Qwertyuiopasdfghjklzxcvbn

mqwertyuiopasdfghjklzxcvb
nmqwertyuiopasdfghjklzxcv
bnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzx
cvbnmqwertyuiopasdfghjklz
xcvbnmqwertyuiopasdfghjkl
zxcvbnmqwertyuiopasdfghj
klzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdf
ghjklzxcvbn
ertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnm
qwertyuiopasdfghjklzxcvbn
mqwertyuiopasdfghjklzxcvb
nmqwertyuiopasdfghjklzxcv
bnmrtyuiopasdfghjklzxcvbn
SME unding ! Study
of an "ndian
Entrepreneur
Group # 05
TYBMS
G.N Khalsa college
1/27/2012
Group Members:
1.Purna Kaur Arora 02
2.Tejal Kaur Arora 04
3.Shradha Dherange 0
4.Salon! "a!n 1#
$.%ash Tha&&ar 2'
#.Pra(ee& Palahe 21
)T*pe (he abs(ra+( o, (he do+umen( here. The abs(ra+( !s (*p!+all* a shor( summar* o,
(he +on(en(s o, (he do+umen(. T*pe (he abs(ra+( o, (he do+umen( here. The abs(ra+( !s
(*p!+all* a shor( summar* o, (he +on(en(s o, (he do+umen(.-
A+&no.ledgemen(:
/e (a&e (h!s oppor(un!(* (o e0press our
gra(!(ude (o all (hose .!(hou( .hose
en+ouragemen( (h!s proje+( .ould no( ha1e
seen l!gh(.
/e are (han&,ul (o all peers and adul(s ,or
(he!r ad1!+e2 sugges(!ons and gu!dan+e.
/e (han& Pro,. %ogesh Kolha(&ar ,or g!1!ng
us an oppor(un!(* (o .or& on (h!s proje+(.
INTRODUCTION TO SMES
Small and Medium Enterprises (SMEs) have played a signifcant role
world over in the economic development of various countries. Over a
period of time, it has been proved that SMEs are dynamic, innovative
and most importantly, the employer of frst resort to millions of people
in the country. The sector is a breeding ground for entrepreneurship.
The importance of SME sector is well-recognized world over owing to
its signifcant 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. Small and medium-sized
enterprises (SMEs) are the backbone of all economies and are a key
source of economic growth, dynamism and fexibility in advanced
industrialized countries, as well as in emerging and developing
economies. SMEs constitute the dominant form of business
organization, accounting for over 95% and up to 99% of enterprises
depending on the country. They are responsible for between 60-70%
net job creations in Developing countries. Small businesses are
particularly important for bringing innovative products or techniques
to the market. Microsoft may be a software giant today, but it started
of in typical SME fashion, as a dream developed by a young student
with the help of family and friends. Only when Bill Gates and his
colleagues had a saleable product were they able to take it to the
marketplace and look for investment from more traditional sources.
SMEs are vital for economic growth and development in both
industrialized and developing countries, by playing a key role in
creating new jobs. Financing is necessary to help them set up and
expand their operations, develop new products, and invest in new staf
or production facilities. Many small businesses start out as an idea
from one or two people, who invest their own money and probably turn
to family and friends for fnancial help in return for a share in the
business. But if they are successful, there comes a time for all
developing SMEs when they need new investment to expand or
innovate further. That is where they often run into problems, because
they fnd it much harder than larger businesses to obtain fnancing
from banks, capital markets or other suppliers of credit.

COMMON CHARACTERISTICS OF SMES:
(a)Born out of individual initiatives & skills
SME startups tend to evolve along a single entrepreneur or a small
group of entrepreneurs; in many cases; leveraging n a skill set. There
are others setup purely as a means of earning livelihood.
(b)Greater operational fexibility
The direct involvement of owner(s), coupled with fat
hierarchical structures and less number of people ensure that
there is greater operational fexibility. Decision making such as
changes in price mix or product mix in response to market conditions
is faster.
(c)Low cost of production
SMEs have lower overheads. This translates to lower cost
of production, least up to limited volumes.
(d)High capacity to innovate export:
SMEs skill in innovation, improvisation and reverse engineering are
legendary. By being able to meet niche requirements, they are
also able to capture export markets where volumes are not
huge.
(e)High employment orientation:
SMEs are usually the prime drives of jobs, in some cases creating up
to 80%. Jobs SMEs tend to be labour intensive per se and are
able to generate more jobs for every unit of investment, compared
to their bigger counterparts.
(g) Reduction of regional imbalances
Unlike large industries where divisibility of operations is more difcult,
SMEs enjoy the fexibility of location. Thus, any country,
SMEs can be found spread virtually right across, even though
some specifc location s emerge as clusters.
SMEs in India:
India has a vibrant SME sector that plays an important
role in sustaining economic growth, increasing trade,
generating employment and creating new entrepreneurship in
India.
In keeping in view its importance, the promotion and
development of SMEs has been an important plank in our
policy for industrial development and a well-structured program
of support has been pursued in successive fve-year plans for. SMEs in
India have recorded a sustained growth during last fve decades.
The number of SMEs in India is estimated to be around13 million
while the estimated employment provided by this
sector is over 31 million. The SME sector accounts for
about 45 per cent of the manufacturing output and over 40 per
cent of the national exports of the country.
Figure 1.1SMEs In India
DEVELOPMENT OF SMES IN INDIA :
SME has emerged into prominent sector in Indian economy in
general and industry in particular. SSI sector in India has
posted impressive growth in 1990's from 15% in1991-92 to
55% in 2001-02.The growth in employment generation has been
equally impressive from 3% to 45% during the same period.
Employment in SME touched 19million, just behind agriculture. Share
of SSI exports crosses 40% of total exports.
Growth by itself in SME sector is impressive enough indicating
a positiveresponse to the Economic Reform process initiated in the
country since 1991.
--- Development of infrastructure
--- Availability of Cheap Credit
---Concessionary Taxes and Tarifs
--- Financial subsidies
--- Equity contributions are all the protective measures for the sector
--- Assured supply of Raw Materials.
The Long-Term Finance may be Raised by the Companies
from the following Sources:-
Capital market :
Capital market denotes an arrangement whereby transactions
involving the procurement and supply of long-term funds take
place among individuals and various organizations. In the capital
market, the companies raise funds by issuing shares and
debentures of diferent types. When long-term capital is initially
raised by new companies or by existing companies by issuing
additional shares or debentures, the transactions are said to take
place in the market for new capital called, as 'New Issue Market'.
But, buying and selling of shares and debentures already issued
by companies takes place in another type of market called as 'the
Stock market'.
Special Financial Institutions:
A large number of fnancial institutions have been established in
India for providing long-term fnancial assistance to industrial
enterprises. There are many all-India institutions like Industrial
Finance Corporation of India (IFCI); Industrial Credit and
Investment Corporation of India (ICICI); Industrial Development
Bank of India(IDBI), etc. At the State level, there are State
Financial Corporations (SFCs) and State Industrial Development
Corporations (SIDCs). These national and state level institutions
are known as 'Development Banks'. Besides the development
banks, there are several other institutions called as 'Investment
Companies' or 'Investment Trusts' which subscribe to the shares
and debentures ofered to the public by companies. These
include the Life Insurance Corporation of India (LIC); General
Insurance Corporation of India (GIC); Unit Trust of India (UTI),
etc.
Leasing companies :
Manufacturing companies can secure long-term funds from
leasing companies. For this purpose a lease agreement is made
whereby plant, machinery and fxed assets may be purchased by
the leasing company and allowed to be used by the
manufacturing concern for a specifed period on payment of an
annual rental. At the end of the period the manufacturing
company may have the option of purchasing the asset at a
reduced price. The lease rent includes an element of interest
besides expenses and profts of the leasing company.
Foreign companies :
Funds can also be collected from foreign sources, which usually
consists of:-
Foreign Collaborators:- If approved by the Government of India,
the Indian companies may secure capital from abroad through the
subscription of foreign collaborator to their share capital or by way of
supply of technical knowledge, patents, drawings and designs of plants
or supply of machinery.
International Financial Institutions:- like World Bank and
International Finance Corporation (IFC) provide long-term funds for the
industrial development all over the world. The World Bank grants loans
only to the Governments of member countries or private enterprises
with guarantee of the concerned Government. IFC was set up to assist
the private undertakings without the guarantee of the member
countries. It also provides them risk capital.
Non-Resident Indians:- persons of Indian origin and nationality
living abroad are also permitted to subscribe to the shares and
debentures issued by the companies in India.
Retained Profts or Reinvestment of Profts:
An important source of long-term fnance for ongoing proftable
companies is the amount of proft which is accumulated as general
reserve from year to year. To the extent profts are not distributed as
dividend to the shareholders, the retained amount can be reinvested
for expansion or diversifcation of business activities. Retained proft is
an internal source of fnance. Hence it does not involve any cost of
foatation which has to be incurred to raise fnance from external
sources.
Short-Term Finance may be Raised by the Companies from
the following Sources:-
Trade Credit:
It is the credit which the frms get from its suppliers. It does not make
available the funds in cash, but it facilitates the purchase of supplies
without immediate payment. No interest is payable on the trade
credits. The period of trade credit depends upon the nature of
product, location of the customer, degree of competition in the
market, fnancial resources of the suppliers and the eagerness of
suppliers to sell his stocks.
Installment Credit:
Firms may get credit from equipment suppliers. The supplier may
allow the purchase of equipment with payments extended over a
period of 12 months or more. Some portion of the cost price of the
asset is paid at the time of delivery and the balance is paid in a
number of installments. The supplier charges interest on the
installment credit which is included in the amount of installment.
The ownership of the equipment remains with the supplier until all
the installments have been paid by the buyer.
Accounts Receivable Financing:
Under it, the accounts receivable of a business concern are
purchased by a fnancing company or money is advanced on security
of accounts receivable. The fnance companies usually make
advances up to 60 per cent of the value of the accounts receivable
pledged. The debtors of the business concern make payment to it
which in turn forwards to the fnance company.
Customer Advance:
Manufacturers of goods may insist the customers to make a part of
the payment in advance, particularly in cases of special order or big
orders. The customer advance represents a part of the price of the
products that have been ordered by the customer and which will be
delivered at a later date.
Bank Credit:
Loans:- When a bank makes an advance in lump sum, the
whole of which is withdrawn to cash immediately by the
borrower who undertakes to repay it in one single installment, it
is called a loan. The borrower is required to pay the interest on
the whole amount.
Cash credit:- It is the most popular method of fnancing by
commercial banks. When a borrower is allowed to borrow up to
a certain limit against the security of tangible assets or
guarantees, it is known as secured credit but if the cash credit
is not backed by any security, it is known as clean cash credit.
In case of clean cash credit the borrower gives a promissory note
which is signed by two or more sureties. The borrower has to
pay interest only on the amount actually utilized.
Overdrafts:- Under this, the commercial bank allows its
customer to overdraw his current account so that it shows the
debit balance. The customer is charged interest on the account
actually overdrawn and not on the limit sanctioned.
Discounting of bills:- Commercial banks fnance the business
concern by discounting their credit instruments like bills of
exchange, promissory notes and hundies. These documents are
discounted by the bank at a price lower than their face value.
PROBLEMS OF SMES:
SME sector faces a number of problems - absence of adequate
and timely banking fnance, limited knowledge and non-availability of
suitable technology, low production capacity, follow up with various
agencies in solving regular activities and lack of interaction with
government agencies on various matters. Some of the major problems
are briefy as follows:
a)Financial problems of SMEs:
The fnancial problem of SMEs is the Root Cause for all the other
problems faced by the SME sector. The small and medium
industrialists are generally poor and there are no facilities
for cheap credit. They fall into the clutches of money lender who
charges very high rates of interest, or else they borrow from the
dealers of their goods, who exploit them by completing
them to sell their products at very low price. After
the nationalization of 14 major Indian Banks in July,
1969, the Commercial banks were providing only a small
proportion of SMEs fnancial requirements. Credit to the SME
sector continues to be non-commensurate with its contribution
to the total industrial output. As against the share of the village and
SME at 40% in the industrial output, its share in total credit to the
industrial sector is only about 30%.
b) Raw Material problem of SMEs:
This difculty is experienced in a very pronounced form. The
quantity,quality andregularity of the supply of raw materials ar
e not satisfactory. There are noquantity discounts, since they ar
e purchased in small quantities and hencecharged, higher prices
by suppliers. Difculty is also experienced in procuring semi-
manufactured materials. Financial weakness stands in the way of
securing raw materialism bulk in a competitive market.

c)Technological problem of SMEs:
Today technology is changing at a very fast phase; it becomes difcult
for SMEs to cope up with changing technology. Technology up
gradation and the frequent need to renew the equipment has
emerged as a big problem.
d) Marketing problem of SMEs:
As marketing is not properly organized,helpless artisans are
completely at the mercy of middle man. The potential demand for their
goods remains under developed. SMEs cannot aford to spend lavishly
for advertisement to promote their sales.
e) Managerial problem of SMEs:
The in efciency in management comes frst among managerial proble
ms.The entrepreneurial ability of promoters of cottage industrie
s and SMEs are handicapped by technical knowhow in the areas
of production, fnance, accounting and marketing management.
f) Sickness of SMEs:
A serious problem which is hampering small and medium
sector has been sickness. Many small units have fallen sick due
to one problem or the other. Sickness is caused due to
both Internal and external factors. From among the various inte
rnaland external causes of sickness the important ones are bud
management,high rate of capital gearing, inadequacy of fnance, short
of raw materials, outdated plant and machinery, low labor productivity
etc.
NEED OF THE HOUR:
The need of the hour for Indian SMEs is to upgrade their
technology, The availability of adequate credit at afordable
cost, thus, becomes critical for Indian SMEs. SIDBI is the
national level principal fnancial institution
for promotion, fnancing and development of SMEs.
To empower the SME Sector to take its rightful place as the
growth engine of Indian economy, it is necessary to support
the SMEs, educate and empower them to make optimum
utilization of the resources, both human and economic, to achieve
success.
To encourage the growth of small scale industries in India,
Government has reserved certain products for manufacture in the
small scale sector in areas where there is techno-
economic justifcation for such an approach. Large/M
edium units can, however, manufacture such reserved items
provided they undertake to export 50% or more of
their production. As on 10 October 2008, following ite
ms are reserved for exclusivemanufacture by micro and small
enterprise sector:
Food and Allied Industries:
Pickles & Chutneys, Bread, Mustard Oil (except solvent
extracted), Ground nut oil (except solvent extracted).
Wood and Wood Products:
Wooden furniture and fxtures
Paper Products:
Exercise books and registers
Injection Moulding Thermo Plastic Product:
PVC Pipes, including conduits upto 110 mm dia, Fittings for
PVC pipes
Other Chemicals & Chemical Products:
Wax candles, Laundry soap, Safety matches, Fire works,
Agarbatties
Glass & Ceramics:
Glass Bangles
Mechanical Engg. Excluding Transport Equipment:
Steel almirah, Rolling shutters, Steel chairs all types, Steel
tables all other types, Steel furniture all other types,
Padlocks, Stainless steel utensils, Domestic utensils Aluminium
SME FINANCING:
SME Finance is the funding of small and medium sized
enterprises and represents a major function of the general
business fnance market in which capital for frms of types is
supplied, acquired, and costed/priced. Capital is supplied
through the business fnance market in the form of bank
loans and overdrafts; leasing and hire-purchase
arrangements; equity/corporate bond issues; venture capital
or private equity; and asset- based fnance such as factoring and
invoice discounting.
Importance:
The economic and social importance of SME
sector is well recognized in academic and policy literature. It is
also recognized that these actors in the economy may be
underserved, especially in terms of fnance. This has led to
signifcant debate on the best methods to serve this sector.
Collateral based lending ofered by traditional banks and fnance
companies is usually made up of a combination of asset-based
fnance, contribution based fnance, and factoring based fnance,
using reliable debtors or contracts.
Information based lending usually incorporates fnancial statement
lending, credit scoring, and relationship lending.
Viability based fnancing is especially associated with venture capital.

There is also a more favorable environment now with the Govt.
committed to give fllip to this sector through infrastructure
development; skill set development/entrepreneurship development,
technology up gradation etc. With the deregulation of the fnancial
sector, the general ability of the banks to service the credit
requirements of the SME sector depends on the underlying
transaction costs, efcient recovery processes and available
security. There is an immediate need for the banks
generally to focus on credit and fnance requirements of
SMEs. Although the banks are allowed to fx their own
targetsfor funding SMEs in order to achieve a minimu
m 20% year-on-year growth, theGovernments objective is to
double the fow of credit to the SME sector from Rs.67,600crore in
2004-05 to Rs.1,35,200 crores by 2009-10 i.e. within a period
of 5 years. Credit risk in the SME sector is widely dispersed
and Banks get better yield from
SMEadvances as against the traditional advances where th
e spread is getting graduallyreduced. The SME clientele base
could also be utilized by the Branches to step-up cross selling of
various other products including technology-enabled products.
PROBLEMS OF SMES FINANCING:
The main problem faced by SMEs when trying to obtain funding is
that of uncertainty.
SMEs rarely have a long history or successful track record that
potential investors can rely on in making an investment;
Larger companies (particularly those quoted on a stock
exchange) are required to prepare and publish much more
detailed fnancial information which can actually assist the fnance-
raising process;
Banks are particularly nervous of smaller businesses
due to a perception that they represent a greater credit risk.
Because the information is not available in other ways, SMEs
will have to provide it when they seek fnance. They will
need to give a business plan, list of the company assets,
details of the experience of directors and managers and demonstrate
how they can give providers of fnance some security for amounts
provided. Prospective lenders usually banks will then make a
decision based on the information provided. The terms of the loan
(interest rate, term, security, and repayment details) will
depend on the risk involved and the lender will also want to monitor
their investment. A common problem is often that the banks will be
unwilling to increase loan funding without an increase in the
security given. A particular problem of uncertainty relates to
businesses with a low asset base. These are companies without
substantial tangible assets which can be used to provide
security for lenders. When an SME is not growing
signifcantly, fnancing may not be a major problem.
However, the fnancing problem becomes very important when a
company is growing rapidly, for example when contemplating
investment in capital equipment or an acquisition. Few growing
companies are able to fnance their expansion plans from cash fow
alone. They will therefore need to consider raising fnance
from other external sources. In addition, managers who are
looking to buy-in to a business ("management buy-in" or "MBI")
or buy-out (management buy-out" or "MBO") a business from its
owners may not have the resources to acquire the
company. They will need to raise fnance to achieve their
objective.
ROLE OF PUBLIC SECTOR BANKS IN SME FINANCING:
Banks are playing a major role in fnancing SMEs in India. Nearly 82%
of the total SME fnancing in year 2006-07 is through banks. And
among them the major share is of public sector banks i.e. 57%. Thus
it is clear that the most common source of fnance for SMEs is Bank
Financing. There are no. of banks that help in assisting the
SMEs for fnancing.
The main channel used by the SMEs via Banks is Specialized
loans by various Banks. The Main reason for choosing bank loans by
SMEs compared to other sources of fnancing like venture capital,
PE funding etc is that is only interest to be paid no stake is to
be diluted thus the whole command of the SME is with the owner
only. There area number of Private as well as Public sector banks who
assist SME in Financing.
The role of Banks, in general, has become very important in the above
context The SME sectors demands were comprehensively taken care of
by the Public sector Banks through several initiatives such as:
Single Window dispensation,
Quick decision with least Turnaround Time through specially
constituted SME Cells, and above all,
Better service. Cluster-based Schemes are also on the list of the
Banks initiatives. The Bank prioritized the following more
particularly:-
Provision of timely and adequate credit to the SMEs,
Encouraging Technology Up gradation, for better quality and
competitiveness of their product(s), and
Proactively detecting sick and viable units in time so as to nurse
them back to health through appropriate re-structuring.
Financing of Clusters with adequate and concessional Bank
fnance on liberal terms in several pockets for specifed activities
concentrated in these pockets, which would result in reducing
transaction cost and greater economies of scale.
Some Public sector Banks ofering SME fnancing schemes are as
follows:
State Bank of India
State Bank of India has been playing a vital role in the
development of small scale industries since 1956.The Bank has
fnanced over 8 lakhs SSI units in the country. It has55 specialized
SSI branches, 99 branches in industrial estates and more than 400
branches with SIB divisions
The Bank fnances for Small Business activities which are of special
signifcance to a large number of people as many of these
activities can be started with relatively lower investment and
with no special skills on the part of the entrepreneurs. The
following are the SME products ofered by State Bank Of India:
Commodity Packed Warehouse Receipt Financing
Traders Easy Loan Scheme
SSI Loans
Business Current Accounts
Open Term Loan
Retail Trade
Doctor Plus
SBI Shoppe
Cyber Plus
SME Credit Plus
Small Business Credit Card
SME Petro Credit
Dal Mill Plus
IDBI Bank
IDBI Bank has been actively engaged in providing a major
thrust to fnancing of SMEs. With a view to improving the credit
delivery mechanism and shorten the Turn around Time (TAT),
IDBI Bank has developed a special business model to serve the
SMEs in India. The Bank has set up 24 City SME Centres (CSCs)
across India in Mumbai, Delhi,26

Kolkata, Chennai, Bangalore, Hyderabad, Pune to name a
few. These CSCs are the Bank's hubs while dedicated SME desks
have been set up in several branches across these cities. These
branches serve as front ofces for sales delivery and customer
service. IDBI Bank has a wide variety of products and services
catering to the needs of diferent segments within small business.
Long years of experience in being the trusted partner of large and
mid corporates has translated into deeper understanding of
needs of business and industries. The Bank has parameterized
products for transporters, dealers, traders, and vendors. In
addition, it has a separate Transaction Banking Group that has
expertise in products like cash management services, letter of credit,
bank guarantees and treasury products
IDBI Bank provides following SME products:
SulabhVyapar Loan
Dealer Finance
Funding Under CGFMSE
Direct Credit Scheme-SIDBI
Preferred Customer Scheme
Vendor Financing Programme
Lending against the security of future Credit Card Receivables
Working Capital Financing
Finance to Medical Practitioner
SME Hosiery Special Current Account
Bank of Baroda
Bank of Baroda started its operation in the year 1908 in
Baroda. Its mission is"to be a top ranking National
Bank of International Standards committed to augment stake
holders' value through concern, care and competence. Bank of
Baroda ofers following SME products and services

Baroda Vidyasthali Loan
Baroda Arogyadham Loan
Baroda LaghuUdhyami Credit Card
Baroda Artisans Credit Card
Technology Upgradation scheme
SME short term loans
SME medium term loans
Composite Loans
Canara Bank
Canara Bank was founded by Shri Ammembal Subba Rao
Pai, a great visionary and philanthropist, in July 1906, at
Mangalore, then a small port in Karnataka.
The Bank has adopted a Policy for lending to SME sector, in
tune with Govt. of India guidelines as per MSMED Act,
2006, which has come into force w.e.f. 2ndOctober,2006.
LOAN PRODUCTS
Schemes for Capital Investment
Term loan for acquisition of fxed assets
Standby credit for capital expenditure
Standby term loan scheme for Apparel Exporters
Loan scheme for reimbursement of investment made in fxed
assets by SMEs
Soft loan scheme for Solar Water Heaters
Scheme for Energy Savings for SMEs
Technology Upgradation Fund scheme (TUFS) for textile & jute
industries in SME sector
Credit linked capital subsidy scheme (CLCSS)
Loans under Interest Subsidy Eligibility Certifcate (ISEC)
Scheme of Khadi& Village Industries Commission (KVIC) to
eligible institutions.
Schemes for Working Capital
Simplifed Open Cash Credit (SOCC)
Open Cash Credit (OCC)
Micro fnancing joint liability groups (Handlo
om weaver & Agarbathi manufacturer groups)
Laghu Udhyami Credit Card (LUCC)
Bill of Exchange discounting facility to Small Entrepreneurs at
concessional rate of interest (BE-SE)
NABARD - SME INITIATIVES
NABARD is an apex development bank established for facilitating
credit fow for promotion and development of agriculture, small-scale
industries, cottage and village industries, handicrafts and other rural
crafts.
NABARD had selected fve cluster and 50 additional clusters for
intensive development and has partnered with other government
agencies to promote rural industrialisation, to strengthen existing
clusters and to develop new clusters in FY06. Further, during FY08,
the cluster development programme was extended to 19 clusters, that
is, 17 clusters under participatory mode and 2 under intensive mode,
which took the total number of clusters adopted under this
programme to 61 (56 in partnership and 5 under intensive mode) as
at end March 2008.
Realising the growth potential of SMEs, many banks have started
ofering products and services to this segment as highlighted in this
chapter. Moreover, the SMEs have to ofer more growth opportunities
due to globalisation; however, this growth strongly depends on the
SMEs ability to scale-up their capacity and embrace new technology,
which is a major hurdle in present times. The banks can help them
overcome such hurdles and cater to them through innovative
products and services.

In this regard the fnancing needs of small and medium enterprises
have drawn the attention of several fnancial institutions. The National
Bank for Agriculture and Rural Development (NABARD) has emerged
as a pioneer in the feld of micro fnance, thereby ensuring fnancial
inclusion for more than 5.8 crore poor households within its fold.
Dr. K G Karmakar, Managing Director, NABARD says, NABARD's role
in the growth of the micro fnance model has been multi-dimensional,
i.e. policy-formulation, fnancial innovations, technological
interventions, and institutional strengthening. Emphasis has been on
improving the access of the rural poor to integrated micro fnance
services covering both savings and credit, rather than providing just
micro credit facilities. This entails improving access of the poor to
micro-fnance in a sustainable manner rather than to ofer credit in
the form of subsidies.
In order to improve access of the poor to formal banking, NABARD
launched Self help Group (SHG) Bank linkage model in 1992. Under
this scheme the poor form small groups and are encouraged to pool
their savings regularly. These savings are then used to make small
interest bearing loans to the members. Bank credit follows this stage.
NABARD has initiated several measures for the healthy growth of the
SHG linkage programme viz.- developing a conducive policy framework
through the provision of opening Saving Bank Accounts in the names
of SHGs and relaxation of collateral norms, simple documentation and
delegation of all credit decisions to SHGs; training and awareness
building among the stakeholders; mainstreaming the SHG Linkage
Programme as part of corporate planning and normal business activity
of banks; encouraging Regional Rural Banks and Co-operative banks
to act as SHGs promoting institutions; setting up a micro-fnance
development and equity fund in NABARD for meeting the promotional
costs of up scaling the micro-fnance interventions; dissemination of
information through seminars, workshops and media and to provide
support to NGOs for promotion of SHGs.
The SHG Bank linkage programme has reportedly helped the rural
sector to avail of credit facilities to set up small enterprises and even to
elevate their standard of living. A study conducted in Karnataka
showed that income levels per SHG member had increased
substantially over a period of three years. A recent study In Tamil
Nadu revealed that participation in credit and savings programmes
has enabled several families to send their children to school. The SHG
movement has ushered in women's empowerment and has helped
reduce child mortality, improve maternal health and has enabled the
poor to fght diseases due to better nutrition, housing and health.
he most valuable impact of the linkage programme is that it has
brought about positive changes in the attitudes of banks towards
microcredit. The lending procedures in SHGs require branch managers
to attend group meetings, interact with members and then fnalize his
lending opinion rather than spending more time in evaluating loan
documents backing the application for loans.
Another landmark has been the increasing expenditure on production
purposes and development of socially backward sections. This has led
to elevation of living standards of many households.
Moving towards a sound micro-fnancial sector is a big challenge for
the fnancial system of the country. The main task is not to provide
new institutions but to improve the access of the poor to the existing
banking network. This requires the design of new products and
delivery mechanisms. NABARD has been propagating and facilitating
the growth of the SHG linkage programme. However several challenges
still lay ahead: there is a need to check the uneven spread of the SHG-
Bank linkage programme in all parts of the country. NABARD has
initiated a three years Pilot Project in nine districts across nine
states in order to promote livelihood creation and employment
opportunities besides imparting relevant skills and development of
risk-taking abilities in the members of SHGs. NABARD has also
initiated Pilot Projects on technological interventions in rural areas,
such as, processor cards, e-grama, social security system for SHG
members.
Acknowledging the fact that microfnance has immense potential in
the country the Government/RBI has directed all commercial banks
and RRBs to add at least 250 rural households every year at each of
their rural and semi urban branches in order to move rapidly towards
the goal of fnancial inclusion. Let us hope other banks will follow the
example of NABARD and aid the economic development of the
backward sector.
RELIANCE ENTERS MICROFINANCE MARKET
Reliance Capital has launched its microfnance initiative with tie-ups
for two states, which would be followed by a national rollout soon.
Reliance Capital is slated to join hands with two Gujarat-based
microfnance institutions- MAS Financial services Ltd. and Vardan
Trust- as part of its initiative to enhance penetration of microfnance
in the country. Reliance Capital plans to fund MFIs in Gujarat and
Maharashtra in the frst phase, and subsequently have a national
presence.

MICRO FINANCE NOT NEW TO SBI
Micro fnance is not new to State Bank of India. The bank's
association with non-government organizations (NGOs) or voluntary
agencies in extending fnancial help can be traced as far back as 1976
well before NABARD introduced SHG-Bank Credit Linkage Programme
as a pilot project in 1992.

SHG-BANK CREDIT LINKAGE PROGRAMME
SBI has actively participated in SHG-Bank Credit Linkage programme
since its inception in 1992 as a pilot project of NABARD. Since then
the Bank has made a steady progress in fnancing SHGs.
SBI is maintaining its position as a leader among Commercial Banks
in credit linking of SHGs and is a prime driver for the movement. The
bank has successfully initiated various measures toward widening its
SHG network and has started to leverage the vast SHG network for
various services.
SIDBI SME OVERVIEW
Established in 1990, SIDBI is the principal fnancial institution that
is engaged in promotion, fnancing and development of SMEs. It also
coordinates functions of other institutions engaged in SME lending.
SIDBI provides fnancial assistance to small scale sector under
various categories, namely refnance assistance to primary lending
institutions (PLIs), indirect equity assistance, direct assistance, and
promotional and developmental assistance.
The range of products and services ofered by SIDBI for SMEs are
direct fnance, bills fnance, refnance, international fnance, micro
fnance and fxed deposit schemes. It also provides government
subsidy schemes to the SMEs in textile, leather and food processing
industries.
Further, SIDBI also acts as a nodal agency for implementing the
governments various schemes like Technology Up gradation Fund
Scheme for the textile industry (TUFS), Scheme of Technology Up
gradation/Setting up/Modernization/Expansion of food processing
industries, Integrated Development of Leather Sector Scheme (IDLSS)
etc.
SME Financing and Development Project (SMEFDP)
SIDBI is an implementing agency of the SME Financing and
Development Project (SMEFDP), which is a World Bank-led multi-
agency/ multi-activity project for fnancing and developing SMEs. The
project was introduced with an objective to attend to demand and
supply-side issues of MSMEs through fnancial and non-fnancial
services. The Department of Financial Services, Ministry of Finance,
is the nodal agency and World Bank, DFID, UK; KfW, Germany, and
GTZ, Germany are the international partners for the project.
Key Highlights
The entire credit allocation was utilised to beneft 927 MSMEs
The BDS market was developed by strengthening both the
supply-side (BDS providers) and demand side (sensitisation and
demand articulation of MSMEs)
Extended capacity building support was provided to SMERA for
scaling up exclusive rating of MSMEs and to CIBIL for setting up
SME Commercial Bureau.
Apart from this, SIDBI has set up various institutions for development
and fnancing of SMEs, namely
Credit Guarantee Fund Trust for Micro & Small Enterprises
(CGTMSE)
SIDBI Venture Capital Ltd (SVCL)
India SME Technology Services Ltd (ISTSL)
SME Rating Agency of India Ltd (SMERA)
CONCLUSION
Over a period of time, it has been proved that SMEs are
dynamic, innovative and most importantly, the employer of frst
resort to millions of people in the country. India
has avibrant SME sector that plays an important role i
n sustaining economic growth, increasing trade, generating
employment and creating new entrepreneurship in India. But the
SME sector faces a lot of obstacles in obtaining adequate
fnance. Government of India has started a number of SME
fnancing schemes in its public sector banks .These public sector
banks are playing a major role in the development of SME sector in
India. But due to few obstacles, these schemes are not as
efective as they should be.
The major fndings of the study were that bank fnancing is the
most popular source for fnancing SMEs in India. The SME fnancing
schemes provide credit to this sector at low rates of interest
and at attractive conditions but the
procedureinvolved is lengthy. Moreover, too much of docu
mentationis required .Insuf cientcollateral and biasness
are also the major problems. The reorientation program,
workshops and seminars should be organized at district level to
provide latest information to the SMEs about the various SME
fnancing schemes of the public sector banks.
VIJAY MALLYA
Vijay Mallya born 18 December 1955 is an Indian liquor and airline
baron. The son of industrialist Vittal Mallya, he is the chairman of the
United Breweries Group and Kingfsher Airlines. His United Spirits is
world's second largest liquor maker, by volume. Mallya is also an MP
in the Indian Rajya Sabha.
He also co-owns the Formula One team Force India, the Indian
Premier League team Bangalore Royal Challengers, and the I-League
team East Bengal FC.
According to Forbes, his personal wealth is estimated to be $1.4
billion. Mallya receives substantial press coverage that focuses on his
lavish parties, villas, automobiles, Force India, Royal Challengers
Bangalore and his yacht, the Indian Empress
PROFILE:
Vijay Mallya's Birth Date : December 18, 1955 (age 54)
Vijay Mallya's Full Name : Vijay Mallya
Vijay Mallya's Birth Place : Bantwal, Karnataka, India
Vijay Mallya's Net worth : US$1.2 billion
Vijay Mallya's Religion : Hinduism
Vijay Mallya's Zodiac Sign : Sagittarius
Vijay Mallya's Gender : Male
Vijay Mallya's Nationality : Indian
Vijay Mallya's Profession : Businessman, Industrialist
Vijay Mallya's Career Debut : Mallya took over as Chairman of the
United Breweries Group in 1983
Vijay Mallya's Address : 333 Technology Drive Canonsburg,
Pennsylvania 15317 United States
Vijay Mallya's Education : La Martiniere Boys' College, Calcutta in
Kolkata.
Vijay Mallya's PhD : University of Southern California
Vijay Mallya's Doctorate : University of Southern California
Vijay Mallya's Father Name : Vittal Mallya
Vijay Mallya's Mother Name : Shrimati Lalitha Mallya
Vijay Mallya's Wife Name : Rekha
Vijay Mallya's Son Name : Sidhartha Vijay Mallya
Vijay Mallya's Daughter Name : Leana Mallya
Vijay Mallya's Daughter Name : Tanya Mallya
Vijay Mallya's Countries Visited : U.S.A., France, Germany, U.K., Italy,
Switzerland, Russia, South Africa, Singapore, U.A.E. and Hong Kong.
Vijay Mallya's Career : Rajya Sabha M.P.
Chairman- United Breweries Group
Kingfsher Airlines
Force India
Royal Challengers Bangalore
United Racing and Bloodstock Breeders
Vijay Mallya's Occupation : Chairman of : United Breweries Group,
Kingfsher Airlines, Force India F1 Team, Royal Challengers Bangalore,
East Bengal FC, URBB
Vijay Mallya's Sports, Clubs, Favourite Pastimes and Recreation :
Keen sportsman and an ardent aviator and yachtsman of distinction;
has won trophies on the professional car racing circuits; participates
in and also supports various sporting events worldwide, particularly
for the underprivileged
Vijay Mallya's Political career :
Mr. Mallya is a MP in Rajya Sabha. He entered politics in 2000 and
replaced Subramanian Swamy as the president of the Janata Party,
his party contested for almost 224 seats during the Karnataka State
legislative election, but the result of the election didnt see the light of
success, he couldnt able to win a single seat.
Vijay Mallya's Social and Cultural Activities and other Special Interests
: Founded the Vittal Mallya Scientifc Research Foundation, Bangalore;
co-promoted the Mallya-Aditi International School, Bangalore;
established the Mallya Super Speciality Hospital, Bangalore.

VIJAY MALLYA THE FLAMBOYANT

Vijay Mallya, the famboyant CEO of United Breweries the company
that owns the Kingfsher brand is one of the most famboyant CEOs
in Asia. Vijay Mallya believes in leading his brand from the front by
leveraging his personality.
Vijay Mallya has built a reputation for splurging his money in the
public. He is the key sponsor to many of Indias top derby
championships, he owns a yacht once owned by Elizabeth Taylor, fies
a personal Boeing business jet, owns super stylish homes in London,
US, Dubai and India. Vijay Mallya is a diehard party animal, and is
seen as the personifcation of a luxurious life!

Vijay Mallyas associations with the rich, trendy and the luxurious
have rubbed on his business venture and the brands. Similarly to
Richard Branson, he recently launched Kingfsher Airlines, which
draws a lot of its brand equity from Mallya himself.
Breweries:
Mallya took over as Chairman of the United Breweries Group in 1983.
Since then, the group has grown into a multi-national conglomerate of
over sixty companies with an annual turnover which has increased
by 639% to US$11.2 billion in 1998-1999 .The Local business areas of
the group encompass alcoholic beverages, life sciences, engineering,
agriculture, chemicals, information technology, aviation and leisure.
He owned McDowell Crest, which took loans in crores of rupees from
the general public .Kingfsher Premium Lager Beer is currently
available in 52 countries outside India and leads the way among
Indian beers in International market. It has been ranked among top 10
fasting growing brand of UK. UNITED SPIRITS LIMITED (USL) has
a portfolio of more than 140 brands of which 19 are millionaire
brands(selling more than million cases a year) and enjoys a strong59%
market share for its frst line brands in India. United Spirits recorded
global sales of 90 million cases for the year ended on March 31,2009.
With the acquisition of BOUVET LADUBAY in 2006,the UB Group has
made a strategic entry into of the wines category. Bouvet-Ladubay,
located in the Loire valley of the Saumur region in France, has a
heritage of over 156years.
Airlines:
In 2005, Vijay Mallya established Kingfsher Airlines. At present, the
airline connects 32 cities. Mallya's Kingfsher airlines recently
obtained 46% stake in Air Deccan, a low cost Indian airline which he
later acquired fully and integrated it into his Kingfsher feet,
rebranding it as Kingfsher RED. Vijay Mallya and his Jet Airways
counterpart Naresh Goyal announced an alliance after a marathon
meeting on 13 October 2008 at Mumbai, India. Kingfsher airlines
were the frst airlines to order the Airbus A380. In just about three
years Kingfsher has become one of the leading airlines in India.
Fertilizers:
MANGALORE CHEMICALS & FERTILIZERS LIMITED Located in
Karnataka, the only fertilizer company under UBs management that
has afected an amazing turnaround to become one of the
most efcient and proftable naphtha based urea producers in the
country. In 1990, the Government of Karnataka had selected the UB
group to take over Mangalore Chemicals& Fertilizers. The company
achieved a turnover of 614crore up by 9% over the previous year. UB
Engineering UB Engineering- the UB Groups Engineering division-is
one of the foremost Indian Engineering companies in the feld
of installation plants. UB Engineerings activities are strongly
focused on the Trunkey division for projects in Power, Fertilizers, oil &
gas, Fire Fighting, Efuent Treatment, Agro tech and other sector like-
concept to commissioning, on site fabrication, installation, overhauling
and maintenance.
INVESTMENT IN SPORTS:
Formula one
Vitantonio Liuzzi driving for Mallya's Formula One team, Force India,
at the 2009 Japanese Grand Prix.
In 2007, Mallya and the Mol family from The Netherlands bought
the Spyker F1 team for 88 million euros.
]
The team changed its name
toForce India F1 from the 2008 Season. Team's car VJM-01 was
named after its owners Vijay Mallya, Jan Mol and Michiel Mol
.
Mallya also represents India in the FIA World Motor Sport Council,
where he has a seat from 2009 to 2013.
Cricket
Indian Premier League is a cricket tournament being organised by the
Board of Control for Cricket in India (BCCI) and backed by the
International Cricket Council (ICC). For the inaugural tournament
held in AprJun 2008, the BCCI had fnalised a list of 8 teams who
will be participating in the tournament. The teams representing 8
diferent cities of India, including Bangalore, were put up on auction
in Mumbai on 20 February 2008 and the Bangalore team was won by
Vijay Mallya, who paid US$111.6 million for it. This was the second
highest bid for a team in the IPL, next only to Mukesh Ambani's
Reliance Industries' bid of $111.9 million for the Mumbai team.
Bollywood actresses Katrina Kaif and Deepika Padukone, and
Sandalwood flm stars Ramya and Puneeth Rajkumar are the brand
ambassadors of the team.
Football
Mallya's United Breweries sponsors the East Bengal and Mohun
Bagan football clubs in Kolkata where Mallya spent his childhood.
He also was part of the consortium that acquired Queens Park
Rangers FC; the consortium also included Bernie Ecclestone, Flavio
Briatore and Lakshmi Mittal.

MISSION STATEMENT FROM THE TYCOON

We constitute a large, global group based in India. We associate
with world leaders in order to adopt technologies and processes
that will enable a leadership position in a large spectrum of
activities.
We are focused on assuming leadership in all our target markets.
We seek to be the most preferred employer wherever we operate.
We recognize that our organization is built around people who
are our most valuable asset.
We will always be the partner of choice for customers, suppliers
and other creators of innovative concepts.
We will continually increase the long-term value of our Group for
the beneft of our shareholders.
We will operate as a decentralized organization and allow each
business to develop within our stated values.
We will be a major contributor to our National Economy and
take full advantage of our strong resource base.
We commit ourselves to the ongoing mission of achieving
Scientifc Excellence
KEY MILESTONES
Upon assuming the position of Chairman in October 1983, Dr. Mallya
initiated the process of defning a corporate structure with
performance accountability, inducting professional management and
consolidating the unwieldy empire into individual operating divisions.

In 1988, Vijay Mallya became a non-resident Indian to pursue
global opportunities and to transform the UB Group into Indias frst
multinational. In a leveraged buyout, Mallya acquired the global
Berger Paints Group with operating companies across four continents
and divested it at signifcant value in 1996 through a successful exit
strategy that included fve initial public oferings on the stock
exchanges in London, Singapore.

In 1990, Mallya led the restructuring of The UB Group, retaining
only the areas of core competence, transforming the vastly diversifed
UB conglomerate into a handful of key operating businesses that
dramatically increased shareholder value

In 1993 he founded UBICS, Inc, listed on the NASDAQ in 1996, a
leading global provider of a broad spectrum of IT services and IT
products for the vast US market

Mallya personally steered The UB Groups entry in civil aviation
with Kingfsher Airlines, launched in May 2005. The full service luxury
domestic airline operates a feet of 13 brand new aircraft that provide
70 daily fights connecting 16 cities. In its frst year of operations
Kingfsher Airlines was awarded service excellence awards.

On entering the new millennium, The UB Group is considerably
more focused and has dramatically increased value for its
shareholders through its various operating businesses. Sales of the
UB Spirits Division have exceeded 60 million cases (9 litres each)
during the fscal year 2005-06 making the UB Group, the third largest
beverage alcohol company in the world. In addition, this Division is
one of only three in the world to own seven millionaire brands and at
least fve brands rated by Drinks International, UK to be amongst the
ten fastest growing brands in the world in their respective categories.
The market share of the Spirits Division in India is currently 60% and
exports to the Middle East, Africa and Asian countries are growing
rapidly

The UB Groups Brewing Division has also assumed undisputed
market leadership with a national market share in excess of 50%.
Through a process of aggressive acquisition and market penetration,
The UB Group today controls 60% of the total manufacturing capacity
for Beer in India. The fagship brand, Kingfsher is now sold in over 50
countries worldwide having received many accolades for its
quality. The fagship brand, Kingfsher is now sold in 32 countries
worldwide and its quality has received undisputed praises

The newest venture of The UB Group is in Civil Aviation. After the
initial launch of UB Air in 1990, Vijay Mallya decided to take
advantage of the attractive growth opportunities for Civil Aviation
in India, leverage the equity of the Super brand Kingfsher and utilize
the strength of The UB Group in consumer product marketing.
Kingfsher Airlines Limited launched scheduled Airline services on May
9, 2005 with 4 fights a day with one brand new Airbus A-320 aircraft.

It was Indias second largest budget carrier. Designer uniforms
for stewards, bold usage of colour palette inside the aircraft and the
ever so charming kingfsher logo thats Mallyas famboyance.
Kingfsher airlines proved out to be the most glamorous domestic
airlines.
In just 10 months from launch, Kingfsher Airlines has received 3
International Awards. The frst was the Best New Airline of the year
award in the Asia Pacifc and Middle East region given by the Centre
for Asia Pacifc Aviation. The second was the Skytrax award for
service excellence. Skytrax, London is the leading independent
research and quality evaluation agency for the World Air Transport
Industry. The latest addition to the list of laurels is the Best New
Domestic Airline for Excellent Services and Cuisine award from
Pacifc Area Travel Writers Association (PATWA), one of the biggest
travel writers organizations in the world.

After Mallyas successful airline venture, it was time now for
Entertainment industry. And what better than joining hands with
NDTV in launching Indias frst lifestyle channel NDTV Good Times.
UB group owned Kingfsher brand took over the charge for this exotic
channels promotion and it came into being on September 7, 2007.

Vijay Mallya, a sports lover, bought Spykar F1 team along with
Micheil Mol in October 2007 for 88 million euros. It was a 50-50 joint
venture between him and Mol, a director of Spyker Formula One, of
the Netherlands. The world saw Indias frst Formula One team
Force India came into existence
Vijay Mallya owns one of the largest private yachts in the world
called Indian Empress
HALL OF FAME

Co-owns a Formula One team, Force India, with Dutch
businessman Michiel Mol.
Vijay Mallya is the Chairman of public companies both in India as
well as in the USA. He has been the Chairman of Aventis
Pharma India (previously Hoechst) as well as the Chairman of Bayer
CropScience in India (previously Agrevo) for over 20 years, in
addition to his Chairmanship of several other corporations.
Vijay Mallya has received several professional awards both
in India and overseas. He was also conferred a Doctorate of
Philosophy in Business Administration, by the Southern California
University, Irvine. He has also been nominated as a Global Leader
for Tomorrow by the World Economic Forum.
Mallya was nominated global leader for tomorrow by the World
Economic Forum, Davos, in 1995
He has served as an elected member of the Rajya Sabha (the upper
house) of the Indian Parliament and has served as a member of
various Parliamentary committees and on defense, science and
technology, environment and forests, and industry.
He was also conferred a Doctorate of Philosophy in Business
Administration, by the Southern California University, Irvine.
He is also the chairman of both the Federation of Motor sports
Clubs in India (FMSCI) and Motor sport Association of India (MAI).
UNDISPUTED TYCOONS MARCHING CONTINUES

From Mallya, liquor baron to Dr Mallya, national working president,
Bharthiya Janata Party. From soirees in South Africa to rallies in
Raichur, the man is a complex network of thoughts and ideas all rolled
into one massive brand.

This passion and energy is evident in all that he has done, from
creating the largest manufacturer of spirits in the world to tirelessly
touring Karnatakas hinterland as a politician.
He even carefully applies this energy to combat his greatest fear:
failure.

Thats why he very rarely fails, says his friend of 20 years, Jim
Rydell, vice president, USA Labs, California. His mind is very agile;
hes far sighted and has a great sense of marketing and branding.

And his energy is never ending.
Liquor and airline tycoon Vijay Mallyas dream of owning Indias best
airline has lately turned into a nightmare not only for him, but for his
bankers and his guests, as he refers to passengers travelling on his
Kingfsher Airlines. The six-year old carrier, started with great fanfare
in 2005 to mark his son Siddharthas 18
th
birthday, has hit an air
pocket, serious enough for Mallya to appeal to the government,
specifcally Indias fnance minister, for a bailout.
Shares of Kingfsher which have fallen 80% in the past year, took a hit
Friday amid reports of the carriers myriad fnancial woes, including
that leasing companies may repossess its aircraft due to defaults in
payments. Cash-strapped Kingfsher which is weighed down by debt of
$1.7 billion, has also been struggling to pay salaries and jet fuel bills.
It reported a net loss of $200 million in the last fscal year ended
March. Its lenders include State Bank of India and ICICI Bank, the
countrys two largest banks which own more than 5% apiece of money-
losing Kingfsher.
This week, the airline hit squally weather as it began cancelling fights
on a daily basis- 40 fights were cancelled Friday-and attracted a show
cause notice from the aviation regulator demanding an explanation for
the mass cancellations. Pilots have reportedly left the airline in droves
in the past few months. The airline contends that the cancelled fights
have nothing to do with shortage of crew with its chief executive
calling the departure of pilots a process of natural attrition.
In September, Mallya, who recently featured among Indias Richest
with a fortune of $1.11 billion, took a controversial decision to shut
down budget carrier Kingfsher Red in a bid to stem losses. He has
reportedly claimed that the recent spate of fight cancellations was due
to rationalisation of routes and that some aircraft are being
reconfgured to accommodate more business class seats. A note sent
to members of King Club, the airlines frequent fier program, claims
that Once the reconfguration is complete, these aircraft will be
pressed back into service immediately. Clearly the report about our
fights being cancelled owing to the supposed exodus of pilots appears
to be falsifed.
Aviation experts say that while Kingfsher is in a critical zone, it isnt
likely to go under. Kapil Kaul, chief executive of the Centre for Asia
Pacifc Aviation in India said that Kingfsher urgently needs an
immediate cash infusion of $200 million going upto a total of $850
million over the next two years. But more than money, the airline
needs a complete overhaul and a crack team that can turn it around,
said Kaul.
Mallya isnt alone in his woes as his rivals, with the exception of low-
cost carrier IndiGo Airlines, are facing challenges of their own. Jet
Airways owned by Naresh Goyal, a former billionaire now reduced to
millionaire status, reported a net loss of $143 million Friday, in its
latest quarter.
POLITICAL CAREER
Mallya entered politics in 2000 as a member of the Janata Party. His
party contested almost all of the 224 seats during the Karnataka State
legislative election He campaigned vigorously through the media, but
his party failed to make any impact and did not win a single seat.
Following the party's failure in the elections, it has been largely
ignored by the media,
[15]
although Mallya recently became an MP
independently.
AUCTION PURCHASES
Vijay Mallya is noted for his successful bidding in auction of items that
are considered of great historical value to India. In 2004, he placed the
winning bid of 175,000 for the sword of Tipu Sultan at an auction in
London, and brought it back to India. In March 2009, Mallya
successfully bid for the belongings of Mahatma Gandhi at
US$1.8 million, in a New York auction that initially caused an uproar
in India and its government tried and failed to prevent it from going
under the hammer.
OTHER BUSINESSES
Establishment of Mallya Hospital in Bangalore. The hospital is
located on Vittal Mallya Road, named after his father.
Helped to fund the Mallya Aditi International School, a private
school in Bangalore.
He owns a TV channel called NDTV Good Times.
He also owns the popular kunigal stud farm, situated near
Bangalore.
His F1 team Force India, in association with MTV India produced
a reality show, MTV Force India The Fast and The Gorgeous in 2009.
The show is about 20 gorgeous girls competing to be the face of Force
India F1 in the 2009 season. The winners of The Fast and the
Gorgeous were supposed to get to travel the world with the team, host
the after-parties and appear in the F1 calendar.
QUALITIES OF MR. VIJAY MALLYA
Flamboyant and fashy lifestyle
Mr. Vijay Mallaya has been known for his charismatic personality,
famboyance and lavish lifestyle. The stylish Business tycoon is
known for sporting diamond ear studs. Mallya does not think
twice before faunting his wealth. Mallya owns yachts, private jets,
a customized Boeing 727,around 250 vintage cars and a stud farm
with 200 horses.
Sports lover
Vijay Mallya is the owner of the BANGLORE ROYAL
CHALLENGERS Team of IPL. Mallya paid Rs 464.3 cr for the team.
The team was lead by Rahul Dravid for the frst season and by Anil
Kumble for the second season. The team has players like Zaheer
Khan, Praveen Kumar, Mark Boucher and many morebig names.
Mallya and Dutch Businessman Michiel Mol are the owners of a
Formula One Team, FORCE INDIA. Force India was earlier
called spyker .They bought the team for 88 million Euros.
Great Acquirer
UNITED BREWERIES is the second largest spirit group in the
world. The UB group acquired Whyte and Mackay for 595 million
pounds in 2007.The UB group has a market capitalization of
around US$12billion. In the aviation sector KINGFISHER has
become one of the leading Airlines in India. Mallya owns 46
percent stake in the low cost airline Air Deccan.
Great Leader
Vijay Mallya became the Chairman of the UB Group at age 28 ,
after his father Vittal Mallya passed away. Since that time he
has led the group and turned into a multi billion dollar business.
Today the company has annual sales of more than US$4 billion.
Vijay Mallya holds an honorary Doctorate of Philosophy in
Business Administration, conferred by University of fullest. Under
his dynamic leadership the group has grown into a multinational
conglomerate of over sixty companies.
Hard worker
Vijay Mallya was born on December 18, 1955. He studied at
La Martini ere School in Kolkata. Mallya went to St Xaviers
college, University of Calcutta for his Bachelors Degree. He started
working whilehe was in college. He worked for his company for
Rs 400 per month. Later, Mallya went to the USand worked
for American Hoechst Corporation.
For the people
Vijay Mallya is a personality who believes a lot in helping
the society. He helped in the establishment of Mallya Hospital in
Bangalore. The hospital is located in Vittal Mallya Road, named
after his father. He also helped to fund the Mallya Aditi
International School, a private school in Bangalore. These are
some of his major achievements.
L EARNINGS FROM THIS GREAT LEADER

Hardwork :Despite having his fathers own company he worked
there for just Rs.400 at the initial level. This shows the hard work
and dedication from this individual.
Leadership skills: After his fathers death he took the charge of
UB group at an early age of 28. He turned his fathers 50 crore
company into 5000 crore unit.
Passionate: It was his own passion and interest which he turned
into business units. He turns his passion into his business. It
was his passion which led him to purchase RCB of IPLand
FORCE INDIA a Formula one team.4.
Mammoth: Out of all the liquor consumption throughout the
world 9% is from the UB which shows the mammoth
contribution of this group.
REFERENCES:
www. india developmentblog.com/2009/06/ financing -smes .html
www. sme chamberof india .com/.
www.in sme .org/files/3621
www.eubusiness.com/ SMEs /funding
www.bizchange.in/times sme /faces/!sp/.../ SMEFinance "olutions.!sp
www. funds forngos.org/tag/ smes /