SUMMER INTERNSHIP PROJECT REPORT

SME Market in Delhi Region - Opportunity Scoping in

Connaught Place and South Delhi

Submitted By

Shubhankar Rawat
Applicant ID: 4843724

Under the guidance of

Mr. Gaurav Khanna (Project Buddy)

Mr. Mahendra Singh (Project Guide)
 ACKNOWLEDGEMENT

I am grateful to my mentor and project buddy Mr. Gaurav Khanna, whose insightful
leadership and knowledge benefited me to complete this project successfully. Thank you so
much for your continuous support and presence whenever needed.

I would like to express my gratitude to my project guide, Mr. Mahendra Singh, who encouraged,
guided and provided valuable insights to the project.

I would also like to thank my mentor Dipasha Sharma for her advice and contribution to the
project and for preparing this report. Lastly, I would like to thank the Corporate Relations
Team of SCMHRD and ICICI Bank for giving me an opportunity to utilize my summers and
enhance my skills in one of the most prominent banks of the country and makethis project an
eminent success.

Shubhankar Rawat
Applicant ID: 4843724

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EXECUTIVE SUMMARY

The report is prepared to reflect upon the work done during the two months of summer
internship at ICICI Bank SME group. This report also effectively depicts learning of the topic
and some brief explanation about the learnings as an intern.

ICICI Bank Limited is one of India's most well-known private banks. For consumers, small and
medium-sized businesses (SMEs), and corporate customers, the bank offers a wide spectrum
of financial and business products and services.

The small and medium enterprises (SME) portfolio comprise of exposures to companies with
a turnover of up to 2.50 billion. The business banking portfolio comprises small business
customers with an average loan ticket size of 10.0-15.0 million. The Bank's focus in these
businesses is on parameterized and programmed-based lending, which is granular and well-
collateralized. ICICI Bank offers its SME and business banking customers a wide spectrum of
solutions addressing their evolving business needs such as customized offerings, faster
turnaround time, transaction convenience, timely access to capital and cross-border trade
and foreign exchange products. Providing digital solutions is at the core of the engagement,
with the range of solutions spanning customer onboarding, payments and collections, lending
and cross-border transactions.

The internship program provided me with the learning on the topic of SME and business
process of the various transaction that happens via ICICI Bank. Through these two months of
internship program, I was able to gain knowledge about the compliances that ICICI has to go
through and was also able to get some insights about the operation side of it. This is also
depicted through the report.

REPORT OBJECTIVE

The main objective of this report is to give the comprehensive overview of the SME Sector in
India including the current scenario. The report also depicts the two months of learning about
the topic and the tasks performed as an intern in the business team of the ICICI SME group.

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ABOUT THE ORGANIZATION

ICICI Bank Limited is one of the leading banks in the private sector in India. The bank offers a
diverse portfolio of financial and business solutions and services for retail, small and medium
enterprises (SMEs), and corporate customers.

ICICI was founded as the Industrial Credit and Investment Corporation of India in 1955 as a
joint venture between the World Bank and various public sector entities. The first chairman
of ICICI Limited was Mr. A. Ramaswami Mudaliar. They majorly became the institution that
provided financing assistance to long-term and medium-term projects. It focused on project
finance and long-term financing for various industrial projects till the liberalization of the
financial sector in the early 1990s. As the economy became more market-oriented, ICICI
remodeled its business and provided financial assistance to diverse portfolios and their core
long-term project finance.

In order to capitalize on the new avenues and widen the product and service portfolio, the
Industrial Credit and Investment Corporation of India Bank was incorporated in 1994. They
were the first few banks that initialized and developed the Internet banking culture in India,
as they started the same in 1998. The name of the bank was later abbreviated to ICICI Bank
in September 1999. Furthermore, ICICI also became the first non-Japanese Asian bank listed
on the New York Stock Exchange. In 2001, along with the two wholly-owned retail
subsidiaries, namely ICICI Personal Financial Services Limited and ICICI Capital Services
Limited, ICICI and ICICI Bank merged into one entity called ICICI Bank Limited. The complete
merger of all the wholesale and retail entities was subsequent to the merger, which was finally
approved by the Reserve Bank of India and the Mumbai High Court in April 2002.

Mr. Girish Chandra Chaturvedi is currently presiding as the bank's Chairman and a Non-
executive Director while Mr. Sandeep Bakshi holds the position of Managing Director and
Chief Executive Officer since 2018 when Ms. Chanda Kochhar stepped down from the position.

ICICI Bank is the second-largest private bank in India in terms of assets and market
capitalization and is headquartered in Mumbai, Maharashtra. The bank reported the Total
Consolidated Assets worth INR 15.74 trillion with a core operating profit of INR 313.51 billion.
The bank registered INR 161.93 billion in profit after tax. The bank has 5,266 branches and
more than 14,136 ATMs spread across the country as per the 2021 annual report. The bank
also reported the Total Capital Adequacy ratio of 19.12% with Net Interest Margin of 3.69%.
Even during the pandemic, the company operated over 97% of the branches, especially from
April to May 2021.

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ICICI Bank has branches across major countries around the globe. It includes the branches in
the United States, China, Qatar, Singapore, Malaysia, Hong Kong, Bangladesh, Dubai, Bahrain,
Sri Lanka, South Africa, Indonesia, Thailand, United Arab Emirates, etc. The bank also has
subsidiaries in Russia, Canada, and the United Kingdom. The United Kingdom-based
subsidiaries have branches in Germany and Belgium.

RECENT HIGHLIGHTS

iMobile Pay: In December 2020, ICICI Bank introduced 'iMobile Pay,' a payment and financial
services app that can be utilized by users of any bank. Over 2.5 million users of other banks
had downloaded the app within five months of its introduction.

Video KYC: It was launched by ICICI Bank to allow clients to complete the Know Your Customer
(KYC) procedure via video conversation. The bank is the first in the industry to provide this
service for salary accounts, personal loans, and credit cards. This also led to issuing 75% of
credit cards digitally

EMI@Internet Banking: The ‘EMI@Internet Banking’ service of ICICI Bank allows pre-
approved customers to convert their high value online purchases into instant EMIs. The Bank
is the first in the industry to introduce this facility.

Digital Transaction: Over 90% of the transaction done in ICICI bank savings account were done
digitally be it financial or non-financial. The UPI payments also increased by 3.3 times in value
and 1.9 times in volume.

KEY BUSINESS AREAS

ICICI Bank has divided its businesses broadly into three areas. The following have been
mentioned below:

Retail, SME, and Rural Banking: Through its digital platforms and broad branch network
across urban and rural India, ICICI Bank provides deposit, credit, and other financial products
and services to individuals, families, and small enterprises across India. Specific products,
including deposits and remittances to non-resident Indians and local market offers in select
overseas locations, are also available.

Wholesale Banking: ICICI Bank provides business and financial solutions to large and medium-
sized organizations, government and public sector entities, and their channel and business
partners. Transaction banking, long-term financing, trade, working capital, deposits, treasury
management, and cash management are among the products available for these

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 organizations: the worldwide presence and the Indian network suit the clients' cross-border
needs. Furthermore, employees of the corporate clients can also use the retail services, thus
providing a complete service to the business ecosystems.

Treasury Banking: Treasury activities at ICICI Bank include managing the bank's liquidity,
government securities portfolio and interest rate risk, proprietary trading, and client foreign
currency and derivative solutions.

VISION

To be the trusted financial services provider of choice for our customers, thereby creating
sustainable value for our stakeholders.

MISSION

To grow our risk-calibrated core operating profit by:

• Delivering products and services that create value for customers.
• Bringing together all our capabilities to seamlessly meet customer needs.
• Conducting our business within well-defined risk tolerance levels.

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 SUMMER INTERNSHIP PROJECT

The summer internship project titled ‘SME Market in Delhi Region - Opportunity
Scoping in Connaught Place and South Delhi’ was divided into two phases.

PHASE 1

In the initial stages of the project, a basic understanding of the topic is required. To get this
understanding, a thorough study was done about the topic. Initially, a basic understanding
was developed about the topic and was discussed with my buddy and my guide here at ICICI
bank.

Learnings about SMALL AND MEDIUM-SIZED ENTERPRISES

DEFINITION

In accordance with the provision of Micro, Small & Medium Enterprises Development
(MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified as below:
(i) a micro enterprise, where the investment in plant and machinery or equipment
does not exceed one crore rupees and turnover does not exceed five crore rupees;
(ii) a small enterprise, where the investment in plant and machinery or equipment does
not exceed ten crore rupees and turnover does not exceed fifty crore rupees; and
(iii) a medium enterprise, where the investment in plant and machinery or equipment
does not exceed fifty crore rupees and turnover does not exceed two hundred and
fifty crore rupees.

The new classification has come into effect from 1st July, 2020. The earlier criterion of
classification of MSMEs under MSMED Act, 2006 was based on investment in plant and
machinery / equipment. It was different for manufacturing and services units. It was also very
low in terms of financial limits. Since then, the economy has undergone significant changes. A
revision in MSME criteria of classification was announced in the Atmanirbhar Bharat package
on 13th May, 2020. This has been done in order to be realistic with time and to establish an
objective system of classification and to provide ease of doing business. Now, there will be no
difference between manufacturing and service sectors. Also, a new criterion of turnover has
been added in the previous criteria of classification based only on investment in plant and
machinery. The new criteria are expected to bring about many benefits that will aid MSMEs
to grow in size. It has also been decided that the turnover with respect to exports will not be
counted in the limits of turnover for any category of MSME units whether micro, small or
medium. This is yet another step towards ease of doing business. This will help in attracting
investments and creating more jobs in the MSME sector. The change in criteria of classifying
the MSMEs is set to offer major relief to the exporters.

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BACKGROUND

The Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and
dynamic sector of the Indian economy over the last five decades. It contributes significantly in
the economic and social development of the country by fostering entrepreneurship and
generating large employment opportunities at comparatively lower capital cost, next only to
agriculture. MSMEs are complementary to large industries as ancillary units and this sector
contributes significantly in the inclusive industrial development of the country. The MSMEs are
widening their domain across sectors of the economy, producing diverse range of products and
services to meet demands of domestic as well as global markets.

Ministry of Micro, Small & Medium Enterprises (M/o MSME) envisions a progressive MSME
sector by promoting growth and development of the Sector, including Khadi, Village and Coir
Industries, in cooperation with concerned Ministries/Departments, State Governments and
other Stakeholders, through providing support to existing enterprises, adopting cutting edge
technologies and encouraging creation of new enterprises.

The Ministry of MSME runs various schemes aimed at financial assistance, technology
assistance and upgradation, infrastructure development, skill development and training,
enhancing competitiveness and market assistance of MSMEs.

The Micro, Small and Medium Enterprises Development (MSMED) Act was notified in
2006 to address different issues affecting MSMEs, inter alia, the coverage and investment
ceiling of the sector. The MSMED Act seeks to facilitate the development of these
enterprises as also enhance their competitiveness. The MSMED Act has the following key
provisions:

- Establishment of a National Board for Micro, Small and Medium Enterprises headed
by the Minister for MSME. The role of the Board is to examine the factors affecting
the promotion and development of MSMEs, review the policies and programs
of the Central Government and make recommendations in regard to facilitating the
promotion and development and enhancing their competitiveness.
- It provides the legal framework for recognition of the concept of “enterprise” which
comprises both manufacturing and service entities. It defines medium enterprises for
the first time and seeks to integrate the three tiers of these enterprises, namely, Micro,
Small and Medium.
- It empowers the Central Government to undertake programs and issue guidelines
and instructions to develop and enhance the competitiveness of MSMEs.

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ROLE OF MSMES IN INDIAN ECONOMY

The Micro, Small & Medium Enterprises (MSMEs) have been contributing significantly to the
expansion of entrepreneurial endeavors through business innovations. The MSMEs are
widening their domain across sectors of the economy, producing diverse range of products and
services to meet demands of domestic as well as global markets. The MSMEs in India are
playing a crucial role by providing large employment opportunities at comparatively lower
capital cost than large industries as well as through industrialization of rural & backward areas,
inter alia, reducing regional imbalances, assuring more equitable distribution of national
income and wealth.

MSMES' CONTRIBUTION TO INDIAN ECONOMY

The MSME sector in India gave a major boost to the economy. Over 63 million MSMEs spread
across the country contributed 30.5% to India's GDP in FY19 and 30% in FY20. It also created
many employment opportunities. Based on a study conducted by the Ministry of Statistics & PI
between July 2015 and June 2016, the MSME sector employed 111 million workers. Compared
with large-scale companies, MSMEs aided in the industrialization of rural areas at minimal
capital cost. The sector has made significant contributions to the country's socio-economic
growth and complemented major industries as well. MSMEs account for approximately 40% of
India's total exports, 6.11% of GDP from the manufacturing sector and 24.63% of GDP from the
services sector.

MARKET SIZE

The BSE SME (small and medium enterprises) platform is expected to witness >60 SMEs to
enter the market in one year (2021-22) to bring up equity funds for meeting their business
requirements. The initial public offering (IPO) route witnessed 16 SMEs enter the market; they
raised Rs. 100 crore (US$ 13.74 million) in 2020. In June 2021, Bombay Stock Exchange (BSE)
announced that it has collaborated with Electronics and Computer Software Export Promotion
Council (ESC) to build awareness among small businesses and start-ups about advantages of
listing.

MSMEs are being encouraged to market their products on the e-commerce site, especially
through Government e-Marketplace (GeM), owned and run by the government, wherefrom
Ministries and PSUs (public sector undertakings) source their procurement. As of March 24,
2022, the GeM portal has served 9.63 million orders worth Rs. 219,071 crore (US$ 28.70
billion) from 4 million registered sellers and service providers for 59,259 buyer organizations.

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Domestic business requires a strong financial stimulus with concessional working capital
loans to ensure adequate liquidity is maintained in business operations from the
government and financial institutes.

Indian Micro, Small and Medium Enterprises (MSMEs) are rapidly adopting digital
payments over cash, with 72% payments done through the digital mode compared with
28% cash transactions. Rise in digital adoption presents prospects for further growth in the
sector.

ESTIMATED NUMBER OF MSMES IN COUNTRY:

Micro sector with 630.52 lakh estimated enterprises accounts for more than 99% of total
estimated number of MSMEs. Small sector with 3.31 lakh and medium sector with 0.05 lakh
estimated MSMEs accounted for 0.52% and 0.01% of total estimated MSMEs, respectively. Out
of 633.88 estimated number of MSMEs, 324.88 lakh MSMEs (51.25%) are in rural area and 309
lakh MSMEs (48.75%) are in the urban areas.

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TYPE OF OWNERSHIP OF ENTERPRISES

Out of 633.88 MSMEs, there were 608.41 lakh (95.98%) MSMEs were proprietary concerns.
There was dominance of male in ownership of proprietary MSMEs. Thus, for proprietary
MSMEs as a whole, male owned 79.63% of enterprises as compared to 20.37% owned by
female. There was no significant deviation in this pattern in urban and rural areas, although the
dominance of male owned enterprises was slightly more pronounced in urban areas compared
to rural areas (81.58% as compared to 77.76%).

The socially backward groups owned almost 66.27% of MSMEs. Bulk of that was owned by
OBCs (49.72%). The representation of SC and ST owners in MSME sector was low at 12.45%
and 4.10% respectively. In rural areas, almost 73.67% of MSMEs were owned by socially
backward groups, of which 51.59% belonged to the OBCs. In urban areas, almost 58.68%
belonged to the socially backward groups, of which 47.80% belonged to the OBC.

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The analysis of enterprises owned by socially backward groups in each of the three segments of
MSME sector reveals that micro sector had 66.42% of enterprises owned by socially backward
group, whereas small and medium sectors had 36.80% and 24.94% of enterprises owned by
socially backward groups, respectively.

As per the National Sample Survey (NSS) 73rd round conducted during the period 2015-16,
MSME sector has been creating 11.10 crore jobs (360.41 lakh in Manufacturing, 0.07 lakh in
Non-captive Electricity Generation and Transmission, 387.18 lakh in Trade and 362.82 lakh in
Other Services) in the rural and the urban areas across the country.

Micro sector with 630.52 lakh estimated enterprises provided employment to 1076.19 lakh
persons that in turn accounts for around 97% of total employment in the sector. Small sector
with 3.31 lakh and medium sector with 0.05 lakh estimated MSMEs provided employment to
31.95 lakh (2.88%) and 1.75 lakh (0.16%) persons of total employment in MSME sector,
respectively.

Out of 1109.89 lakh employees in MSME sector, 844.68 (76%) are male employees and
remaining 264.92 lakh (24%) are females.

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COMPARATIVE ANALYSIS

The comparative distribution of MSMEs in the top 10 States in percentage

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RECENT POLICY INITIATIVES FOR MSME

UDYOG AADHAAR MEMORANDUM

▪ Udyog Aadhaar Memorandum (UAM) is a one-page online registration system for MSMEs
based on self-certification.
▪ The information sought is on a self-certification basis and no supporting documents are
required at the time of online filing of UAM.
▪ As per the Union Budget 2021-22, India has ~6.8 million Udyog Aadhar registered MSMEs
▪ In June 2021, the Ministry of Micro, Small and Medium Enterprises extended the validity of
Udyog Aadhaar Memorandum from March 31, 2021, to December 31, 2021.

MSME DATABANK

▪ MSME DataBank enables the Ministry of MSME to streamline and monitor the schemes and
pass on the benefits directly to MSMEs.
▪ It is helpful for MSME units that can update their enterprise information as and when
required without visiting any government office and updating information about their
products/services.
▪ Until May 2019, more than 6.1 lakh MSMEs registered in the databank.

MY MSME

▪ In order to facilitate the enterprises to enjoy benefits of various schemes, the MSME office
launched a web-based application module in the form of a mobile app called My MSME.
▪ This allows enterprises to make their applications and check for schemes on their mobile
phone using the app.

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TECHNOLOGY CENTRE SYSTEMS PROGRAMME (TCSP)

▪ In March 2021, the Ministry of MSME, through the Development Commissioner (DC-MSME),
implemented the Technology Centre Systems Program (TCSP) to establish 15 new technology
centers (TC).
▪ The centers provide assistance to the industry, predominantly MSMEs in the General
Engineering, Automotive, Fragrance & Flavor and ESDM sectors.
MSME SAMPARK

▪ Launched in 2018, the MSMR Sampark portal is a digital platform wherein jobseekers
(students or trainees of MSME Technology Centers) and recruiters can register themselves for
mutually beneficial interactions.

DIRECT BENEFIT TRANSFER IN THE M/O MSME

▪ The welfare and subsidy schemes of the Government of India (GOI) have been brought under
a single platform, i.e., the Direct Benefit Transfer (DBT), to reform the delivery system, ensure
faster flow of funds, target beneficiaries, avoid duplication and reduce frauds.
▪ In 2019, 20 MSME schemes have been listed on the DBT Bharat Portal.
▪ Under DBT, the schemes have been categorized on the basis of benefit type to the
beneficiary, i.e., Cash or Composite (cash and kind).

DIGITAL PAYMENTS

▪ As part of the Digital India initiative, the Ministry of MSME has taken numerous initiatives to
digitally enable the entire MSME ecosystem—all MSME offices have been digitally empowered,
efforts have been taken to spread awareness on the benefits of digital mode of payments such
as BHIM, UPI and Bharat QR code.
▪ In FY21, the number of digital transactions stood at 437,118 lakh and worth Rs. 141,485,173
crore (US$ 18.9 trillion)

MSME-SAMBANDH

▪ For effective implementation of the Public Procurement Policy, Central

Ministries/Departments/Public Sector Enterprises (CPSEs) must procure 25% annual
procurement from MSEs—including 4% from MSEs owned by schedule cast/schedule tribes
and 3% from MSEs owned by Women entrepreneurs. The Ministry of MSME launched MSME
Sambandh.
▪ The portal helps monitor procurement by CPSEs and enables them to share the list of
required products or services from MSMEs.

GRIEVANCE MONITORING

▪ The Ministry of MSME has started an MSME internet grievance monitoring system (e-
Samadhan) to help track and monitor the grievances and suggestions received.
▪ The Ministry also attends to all the grievances on Centralized Public Grievance Redress and
Monitoring System.

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MSME SAMADHAAN

▪ MSME Samadhaan is a portal that gives information about pending payments with the
Central Ministries, State Governments, etc., with respect to micro and small enterprises
(MSEs). The government bodies are provided with a username and password to login and
check the delayed payment with respect to MSMEs.
▪ The portal also allows the MSEs to track their delayed payments related complaint online.
After 15 days of online filing, the case automatically gets registered with the MFEFC.

NATIONAL SCHEDULED CASTE AND SCHEDULED TRIBE HUB

▪ The National Scheduled Caste and Scheduled Tribe Hub has been set up to provide
professional support to SC/ST entrepreneur to fulfill the obligations of the Government Public
Procurement Policy.
▪ The Hub is also in-charge of collection, collation and dissemination of information regarding
SC/ST enterprises and entrepreneur, capacity building among existing and prospective SC/ST
entrepreneur through skill training and EDPs, promoting participation of SC/ST entrepreneur in
exhibitions and organizing special exhibitions for this purpose, etc.

MSME-SAMBHAV

▪ In November 2021, the Ministry of Micro, Small and Medium Enterprises launched SAMBHAV,
a national-level awareness program to push economic growth by promoting entrepreneurship
and domestic manufacturing.
▪ Through this program, 130 field offices of the ministry will promote entrepreneurship to
students from different colleges/ITIs in a month-long initiative under the ministry

GOVERNMENT POLICIES

The Government of India has designed various policies for the growth of MSMEs in the country.

• As of March 2022, the number of loans sanctioned under the Pradhan Mantri MUDRA
Yojana (PMMY) scheme was 48.92 million and the amount disbursed was Rs.
3,02,948.49 crore (US$ 39.90 billion).
• In the Union Budget of 2022-23 MSMEs sector was allocated an Emergency Credit Line
Guarantee Scheme (ECLGS) of Rs. 50,000 crore (US$ 6.55 billion).
• On March 30 2022, the Indian government allocated Rs. 6,062.45 crore (US$ 808
million) for the scheme Raising and Accelerating MSME Performance (RAMP). The
program aims to improve market and credit access, strengthen institutions and
governance at the center and state levels, improve center-state connections and
partnerships, resolve late payment difficulties, and green MSMEs.
• In November 2021, the Indian government launched the Special Credit Linked Capital
Subsidy Scheme (SCLCSS) for the services sector. This scheme will help enterprises in
the services sector meet various technology requirements.
• In November 2021, the Ministry of Micro, Small and Medium Enterprises launched
SAMBHAV, a national-level awareness program to push economic growth by promoting
entrepreneurship and domestic manufacturing.
• In September 2021, Union Minister for MSMEs, Mr. Narayan Rane introduced ‘India
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 Export Initiative’ and ‘IndiaXports 2021 Portal’. This initiative will help exports reach its
Rs. 2,928,000 crore (US$ 400 billion) target by the end of FY22 and further push it to Rs.
7,320,000 crore (US$ 1 trillion) by FY27.
• In September 2021, Khadi and Village Industries Commission (KVIC) established the first
‘Silk Yarn Production Centre’ in Odisha to boost the local silk industry and generate
employment.
• In September 2021, Union Minister for MSMEs, Mr. Narayan Rane inaugurated Rohtak
Technology Centre, which is expected to train >8,400 trainees annually.
• In September 2021, Khadi and Village Industries Commission (KVIC) launched SPIN
(Strengthening the Potential of India) scheme and built a pottery cluster under SFURTI
Scheme in Varanasi to support >1,100 individuals of the marginalized potters’
community.
• In July 2021, Lok Sabha passed a bill on ‘Factoring Regulation (Amendment)’ to expedite
the payments ecosystem for MSMEs.
• Budget allocation for MSMEs in FY22 more than doubled to Rs. 15,700 crore (US$ 2.14
billion) vis-à-vis Rs. 7,572 crore (US$ 1.03 billion) in FY21.
• The government also announced Rs. 3 lakh crore (US$ 40.85 billion) collateral-free
automatic loans for businesses.
• In Union Budget 2021, the government announced funds worth Rs. 10,000 crores (US$
1.36 billion) for ‘Guarantee Emergency Credit Line’ (GECL) facility to eligible MSME
borrowers, giving a major boost to the sector.

RECENT DEVELOPMENTS

• In November 2021, the Small Industries Development Bank of India (SIDBI) inked a pact
with Google to pilot social impact lending with financial assistance up to Rs. 1 crore
(US$ 133,939.60) at subsidized interest rates to micro enterprises. To reinvigorate the
Indian MSME sector, Google India Pvt. Ltd. GIPL, will bring a corpus of US$ 15 million
(~Rs. 110 crore) for micro enterprises as a crisis response related to COVID-19.

• In November 2021, digital freight forwarder Freight Walla, launched a shipment

tracking service for MSME exporters and importers based on predictive analytics to
help businesses tackle risks associated with shipment delays and improve supply chain
efficiency.

• In November 2021, Cash invoice, a supply chain financing (SCF) platform, announced
that it will aid MSMEs with over Rs. 10,000 crore (US$ 1.33 billion) worth of financing in
the year ahead, as it has raised Pre-Series A funding of US$ 1 million from Action
Venture Lab.

• In October 2021, Sundaram Finance and the MSME Development Institute (Chennai),
provided marketing assistance to MSMEs. Entrepreneurial and managerial development
of MSMEs will be done through an incubator scheme, that will give innovators
opportunities to develop and nurture ideas for the production of new products.

• In September 2021, Aerospace Engineers Private Limited, a Tamil Nadu-based MSME,

secured a contract from Boeing to produce and supply critical aviation components.

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• In September 2021, Walmart and Flipkart announced the completion of the first phase
of training of >2,500 MSMEs under Vrddhi, the supplier development program.

• In September 2021, Flipkart introduced 'Flipkart Boost’ to help digital-first consumer

brands and empower MSMEs.

• In September 2021, HDFC Bank collaborated with the National Small Industries
Corporation (NSIC) to offer credit support to the micro, small and medium enterprise
(MSME) sector.

• In August 2021, the US Agency for International Development (USAID) and the US
International Development Finance Corporation (DFC) collaborated with Kotak
Mahindra Bank to support MSMEs.

• In August 2021, Facebook India, in collaboration with Indifi, announced ‘Small Business
Loans Initiative’, a new program to support small and medium businesses (SMBs) get
quick access to credit via independent lending partners.

• In August 2021, Indian Bank introduced 'MSME Prerana', an online business-mentoring

program for MSMEs in Odisha. In FY21, the state (Odisha) accounted for ~5% of the
total MSME credit exposure of Indian Bank and recorded an increase of 39% YoY.

• In July 2021, Amazon India announced to expand its existing nine fulfilment centers and
launch additional 11 new centers. This expansion plan is expected to create direct and
indirect job opportunities in India and further strengthen Amazon’s foothold in the
country.

• In July 2021, RazorPay acquired TERA Fin labs, a provider of embedded financing
solutions, to strengthen capabilities in data-driven risk management, capital solutions
and credit underwriting to financially support MSMEs.

• In July 2021, Amazon India introduced Digital Kendra in Surat—its first brick and mortar
resource center to assist ‘kiranas’ and small businesses to go digital.

• In July 2021, the Federation of Indian Export Organizations (FIEO) signed a

memorandum of understanding (MoU) with Aramex India, logistics services provider, to
support MSME exporters in India.

• In June 2021, Tide, a UK-based business financial platform, announced to invest >Rs.
1,000 crore (US$ 134.21 million) in India over the next five years to tap the rising SME
(small and medium-sized enterprises) market.

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ROAD AHEAD

The Government of India has envisioned doubling the Indian economy to US$ 5 trillion in five
years. In order to achieve this goal, career opportunities for the young population have been
generated and MSMEs have the potential to serve as a key employment generator. Therefore,
the government has taken up promotion of MSMEs in order to create new jobs in the sector.
Further, the government aims to enhance MSME’s share in exports and its contribution to
GDP.
In order to achieve these targets, the government should invest in providing more back-end
services to improve performance of the MSME sector as it supplies goods and services to big
industrial enterprises. Lack of technology-based production activities and low investment in
R&D activities are bottlenecks hindering the sector to become competent. Globally available
technology could be subsidized by the government so that the product quality of MSME
players can be improved using the existing resources. This also requires the help of academic
institutions in the form of providing research and development (R&D) services for product
innovation.

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PHASE 2

OBJECTIVE OF THE PROJECT:

The Primary Objective of the project is to Conduct Market Research on the SMEs based out of
Connaught Place & South Delhi in the Delhi Region and Identify potential business
opportunities through various mechanisms and systems in place.

The Secondary Objective of the project comprises of assisting the Business Team with the full
cycle from getting the client on board to loan disbursal in the SME sector and aid in closing
end to end transactions. Contacting the potential Business Opportunity leads gatheredand
researched to expand the clientele base of the Bank.

SCOPE OF THE PROJECT:

The National Capital Territory of Delhi has emerged as one of the biggest centers of MSMEs in
the country. It has recorded a rapid growth in production, exports and employment. This
Sector has a proven vast potential to play a leading role in the overall development of the
national economy.
The government of Delhi has evolved over the years the role of a facilitator in the development
of the industries in the NCT of Delhi. The mission is to promote, encourage and develop
environment friendly MSMEs in Delhi. In Delhi there are 0.55 million MSMEs employing about
2 million people.
Today, this sector produces a variety of products, from simple consumer goods to high-
precision, sophisticated finished products. It has emerged as a major supplier of mass
consumption goods as well as a producer of electronic and electrical equipment.
An impetus to the sector is likely to have a multiplier impact on economic growth.

The scope of the project involved:

• Market Research
• Opportunity Scoping
• Client Acquisition
• Preliminary Sanitary Checks and Financial Analysis
• Lead Generation

INITIATIVES BY ICICI BANK FOR MSMEs

MSME LOANS FROM ICICI BANK

• Working Capital Loan: The ICICI Bank Working Capital Loan for MSMEs can be taken for all
projects and activities related to running the business on a day-to-day basis such as for
investment in current assets, purchase of raw materials, salary payments, power charges, etc.
The interest rate applicable to this loan is determined by the bank after assessing the
borrower’s business profile, past track record, cash flow, loan amount required, etc.

• Term Loan: The loan helps businesses carry out different business activities right from
building a business unit to purchasing machinery and vehicles. All projects are eligible for this
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loan as long as they are directly related to the purchase of assets or business expansion.

• Export Credit: This loan helps businesses pay for pre-shipment, post shipment, and other
activities for your export business. The bank may offer the facility in Indian as well as foreign
currency depending on the needs of the borrower.

INSTABIZ APP

ICICI Bank had launched the InstaBiz app in July 2019 to allow MSMEs to access banking
products and services through the app or website. The latest update of the app to bring
MSMEs into the digital ecosystem and hassle-free services to the businesses. It reflects the
following features:

• Insta OD Plus – Users now have the freedom to avail a completely online and paperless
process for securing loans up to INR 25 lakhs
• Insta CA – Reducing the time for opening a bank account, Insta CA allows filling several fields
automatically and has enabled validation of Aadhar or PAN card number digitally. It has also
included Video KYC to be a part of the account opening process.
• Banking + - Allows for managing and growing the business with instant on boarding
• Merchant NTB – Allows a business to be instantly activated for collecting payment through
QR and PoS systems
• Trade Emerge – Acts as a digital platform to assist customers for cross border transactions
both as exporters and importers

The application will also help both customers and non-customers of the bank to avail mini
services including trade transactions and bank guarantee on the Trade Emerge Platform.
Additionally, the application will allow merchants, retailers and professionals to instantly
accept payments through UPI and cards.

OTHER INITIATIVES

The Bank also provides card-based products like credit cards and debit cards aimed exclusively
at SMEs. Some of the innovative solutions to the SMEs include forex services through the
internet, mobile banking services and card to card fund transfer etc.

The Bank has also taken a leading role in setting up a platform along with CNBCTV and CRISIL
for recognizing the spirit of entrepreneurship through Emerging India Awards. The Bank has a
regular feature in the mass media (including a magazine devoted to SMEs) bringing recognition
to highly successful SMEs and disseminating information on issues of interest to SMEs in the
respective sectors.

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RESEARCH METHODOLOGY

• The project is executed by gathering, collating and analyzing data through various
Secondary Data Sources. It involved carrying an internal and external secondary data
research by deploying proprietary information tools.
• Identification of Corporates with annual turnover between INR 2.5 and 250 Crores and
charge of INR 10-100 Crores was done using various research techniques, tools and
databases including Business Directories such as InsiderBiz, Instafinancials etc. with
the help on pin codes.
• The Corporates were shortlisted with the helpofProprietary Tools such as Probe42 which is
accessed by the ICICI Bank to conduct preliminary sanitary checks. Financial Statement
Analysis for a sound business identification was carried on which involved checking the
Annual Turnover of the organization which needs to be less than INR 250 Crores and
more than INR 2.5 Crores, Year-on-Year Growth (Revenue Growth %), Operating Profit
(EBITDA), Profit for the Period (Net Profit or Profit After Tax), Cash Conversion Cycle,
Liquidity & Solvency Ratios, Sum of charges and the open charges of the organization.
CRILC Checks for SMA Identification for the Private Entities also took place to condense
the leads and scope for the companies which can generate potential business
opportunities for the bank.
• Collaborated with the Relationship Managers and the ETRG team by passing on the
leads generated on a daily basis.
• Shortlisted Organizations were contacted and visited to gain insights about their
current financial working and loan requirements if any, and were educated how ICICI
Bank offers its SME customers a wide spectrum of solutions addressing their needs.

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PROJECT OUTCOMES, FINDINGS & RESULTS OBTAINED

• Created a database of more than 2500 corporate entities spread across Delhi NCR-3
Region; along with business information of the corporates. Database was built in sync
with the Priority Sector Lending guidelines issued by RBI.
• Filtered top corporates among the database on the basis of Annual Turnover of the
organization which needs to be less than INR 250 Crores and more than INR 2.5 Crores,
Year-on-Year Growth (Revenue Growth %), Operating Profit (EBITDA), Profit for the
Period (Net Profit or Profit After Tax), Cash Conversion Cycle, Liquidity & Solvency
Ratios, Sum of charges and the open charges of the organization. CRILC Checks for SMA
Identification for the Private Entities was also executed to scope the potential clients.
• Built a database of more than 350 entities with turnover ranging from INR 2.5 to 250
Cr. and Charges from INR 10-100 Cr. identified as potential business opportunities for
the Bank.
• The parameters on which the companies were eliminated included:
✓ Around 70% of the companies were eliminated because of their annual turnover
which was more than INR 250 Crores or less than INR 2.5 Crores
✓ Few of the companies identified were the existing clients of the ICICI Bank
✓ While executing the CRILC Checks for SMA Identification, few companies fell in the
category of SMA 2 or NPA (Non- performing Asset) and thus were eliminated as ICICI
deals with the companies which fall in the categories of SMA 0 or SMA 1
✓ The company’s operating profit was in negative figures (incurring losses)
• Collaborated with the Relationship Managers and the ETRG team by passing on the
leads generated on a daily basis.
• Worked closely with the Business Team for performing Due Diligence on potential
businesses.

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RECOMMENDATIONS

• BRANCH LOCATION: The client visits made me realize that the presence of a branch
inthe industrial area itself is of paramount importance as the companies find it
convenient to have their branch nearby. HDFC has the highest market share due to
the same reason.

• CUSTOMER SERVICE > CUSTOMER ACQUISITION: Providing good after sales service is
really important for word-of-mouth marketing. In two to three scenarios, I witnessed
that there were some issues on the part of the relationship managers which made the
customers unhappy. Having good relationship with existing customers will
automatically help acquire new ones.

• TECHNOLOGICAL ADVANCEMENT SUPPORT: A financial support in the form of a

lending product exclusively focused on technological upgradation/advancement for
SMEs can be introduced so as to enable SMEs reach new heights and perform
business activities effectively and efficiently.

• AUTOMATION SOLUTIONS: Solutions that deliver automation of financial operations

for efficient financial management can be provided to SMEs, something which is
being targeted by Neo Banks. ICICI Bank, being a major player can foray into this
direction by providing best in class financial solutions.

• REDUCE PAPERWORK: The amount of paperwork required as observed is huge. In

thisdigital era, the bank should focus on reducing it to as low as possible which will
be convenient to customers as well as the employees. Also, it will help the branches
achieve sustainable development goals which is the need of the hour.

• DIGITALIZATION: Digitalization is important in every aspect of a business. The

collection of documents from clients can be digitalized and collected in a document
that can be accessed by all departments to save time in the processing of loans &
credit.

CONCLUSION

The role MSME economic development of India cannot be overlooked. This sector is a small
segment but with the largest contribution. This sector is also the backbone of Banking
Industry. However, it is not only lending where the sector needs support. The MSMEs also
need a required push towards innovation and skill development to scale and cater to global
markets as well.

MSME is the backbone of the Indian economy. This sector has proven instrumental in the
growth of the nation, leveraging exports, creating huge employment opportunities for the
unskilled, fresh graduates, and the underemployed. It also extended the opportunities to
banks for giving more credit to enterprises to the MSME Sector.
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The government should take special care by addressing the importance of MSME in terms
of providing more and more MSME Registration advantages by implementing better
regulations and enabling financial institutions to lend more credit at less interest rate for
sustainability of this sector.

Banks have a vital role to play in addressing several problems faced by the sector today.
Banks have to view themselves not just as providers of credit but as partners in the growth
of these enterprises, through a process of hand holding of first-generation entrepreneurs,
while they find their feet in the business, the Banks and other agencies should take pride
while servicing the MSMEs as they are playing an instrumental role in the formation of
MNCs of tomorrow.

SME lending is an incredible growth opportunity for banks and the right technology could
help ICICI Bank to serve a wider range of SMEs through strengthening digital capabilities for
cost efficiency, process efficiency and customer experience enhancement. A combination
of physical and digital channels enabling seamless delivery and a streamlined process will
aid the bank in harnessing the opportunities in the SME Sector.

InstaBiz Application launched by the ICICI Bank is a step in the right direction as it provides:
Enhanced banking services for existing customers, a bouquet of banking services to MSMEs,
who are customers of other banks and a whole range of value-added services for all.

The MSME sector of India is today at the gateway of global growth on the strength of
competitive and quality product range.

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