SME Synopsis

Small and Medium Enterprises

Small and medium enterprises or small and medium-sized enterprises are companies whose personnel numbers fall below certain limits. Small enterprises outnumber large companies by a wide margin and also employ many more people. SMEs are also said to be responsible for driving innovation and competition in many economic sectors. In India it consists of three types of industry: Micro-enterprise A micro-enterprise is one where the investment in plant and machinery (their original cost excluding land, building and items specified by the Ministry of Small Scale Industries in its notification No. S.O. 1722(E) dated October 5, 2006) does not exceed Rs.25 lakh. Small enterprise A small enterprise is one where the investment in plant and machinery (see above) is more than Rs.25 lakh but does not exceed Rs.5 crore. Medium enterprise A medium enterprise is one where the investment in plant and machinery (see above) is more than Rs.5 crore but does not exceed Rs.10 crore. The definition of MSMEs in the service sector is: Micro-enterprise: Investment in equipment does not exceed Rs.10 lakh Small enterprise: Investment in equipment is more than Rs.10 lakh but does not exceed Rs.2 crore Medium enterprise: Investment in equipment is more than Rs.2 crore but does not exceed Rs.5 crore

PTO.

The importance of SME sector is well-recognized world over owing to its significant contribution in achieving various socio-economic objectives, such as employment generation, contribution to national output and exports, fostering new entrepreneurship and to provide depth to the industrial base of the economy. India has a vibrant SME sector that plays an important role
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in sustaining economic growth, increasing trade, generating employment and creating new entrepreneurship in India. Therefore to capture the market of SME finance, every bank is coming up with new and attractive financial packages for the industry. Bank of Baroda is also trying to understand the growing needs of this sector and formed an SME policy. Our work requires to understand the financial needs of a selected industry in this sector and to develop a complete financial package for them. The project necessitates talking with the industry people, getting their financial data and estimating their requirement of finance over a period of 5 to 10 years. Based on this extensive analysis a project report on developing the financial package would be written.

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