals are sent by branches through
Credit Department of respective Regional Offices to Sanctioning Authority under
copies to Controlling Offices.

Working Capital requirement of Micro & Small Enterprises borrower up to Rs

5.00 crores is assessed based on Turnover Method, in which 25% of the Projected
Achievable Sales Turnover is computed as Working Capital Requirement, of which
20% is provided by the bank & balance 5% is to be brought by way of promoter's
contribution towards margin money. .

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Working Capital requirement of MSE borrower above Rs 5.00 crores is

assessed based on Flexible Bank Finance Method, which is an extension of
Permissible Bank Finance Method with customer friendly approach in as much as the
scope of Current Assets is made broad based and for evaluating projected liquidity,
acceptable level of Current Ratio is taken at 1.17:1 against benchmark level of 1.33:1.
The assessment of credit requirement is made based on the projected study of the
borrowers business operations vis-a-vis the production/processing cycle of the
industry. The projected levels of inventory & receivables are examined in relation to
the past trend, market development & industry trend. An uniform Classification for
Current Assets & Current Liabilities is adopted on the terms given in the CMA data
Format.

In case of Specific Industries/Seasonal Industries such as Software

Development, Construction Industry, Film Industry, Sugar, Fertilizers etc. assessment
of Working Capital including Short Term Loans can be made based on Cash Budget
Method. In such cases apart from projected profitability, liquidity, gearing & fund
flows; projected cash flows are accounted for to compute Working Capital Finance.

Term Loans are appraised based on viability of projects after judging Debt
Repayment Capacity, Break Even Capacity, Internal Rate Of Return, Debt Equity
Ratio, Fixed Assets Coverage Ratio etc.

ELIGIBILITY
With the enactment of MSMED Act 2006 and with the issuance of the
Government Of India, Ministry Of Commerce & Industry, Department Of Industry
Policy & Promotion Notification No. S.O. 563(E) dated 27.02.2009, the paradigm
shift that has taken place in the supportive measure extended by GOI to Small Scale
or an Ancillary Industrial Undertaking is the inclusion of the services sector in the
definition of Micro Small & Medium Enterprises, apart from extending the scope to
medium enterprises.

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The MSMED Act 2006 has modified the definition of Micro Small & Medium
enterprises engaged in manufacturing or production and providing or rendering of
services. This definition has been adopted for the purpose of extending Bank Credit
vide RBI circular no. RPCD.PLNFS.BC.No. 63/06.02.31/2006-07 dated 04-04-2007.

As per MSMED Act 2006 the MSME segment has broadly been classified into
Manufacturing Enterprises & Service Enterprises.

A Manufacturing Sector Enterprise is one, which is engaged in the

manufacturing or production, processing or preservation of goods. Investment in plant
& machinery (Original Cost excluding Land & Building and the items specified by
the Ministry Of Small Scale Industries vide its notification No. S.O. 1722(E) dated
5.10.2006) is the criterion for classifying a manufacturing enterprise into Micro,
Small and Medium Manufacturing Sector Enterprise.

A Service Sector Enterprise is one, which is engaged in providing or rendering

of services. Investment in equipments (Original Cost excluding Land & Building and
furniture, fittings and other items not directly related to the service rendered or as may
be notified under the MSMED ACT 2006) is the criterion for classifying a service
enterprise into Micro, Small and Medium Service Sector Enterprise.

The following table reflects the investment ceilings for classifying Micro, Small
and Medium Sector Enterprises

Manufacturing Service Sector(Investment in

Classification
Sector(Investment in P & M) Equipments)
Micro
Up to Rs 25.00 Lacs Upto Rs 10.00 Lacs
Enterprise
More than Rs 25.00 Lacs up to More than Rs 10.00 Lacs up to
Small Enterprise
Rs 5.00 Crores. Rs 2.00 Crores
Medium More than Rs 5.00 Crores upto More than Rs 2.00 Crores up to
Enterprise Rs 10.00 Crores Rs 5.00 Crores

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CHAPTER-III

3.1. INTRODUCTION OF BANKS IN INDIA

In India the banks are being segregated in different groups. Each group has
their own benefits and limitations in operating in India. Each has their own dedicated
target market. Few of them only work in rural sector while others in both rural as well
as urban. Many even are only catering in cities. Some are of Indian origin and some
are foreign players. All these details and many more is discussed over here. The banks
and its relation with the customers, their mode of operation, the names of banks under
different groups and other such useful information’s are talked about.

One more section has been taken note of is the upcoming foreign banks in
India. The RBI has shown certain interest to involve more of foreign banks than the
existing one recently. This step has paved a way for few more foreign banks to start
business in India. The banking section will navigate through all the aspects of the
Banking System in India. It will discuss upon the matters with the birth of the banking
concept in the country to new players adding their names in the industry in coming
few years.

The banker of all banks, Reserve Bank of India (RBI), the Indian Banks
Association (IBA) and top 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has
been well defined under three separate heads with one page dedicated to each bank.
However, in the introduction part of the entire banking cosmos, the past has been well
explained under three different heads namely:

 History of banking in India

 Nationalization of banks in India

 Scheduled Commercial banks in India

The first deals with the history part since the dawn of banking system in India.
Government took major step in the 1969 to put the banking sector into systems and it

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nationalized 14 private banks in the mentioned year. This has been elaborated
in Nationalization Banks in India.

3.2 HISTORY OF UNION BANK OF INDIA:

Union Bank of India (UBI) was registered on 11 November 1919 as a limited

company in Mumbai and was inaugurated by Mahatma Gandhi. At the time of India's
Independence in 1947, UBI only had four branches – three in Mumbai and one in
Saurashtra, all concentrated in key trade centers. After Independence UBI accelerated
its growth and by the time the government nationalized it in 1969, it had grown to 240
branches in 28 states. Shortly after nationalization, UBI merged in Belgaum Bank, a
private sector bank established in 1930 that had itself merged in a bank in 1964, the
Shri Jadeya Shankarling Bank. Then in 1985 UBI merged in Miraj State Bank, which
had been established in 1929. In 1999 the Reserve Bank of India requested that UBI
acquire Sikkim Bank in a rescue after extensive irregularities had been discovered at
the non–scheduled bank. Sikkim Bank had eight branches located in the North–east,
which was attractive to UBI.

UBI began its international expansion in 2007 with the opening of

representative offices in Abu Dhabi, United Arab Emirates, and Shanghai, Peoples
Republic of China. The next year, UBI established a branch in Hong Kong, its first
branch outside India. In 2009, UBI opened a representative office in Sydney,
Australia.

Union Bank has been playing a very proactive role in the economic growth of
India and it extends credit for the requirements of different sectors of economy.
Industries, exports, trading, agriculture, infrastructure and the individual segments are
sectors in which the bank has deployed credit to spur economic growth and to earn
from a well diversified portfolio of assets.

The Bank now operates through over 4200+ branches across the country. The
Bank's core values of prudent management without ignoring opportunities is reflected

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in the fact that the Bank has shown uninterrupted profit during all 96 years of its
operations.

3.3 COMPANY PROFILE:

Type Public company

Traded as BSE: 532477
NSE: UNIONBANK

Industry Banking, Financial services

Founded 11 November 1919; 97 years ago

Headquarters Mumbai

Key people Arun Tiwari

(Chairman & MD)

Revenue  32,198.80 crore (US$5.0 billion) (2016)

Operating income  5,722 crore (US$890 million) (2016)

Net income  1,351.60 crore (US$210 million) (2016)

Total assets 404,695.90 crore (US$63 billion) (2016) 

Owner Government of India

Number of employees 35,514 (2016)

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Website www.unionbankofindia.co.in

3.4 VISION AND MISSION STATEMENT

VISION:

“To become the bank of first choice in our chosen areas by building beneficial
and lasting relationships with customers through a process of continuous
improvement”

MISSION:

 To be a customer centric organization known for its differentiated customer

service.

 To offer a comprehensive range of products to meet all financial needs of

customers.

 To be a top creator of shareholder wealth through focus on profitable growth.

 To be a young organization leveraging on technology and an experienced

workforce.

 To be the most trusted brand, admired by all stakeholders.

 To be a leader in the area of financial inclusion.

BUSINESS
 Personal banking: It provides products and services in area of saving,
deposit, retail loans, cards, insurance, investment and demat facility.
 NRI Banking: Under this it offer a range of services and products in areas
like remittance, saving, deposit, loans and payment to its NRI customers.

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 Corporate Banking: It offers services like CMS, E–Tax, trade finance,

insurance products and loans to its corporate clients.

BOARD OF DIRECTORS:

S.No Name Designation

1 Arun Tiwari Chairman

2 Arun Tiwari Managing Director

3 Dipak D Sanghavi Company Secretary

4 Jag Mohan Sharma Director

5 K Ramesha Non-Official Director (Part time)

6 Sushri Anusuiya Sharma Non-official Director (Part time)

7 Vinod Kathuria Executive Director

8 Raj Kamal Verma Executive Director

9 Ravindrara Harhadarai Dholakai Shareholders Director

10 Gopal Krishan Lath Shareholders Director

11 Dipankar Chatterjee Workmen Director

12 N shanakar Workmen Director

13 Madnesh Kumar Mishra Government Nominee Director

14 Anil Kumar Misra Nominee Director – RBI

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15 Baidya Nath Bhattacharjee Officer Employee Director

3.5 ORGANISATIONAL STUCTURE OF UNION BANK:

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3.6 PRODUCT PROFILE:

UBI offers many products and services which are:

AWARDS OF UNI
2014
 Union Bank to open 100 talking ATMs.
 Board recommended a Dividend of Rs. 8 per equity share.
 Our bank bags IDRBT IT Excellance Awards 2012-13 under following
categories,
- IT Excellance Award for Best IT Team
- Special Award for Technology for FI
- Special Award for Managing IT Risk

2015

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 Union Bank of India has Appointed Ms. Neha Agrawal as a Compliance

Officer.
 Board recommended a Dividend of Rs. 8 per equity share.

2016
 Union Bank of India has Appointed Shri. Mihir Kumar as a Nominee Director.
 Board recommended a Final Dividend of Rs. 1.30 per equity share.
 Union Bank of India bags the Express Uptime Champion Award 2014 for its
Network Operations
 Union bank has won 3 IBA banking technology awards

2017
 Union Bank of India launches Digital initiatives for its customers
 Union Bank Has Won 6 Iba Banking Technology Awards 2015-16
 Union Bank of India signs MOU with Star Union Dai-ichi Life Insurance
Company
 Union Bank of India launches Tabulous Banking

2018
 Union Bank of India has been awarded the Best Bank Award for Use of
Technology for Financial Inclusion among Large Banks by Institute for
Development & Research in Banking Technology (IDRBT).
 Acquisition of 49% shareholding of Union KBC Asset Management
Company Private Ltd and Union KBC Trustee Company Private Ltd by
Union Bank of India.

3.7 TYPES OF SME SCHEMES OFFERED BY UNI

 Union Turnover Plus

 Union Progress
 Union Start-Up

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 Union Nari Shakti

1. UNION TURNOVER PLUS

S.
Parameter Scheme Guidelines
No.
 All Micro and Small Enterprises (MSE) engaged in
manufacturing activity or service activity or trading
activity irrespective of constitution will be eligible under
the scheme.

 The Unit to avail loan under Sole Banking Arrangement

Eligible
1. (excluding retail loans) and entire sales turnover is to be
borrowers
routed through Cash Credit (Working Capital) Account.

 Digital portion to be maintained at minimum 25% of the

projected Sales Turnover routed through Bank Books
during the sanction period. 

To meet need based working capital (Fund Based) requirement of

Purpose of MSEs, which are adopting Digital Channels for business
2.
the advance transactions, on the basis of Projected Sales Turnover acceptable
to the Bank.
Quantum of
3. Maximum upto Rs.5.00crore
finance
 20%
4. Margin

As per extant interest rate guidelines for Micro and Small

Rate of Enterprises. However, concession of 0.50% over applicable rate
5.
Interest of interest subject to minimum appropriate MCLR to MSEs
having digitized sales turnover of above 50%.

6. Security Primary: All assets created out of Bank’s finance shall be

charged in favor of Bank.     

Collateral: Wherever, the account could not be covered under

any Credit Guarantee Scheme, collateral security coverage of
minimum 60% of total credit facility is to be obtained.
7. Repayment On demand. To be renewed every 12 months as per extant

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Credit Appraisal Process Of SME.

guidelines.

2. UNION PROGRESS

S.
Parameter Scheme Guidelines
No.

All business units irrespective of classification under Micro &

1. Eligibility
Small enterprise category.

To meet business related needs including purchase /

construction of business/office premises including Cyber cafe,
2. Purpose
machinery including Generator Set, equipments, vehicles, other
fixed assets  and working capital requirement.

3. Quantum of Maximum limits upto Rs.1.00crore

Finance
 10% for credit limit upto Rs.10.00Lacs.
4. Margin  15% for Credit Limits above Rs.10.00Lacs

As per extant interest rate guidelines for Micro and Small

5. Interest rate
Enterprises.
Processing
6. At concessional rates
charges
Primary: All assets created out of Bank's finance shall be
charged in favor of Bank by way of hypothecation / mortgage
etc.
8. Security
Collateral: No collateral for accounts covered under CGTMSE
(Annual guarantee fee payable to Credit Guarantee Trust will
be fully absorbed by the Bank for micro enterprises).
9. Repayment
Working Capital: 12 months subject to renewal as per extant
guidelines.

Term Loan: To be repaid within maximum period of 84

monthly installments inclusive of moratorium period.
Interest to be paid as and when due.

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3. UNION START-UP

S.
Parameter Scheme Guidelines
No.

The Unit must be eligible and certified as “Start-up” by the

1. Eligibility concerned Government Authority as per Start-up India scheme
launched by Government of India (GoI).

To finance for innovation, development, deployment or

commercialization of new product, processes or services driven
2. Purpose
by technology or intellectual property as per Start-up India
Scheme.

Nature of
3. Term Loan and / or Working capital
Facilities

Quantum of Minimum: Rs.0.10crore

4.
Finance Maximum: Rs.5.00crore

5. Margin 20%  (Working capital as well as Term Loan)

6. Interest rate Concession over applicable rate of interest
Processing
7. Nil
Charges

8. Security Collateral: Not Mandatory

Guarantee:
 Personal guarantee of promoter directors, partners of
the firm/company having sufficient means and of all
mortgagors of collateral security, if any.

Working Capital: 12 months

Term Loan: Maximum Door to Door repayment shall be 10
9. Repayment
years including moratorium period not exceeding 36 months.
Repayment can be in monthly / quarterly installments. Interest
shall be recovered separately.  

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4. UNION NARI SHAKTI

S.
Parameter Scheme Guidelines
No.

Micro & Small Enterprises owned and managed by Women

Entrepreneurs. In case of a partnership concern or company,
1. Eligibility
majority of partners should be women and in case of company,
majority of directors should be women

Nature of
2. Cash Credit / Term Loan
Facilities
Quantum of
3. Minimum Rs.2.00 lacs and Maximum Rs.100.00 lacs
Finance
4. Margin Upto Rs.10.00Lacs – 5% / Above Rs.10Lacs – 15%
5. Interest rate
Processing
6. NIL
Charges

Primary -In case of working capital limit, exclusive charge on

7. Security stock and book debts and in case of term loan, exclusive charge
on assets created out of bank finance.

Collateral

8.  In case of exposure upto Rs.10.00 lacs, no collateral

security is to be obtained.

 Personal guarantee of the proprietor / partners /

directors.
 Personal guarantee of property owner which is offered
Guarantee
and accepted as collateral security.
 Conditions apply: For further details, please visit our
nearest branch

Working Capital - One year / Term Loan - Maximum 84

9. Repayment months including moratorium period of maximum 12
months

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COMPETITORS INFORMATION:
All the banks in India are competitors for the bank. Some the major
competitors for the bank are:

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HIGHLIGHTS
 Total Business of Rs. 6,20,445 crore as on March 31, 2016, an increase of

7.04%.

 Total Deposits of Rs.3,42,720 crore as on March 31, 2016, an increase of

8.16%.‰

 Gross Advances of Rs 2,77,725 crore as on March 31, 2018, an increase of

5.70%.‰

 Share of CASA deposit in total deposits improved to 32.35% as on March 31,

2018 from 29.24% as of March 31, 2017.

 In Advances as of March 31, 2020, RAM sector (Retail, Agriculture &

MSME) increased by 10.97% and contributes more than 52% of domestic loan

book.‰

 Non-Interest Income increased by 3.09% from 3,523 crore to 3,632 crore.‰

 Core Fee Income increased from 1,872 crore to 1,879 crore.

 Proposed dividend at 19.50%‰

 Pan India presence- Network of 4200 (including 4 overseas branches) and

6883 ATMs as on March 31, 2018.

OVERSEAS OFFICES OF THE BANK

Hongkong
Sydney
Abu Dhabi
Beijing
Shanghai
London

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SWOT ANALYSIS

STRENGTH:
 Financial products for agricultural sector

 Products aligned to Government schemes

 Emphasis on Customer Satisfaction

 Union bank of India has over 27,700 employees

 The facility of Online Telebanking is available to all its individuals, corporates

and Core Banking Customers.

 Reputation and image of bank

 Low transaction cost

WEAKNESS:

 Hierarchical management and structure

 Nominal International presence as compared to leading players

 Advertising is lesser which leads to lower brand presence

OPPORTUNITIES

 Huge potential for deposits and lending loans

 Increase in technology based product- e banking, M- banking etc., on account

of positioning in core banking network.

 Increase in volume of business to improve productivity

 Small scale business banking

 More global penetration through International banking

 Acquisition of smaller local banks.

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THREATS:

 Economic crisis

 Highly competitive environment

 Stringent banking norms

FUTURE GROWTH AND PROSPECTS:

 Growth in credit to the SME and agribusiness segments which are driven by a
network of semi-urban and rural branches which are supported by
organizational reinforcement in the form of agriculture clusters and SME cells.

 The new products both in assets and liabilities are given by UBI got very good
response from its customers.

 Planning to expand the business in multiple areas and branches which creates
the opportunities for cross-border trade finance, syndication of debt and NRI
business.

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CHAPTER-IV

4.1 DATA ANALYSIS AND INTERPRETATION:

Survey means going into depth of the responses and gathering inward
expression for the purpose of the knowing dispositions of the respondents about
which survey is conducted.

Small-scale enterprises management has assumed greater importance in the post

liberalisation economy. The development of small-scale enterprise is mainly believed
to contribute to creation of the employment and income generation, mainly for low
income persons. Administration of more than 45 lakhs small enterprise units, in India
context is of greater significance and importance in the rising worldwide focused
economy. So banks play a important role to advance sanction to the client by the
means of credit appraisal.

The major part is, credit in right time by proficient sanctioning. The liquidity
position of the firm is completely effected by the administration of credit. So, an
investigation of changes in the credit appraisal of credit is necessary to examine the
productivity with the capital is utilized in a business.

Data analysis and interpretation is done to know about the clients and their mind
towards the bank and with the help of questionnaire to provide the credit facility to
them. Surveyed by researcher, the clients with the view towards the bank and sample
size is 50.

From the survey the analysis of data is made as follows

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Financial Statements:

PROFIT AND LOSS ACCOUNT

PROFIT AND LOSS ACCOUNT

in Rs. Crores….
  Mar '18 Mar '17 Mar '16 Mar '15 Mar '14
Income
Interest Earned 32,198.80 32,083.96 29,349.39 25,124.70 21,028.45
Other Income 3,631.74 3,523.00 2,821.54 2,552.03 2,448.20
Total Income 35,830.54 35,606.96 32,170.93 27,676.73 23,476.65
Expenditure          
Interest expended 23,885.70 23,640.07 21,470.07 17,581.86 14,235.39
Employee Cost 3,699.29 3,785.52 3,307.77 2,755.01 2,479.26
Selling, Admin & Misc
6,649.83 6,178.93 5,503.12 5,031.01 4,828.42
Expenses
Depreciation 244.11 220.81 193.78 150.92 146.45
Operating Expenses 6,302.21 6,143.43 5,482.77 4,512.17 3,987.51
Provisions &
4,291.02 4,041.83 3,521.90 3,424.77 3,466.62
Contingencies
Total Expenses 34,478.93 33,825.33 30,474.74 25,518.80 21,689.52

Net Profit for the Year 1,351.60 1,781.64 1,696.20 2,157.93 1,787.14
Profit brought forward 0.42 0.41 0.41 0.61 0.16
Total 1,352.02 1,782.05 1,696.61 2,158.54 1,787.30
Preference Dividend 0 5.28 9.99 9.44 10.55
Equity Dividend 134.05 381.47 252.12 477.44 440.44
Corporate Dividend Tax 27.45 77.42 44.55 82.74 73.16
Per share data
         
(annualised)
Earning Per Share (Rs) 19.66 27.94 26.75 36 32.27
Equity Dividend (%) 19.5 60 40 80 80
Book Value (Rs) 295.44 288.4 268.2 262.9 235.91
Appropriations          
Transfer to Statutory
1,190.52 1,317.47 1,389.54 1,588.52 1,262.54
Reserves
Transfer to Other
-0.01 -0.01 0 -0.01 -0.01
Reserves
Proposed
Dividend/Transfer to 161.5 464.17 306.66 569.62 524.15
Govt
Balance c/f to Balance
0 0.42 0.41 0.41 0.61
Sheet
Total 1,352.01 1,782.05 1,696.61 2,158.54 1,787.29

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BALANCE SHEET

BALANCE SHEET

    in Rs. Crores………….
  Mar 18 Mar-17 Mar-16 Mar-15 Mar-14
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS          
Equity Share Capital 687.44 635.78 630.31 596.79 550.55
Preference Share Capital 0 0 111 111 111
Total Share Capital 687.44 635.78 741.31 707.79 661.55
Revaluation Reserve 2,581.24 1,424.71 1,459.34 0 0
Reserves and Surplus 19,779.43 17,838.68 16,544.67 16,722.39 14,117.15
Total Reserves and
22,360.67 19,263.39 18,004.01 16,722.39 14,117.15
Surplus
Total ShareHolders Funds 23,048.11 19,899.17 18,745.32 17,430.19 14,778.69
Minority Interest 0 8.81 19.17 29.79 40.54
Deposits 344,117.51 317,450.34 297,651.06 263,681.55 222,776.52
Borrowings 30,636.61 35,168.00 29,316.23 23,796.88 17,909.49
Other Liabilities and
9,562.33 11,042.64 9,282.69 7,973.51 7,519.45
Provisions
Total Capital and 355,014.4
407,364.56 383,568.95 312,911.92 263,024.69
Liabilities 6
ASSETS          
Cash and Balances with
15,606.92 15,063.87 18,419.98 10,763.22 11,633.69
Reserve Bank of India
Balances with Banks
Money at Call and Short 14,009.89 7,539.14 4,900.66 5,447.98 4,070.15
Notice
Investments 90,573.21 95,449.41 94,636.35 81,808.31 63,103.81
Advances 268,249.56 255,921.12 229,104.67 208,102.43 177,882.09
Fixed Assets 3,951.85 2,694.43 2,623.39 2,495.40 2,347.80
Other Assets 14,973.13 6,900.99 5,329.40 4,294.57 3,987.16
355,014.4
Total Assets 407,364.56 383,568.95 312,911.92 263,024.69
6
CONTINGENT LIABILITIES,
         
COMMITMENTS
Bills for Collection 42,490.45 38,741.69 32,835.71 23,976.72 16,508.15
Contingent Liabilities 369,977.03 324,064.17 175,164.16 306,870.76 222,330.63

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1. Table showing the classification of respondent on the basis of ownership

structure

TABLE NO. 1

Category No. of Respondents Percentage Valid % Cumulative%

Sole proprietor 26 52 52 52
Private
9 18 18 70
company
Partnership 11 22 22 92
Other 4 8 8 100
Total 50 100 100
SOURCE: Questionnaire

CHART NO. 1

Graph showing ownership structure of business

No. of Respondents
8%

Sole proprietor
22% Private company
Partnership
52% Other

18%

Interpretation:

From the table it is clear that among 50 respondents, 52% of the respondents are in
the sole proprietorship and the remaining are involved in private(18%),
partnership(22%) and other(8%) business ownership.

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2. Table showing the classification of respondents on the basis of their category.

TABLE NO. 2

Category No. of respondents Percentage Valid % Cumulative%

Manufacturer 12 24 24 24
Distributors 4 8 8 32
Wholesalers 5 10 10 42
Retail trader 26 52 52 94
Other 3 6 6 100
Total 50 100 100

SOURCE: Questionnaire

CHART NO. 2

Graph showing the category of respondents

No. of Respondents
6%
Manufacturer
24% Distributors
Wholesalers
Retail trader
8% Other
52%
10%

Interpretation:

The above table it is evident that among 50 respondents, 52% are the Retail traders,
24% of the respondents are manufactures, 10% of the respondents are wholesalers,
8% distributors and the remaining 6% belongs to other category.

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3. Table showing the classification of respondents on the basis of duration of

relationship with the bank

TABLE NO. 3

Duration (in years) Respondents Percentage Valid % Cumulative%

Less than 5 12 24 24 24
5-7 years 10 20 20 44
7-10years 5 10 10 54
10-13years 8 16 16 70
More than13 15 30 30 100
Total 50 100 100
SOURCE: Questionnaire

CHART NO. 3

Graph showing the duration of relationship with the bank

No. of Respondents
20% Less than 5 years
24% 5-7 years
7-10years
10% 10-13years
More than13years

16%
30%

Interpretation:

From the above table shows that among 50 respondents, 30% of the respondents are
having long relationship with UBI more than l3 years, 24% of the respondents are less
than 5 years and 10% of the respondent are having the short relationship with 7-10
years, 16% of the respondents have relationship with UBI 10-13 years, 20% of the
respondents have relationship with UBI 5-7 years.

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4. Table showing the classification of respondents on the basis of collateral

security provided by customers to bank.

TABLE NO. 4

Collateral security No. of respondents percentage Valid % Cumulative%

Land & building 15 30 30 30

Bond/deposits 20 40 40 70
Any other 10 20 20 90
documents
Other 5 10 10 100
Total 50 100 100
SOURCE: Questionnaire

CHART NO. 4

Graph showing the collateral security provided

No. of Respondents

30 40 20 10

15 20 10 5
Land & building Bond/deposits Any other documents Other

percentage No. of respondents

Interpretation:

From the above table it is evident that, among 50 respondents, 40% of the respondents
have given bond, 30% of the respondents have given land and building, 20% any
other document and remaining are 10%.

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5. Table showing the classification of the respondent on the basis of banking

facilities customers enjoy with the bank.

TABLE NO. 5

Banking facilities No. of respondents percentage Valid % Cumulative %

Saving bank account 18 36 36 36

Current account 22 44 44 80

Fixed deposits 7 14 14 94

Recurring deposits 3 6 6 100

Total 50 100 100

SOURCE: Questionnaire

CHART NO. 5

Graph showing the banking facilities

No. of Respondents
6%

14% Saving bank account

36% Current account
Fixed deposits
Recurring deposits

44%

Interpretation:

From the above table it is evident that among 50 respondents, 36% of the respondents
are having the saving account, 44% of the respondents are having the current account,
14% of the respondents are having the fixed deposits and 6% respondents are having
recurring deposit account with the union bank of India.

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6. Table showing the classification of the respondent on the basis of time factor
for renewal/ enhancement procedure provided by union bank of India.

TABLE NO. 6

Time factor Respondents Percentage Valid % Cumulative%

More time 14 28 28 28
consuming
Normal time 20 40 40 68
consuming
Less time 16 32 32 100
consuming
Total 50 100 100
SOURCE: Questionnaire

CHART NO. 6

Graph showing the time factor for renewal procedure

No. of Respondents
32% 28%

More time consuming

Normal time consuming
Less time consuming

40%

Interpretation:

From the above table it is evident that among 50 respondents, 28% of the respondents
are saying that more time consuming for renewal of SME loan, 40% 0f the respondent
saying that normal time consuming for renewal of loan, 32% of respondents are
saying that less time consuming for renewal of loan in union bank of India.

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7. Table showing the classification of the respondent on the basis of speed of

processing loan application provided by union bank of India.

TABLE NO. 7

Category No. of respondents Percentage Valid % Cumulative%

Very fast 4 8 8 8
Fast 6 12 12 20
Normal 15 30 30 30
Slow 20 40 40 90
Very slow 5 10 10 100
Total 50 100 100
SOURCE: Questionnaire

CHART NO. 7

Graph showing the speed of processing the loan application.

No. of Respondents
10% 8%
12%

40%
30%

Very fast Fast Normal Slow Very slow

Interpretation:

From the above table it is evident that among 50 respondents, 8% of the respondents
say that the speed of processing loan applications are very fast, 30% says that the
speed of processing loan applications are normal and 10% says that the speed of
processing loan applications are very slow.

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8. Table showing the classification of respondents on the basis of number of days

taken to SME loan.

TABLE NO. 8

No of days Respondents Percentag Valid % Cumulative%

e
2-4 days 1 2 2 2
4-8 days 10 20 20 22
8-15 days 36 72 72 94
15-20 days 3 6 6 100
Total 50 100 100
SOURCE: Questionnaire

CHART NO. 8

Graph showing number of days taken to sanction SME loan.

No. of Respondents
2-4 days 4-8 days 8-15 days 15-20 days
2%
6%
20%

72%

Interpretation:

In the above table it reveals that, from among the 50 respondents, 72% of respondents
say that the loan is sanctioned in 8-15 days, 20% says 4-8 days, 6% of respondents
say that the loan is sanctioned in 15-20 days and 2% 2-4 days.

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9. Table showing the classification of respondents on the basis of customer

opinion on the SME product.

TABLE NO. 9

Categor No.of Percentage Valid % Cumulative

y Respondents %
Excellen 16 32 32 32
t
Good 33 66 66 98
Average 1 2 2 100
Poor 0 0 0
Total 50 100 100
SOURCE: Questionnaire

CHART NO. 9

Graph showing customer opinion about product

No. of Respondents
2%

Excellent
32% Good
Average
Poor

66%

Interpretation:

From the above table it is evident that, among 50 respondent, 32% of the respondents
says that SME products are excellent, 66% of the respondents says that products are
good and remaining products are average so half the products are good.

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10. Table showing the classification of respondents on the basis of ranks towards
the credit service by union bank of India to SME.

TABLE NO. 10

Category Respondents Percentage Valid % Cumulative

Poor 2 4 4 4

Neither poor nor good 14 28 28 32

Good 30 60 60 92

Very good 4 8 8 100

Total 50 100 100

SOURCE: Questionnaire

CHART NO. 10

Graph showing the credit service facility.

No. of Respondents
70
60
50
No. of Respondents
40 percentage
30
20
10
0
Poor Neither poor nor good Good Very good

Interpretation:

From the above table it can be observed that the bank is providing all the required
service given to the customers. So 60% give a good opinion about UBI and 28% are
neither poor nor good and rest of all have their different opinion.

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11. Table showing classification on the basis of satisfaction level of customer with
credit facility provided by UBI.

TABLE NO. 11

Satisfaction No of respondents Percentag Valid % Cumulative%

level e
Highly 2 4 4 4
dissatisfied
Dissatisfied 3 6 6 10
Neither satisfied 4 8 8 18
nor dissatisfied
Satisfied 36 72 72 90
Highly satisfied 5 10 10 100
Total 50 100 100
SOURCE: Questionnaire

CHART NO. 11

Graph showing satisfaction level of customers.

No. of Respondents
4%
10% 6% Highly dissatisfied
8% Dissatisfied
Neither satisfied nor
dissatisfied
Satisfied
Highly satisfied

72%

Interpretation:

From the above table it is clear that among 50 respondents, 72% of respondents are
satisfied with credit facility, 10% are highly satisfied, 4% are highly dissatisfied and
remaining 18% are neutral.

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12. Table showing the classification of respondents on the basis of type of SME
loan taken from other financial institution other than UBI.

TABLE NO. 12

Particular No. of Respondents Percentage Valid % Cumulative (%)

IDBI 3 6 6 6

SIDBI 8 16 16 22

OTHERS 10 20 20 42

NONE 28 56 56 100

TOTAL 50 100 100

SOURCE: Questionnaire

CHART NO. 12

Graph showing respondents taken loan other than UBI

No. of Respondents
No. of Respondents Percentage

56
NONE
28

20
OTHERS
10

16
SIDBI
8

6
IDBI
3

Interpretation:

From the table it is clear that out of 50 respondents, 56% of customers have not taken
loan from the others apart from UBI, 16% from SIDBI and rest of them have not
taken from others.

CHAPTER-V

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5.1 FINDINGS:
 The sanctioning of SME loan is subject to the historical backdrop of customer,
his position in the business, managing the other finance related foundation and
collateral security covers are taken into consideration while assessing his
proposition.

 It is found that majority of SME type of loan are the trader’s easy loan as
compared to other SME loans given to customers.

 It is found that out of 50 respondents, 52% of the SME credit has a place with
the retail brokers, 24% produces and staying to other class.

 It is found that a large portion of respondents are having the involved

acquaintance with UBI 30%.

 It is found that most than a large portion of the respondents are getting a
charge out of the present record office (44%).

 UBI clients are fulfilled by the administration quality and credit office of the
bank and the period taken to endorse the SME advance.

 It is found that the vast majority of the respondents acknowledge there is

ordinary lengthy for advance reestablishment (40%).

 It is found that from 50 respondents 72% of them are fulfilled by credit office
of UBI, 8% stand nonpartisan and remaining are not fulfilled.

 It is found that 72% of the clients SME advance is authorized in 2 weeks and
20% in week and rest following 2 weeks.

 It is found that the greater part of the respondents concurring that the rate of
handling credit is low 10%.

5.2 SUGGESTIONS:

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 Customers are happy with credit facility but it is suggested that the UBI
should increase SME loan sanctioning budget because enterprise wants to take
more benefit from UBI to SME loan.

 UBI should customize the SME credit items as indicated by the clients need
and necessities.

 The current appraisal process for credit is great, so there is no compelling

reason to change this procedure.

 Attract the customers, UBI should sanction SME loan within a week instead of
taking more number of days.

 Reduce, document required for processing the loan.

 The processing time for loan time should be reduced 4-5 days.

 To reduce the risk, the bank should review high value loans within 3 months
of the sanction instead of 4 or 5 months, if the factors are including
determination in the credit quality.

5.3 CONCLUSION:

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In conclusion it can be seen that Union bank of India, has been rendering
excellent services to their customers in general and to the SMEs in particular. The fair
manner in which the bank encourages the entrepreneurs makes the latter take the tasks
with seriousness, pride overcome all difficulties. They tend to get motivated by
positive action reflected by the UBI.

SME growth is sound for any economy and the bank is gaining more profit by
appraising and providing SME loans to customer and enterprises agree that UBI are
good supported to SME by assessing the collateral security and repayment capacity of
customer. To conclude, UBI has been doing a good job in the matter of lending to
SMEs and its customers have been benefited to great extent and are satisfied about the
services received.

QUESTIONNAIRE

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Credit Appraisal Process Of SME.

Dear Sir / Madam

I Manjunath Mathad pleased to introduce myself as BBA student of

Govt. First Grade College Ranebennur. as a part of our curriculum I have undertaken
a project to determine the “Credit Appraisal of Small and Medium Enterprises by
UNI”. I will make sure that information provided by you will be of great help to me
and will be kept confidential and used for project only.

PERSONAL DETAILS:

NAME OF THE UNIT:

PROPRIETOR NAME:

ADDRESS:

1. Please specify the ownership structure of your business:

a. Sole proprietorship ( )
b. Partnership ( )
c. Private company ( )
d. Other ( )

2. Which type of category you belong:

a. Manufacturer ( )
b. Wholesaler ( )
c. Distributors ( )
d. Retail traders ( )

3. Since from how many years is your business is in existence:

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Credit Appraisal Process Of SME.

a. Less than 5 ( )
b. 5-7 years ( )
c. 10-15 years ( )
d. More than 15 ( )

4. What is your annual turnover of your business: (in lakhs)

a. 10-30 ( )
b. 30-50 ( )
c. 50-80 ( )
d. 80-100 ( )

5. How long does the organization relationship with this bank.

a. Less than 5 years ( )
b. 5-7 years ( )
c. 7-10 years ( )
d. 10-13 years ( )
e. More than 13 years ( )

6. What are the other facilities you enjoy with the bank.
a. Saving bank account ( )
b. Current account ( )
c. Fixed deposits account ( )
d. Recurring account ( )
e. Other ( )

7. What did you feel about the time involved credit renewal procedure
a. More time consuming ( )
b. Normal time consuming ( )
c. Less time consuming ( )

8. How do you feel about the documentation required for processing loan
application?

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Credit Appraisal Process Of SME.

a. Very heavy ( )
b. Less ( )
c. Normal ( )
d. Very less ( )

9. How do you feel about the speed of processing the loan application?
a. Very fast ( )
b. Fast ( )
c. Normal ( )
d. Slow ( )
e. Very slow ( )

10. How do you feel about the SME Product?

a. Excellent ( )
b. Good ( )
c. Average ( )
d. Poor ( )

11. Have you taken loan other than UBI from

a. IDBI ( )
b. SIDBI ( )
c. Others ( )
d. None ( )

12. What collateral security you have given to bank?

a. Land & building ( )
b. CGTM cover ( )
c. Bond/ deposit ( )
d. Other ( )

13. How many days it has taken to sanction the credit loan
a. 2-4 days ( )

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Credit Appraisal Process Of SME.

b. 4-8 days ( )
c. 8-15 days ( )
d. 15-20 days ( )

14. Please rate the following with credit facility provided by UNI
a. 1 ( )
b. 2 ( )
c. 3 ( )
d. 4 ( )
e. 5 ( )

15. Weather the period of repayment of loan is adequate

Yes ( )

No ( )

16. Please rank the following towards credit service facility by the UNI to SME?

DEPT. OF COMMERCE, GFGC, RANEBENNUR. Page 54

Credit Appraisal Process Of SME.

Particulars

Documentation

Quality service

Processing
time

Hidden
charges

Attitude of
bank officials

 any suggestion for the

Bank----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
------------------------------

Date:

Place:

Signature of the Respondent

BIBLIOGRAPHY

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Credit Appraisal Process Of SME.

BIBLIOGRAPHY:

WEBSITES:

 www.unionbankofindia.co.in

 www.wikipedia.com

 www.capitaline.com

JOURNALS:

 Bank circular

 Loan broachers

 Annual Report

DEPT. OF COMMERCE, GFGC, RANEBENNUR. Page 56