{"id":4335,"date":"2022-04-14T09:44:11","date_gmt":"2022-04-14T09:44:11","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=4335"},"modified":"2022-04-14T09:44:11","modified_gmt":"2022-04-14T09:44:11","slug":"role-of-supply-chain-finance-for-msme-in-india","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/role-of-supply-chain-finance-for-msme-in-india\/","title":{"rendered":"Role of\u00a0Supply Chain Finance\u00a0for MSME in India"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d27d3a31297\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d27d3a31297\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/role-of-supply-chain-finance-for-msme-in-india\/#Role_of_Supply_Chain_Finance_for_MSME\" title=\"Role of\u00a0Supply Chain Finance\u00a0for MSME\">Role of\u00a0Supply Chain Finance\u00a0for MSME<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/role-of-supply-chain-finance-for-msme-in-india\/#Making_of_MSME_credit_via_supply_chain_finance\" title=\"Making of MSME credit via supply chain finance \">Making of MSME credit via supply chain finance <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/role-of-supply-chain-finance-for-msme-in-india\/#Merits_of_supply_chain_Finance\" title=\"Merits of supply chain Finance\">Merits of supply chain Finance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/role-of-supply-chain-finance-for-msme-in-india\/#What_are_interest_rate_for_Supply_Chain_Finance\" title=\"What are interest rate for Supply Chain Finance\u00a0\">What are interest rate for Supply Chain Finance\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/role-of-supply-chain-finance-for-msme-in-india\/#What_are_the_Interest_rate_and_processing_fees_by_Banks_in_India\" title=\"What are the Interest rate and processing fees by Banks in India\u00a0\">What are the Interest rate and processing fees by Banks in India\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/role-of-supply-chain-finance-for-msme-in-india\/#FOLLOWING_IS_THE_TYPE_OF_SUPPLY_CHAIN_FINANCE\" title=\"FOLLOWING IS THE TYPE OF SUPPLY CHAIN FINANCE \">FOLLOWING IS THE TYPE OF SUPPLY CHAIN FINANCE <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/role-of-supply-chain-finance-for-msme-in-india\/#ELIGIBILITY_CRETERIA_FOR_SUPPLY_CHAIN_FINANCE\" title=\"ELIGIBILITY CRETERIA FOR SUPPLY CHAIN FINANCE\">ELIGIBILITY CRETERIA FOR SUPPLY CHAIN FINANCE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/role-of-supply-chain-finance-for-msme-in-india\/#List_of_Documents_Mandatory_For_Supply_Chain_Finance\" title=\"List of Documents Mandatory For Supply Chain Finance\u00a0 \u00a0\">List of Documents Mandatory For Supply Chain Finance\u00a0 \u00a0<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Role_of_Supply_Chain_Finance_for_MSME\"><\/span><span style=\"color: #ff0000;\"><strong>Role of\u00a0Supply Chain Finance<\/strong><strong>\u00a0<\/strong><strong>for MSME<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-4336\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2022\/04\/supply-chain-finance-1.png\" alt=\"supply-chain-finance-1\" width=\"1024\" height=\"328\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2022\/04\/supply-chain-finance-1.png 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2022\/04\/supply-chain-finance-1-300x96.png 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2022\/04\/supply-chain-finance-1-768x246.png 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2022\/04\/supply-chain-finance-1-800x256.png 800w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/p>\n<p><strong>MSME <\/strong>are very important for growth and development of Indian Economy. More than eighty percent of MSME in India takes place over bank credit and taking funding from informal or private sources at extra cost.<\/p>\n<p><span style=\"color: #000080;\"><strong>Various limits of challenges by banks from expanding funding to small businesses.\u00a0<\/strong><\/span><\/p>\n<ul>\n<li>High risk of non-payment.<\/li>\n<li>Need for deficiency on the data of business performance.<\/li>\n<li>Shortage of consistent financial reports.<\/li>\n<li>Hassle in the measuring of risk properly<strong>\u00a0<\/strong><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Making_of_MSME_credit_via_supply_chain_finance\"><\/span><strong><span style=\"color: #000080;\">Making of MSME credit via supply chain finance<\/span> <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>MSMEs in India plays an important role for providing jobs in corporation, they must try to opt for easy acquisition to finance. In india, accounting for MSME is an important share of GDP contribution and employment. When it comes to credit risk owning to the shortfall in the availability of repayment trend data, historical cash flow banks face difficulty.<\/p>\n<p>Supply chain finance is a type of loan when the payment is procured earlier as compare to the invoice of extensive user.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Merits_of_supply_chain_Finance\"><\/span><span style=\"color: #000080;\">Merits of supply chain Finance<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>As far as buyers are concerned: &#8211;<\/strong> <\/span><\/p>\n<p>buyers want to increase their DPO (days increasing outstanding) .<\/p>\n<ul>\n<li>Enhance the position of Working Capital<\/li>\n<\/ul>\n<ul>\n<li>It is the easiest way to procure the finance of working capital<\/li>\n<\/ul>\n<ul>\n<li>Has the benefit of negotiation<\/li>\n<li>Build up the relationship of the suppliers<\/li>\n<li>Maintain supply chain<\/li>\n<li>Support for the growth of the business<\/li>\n<li>Upgrade credit rating<\/li>\n<li>Initiate the effects of credit cash<\/li>\n<li>Expand liquidity<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>As far as suppliers are concerned: <\/strong><\/span><\/p>\n<p>Supplier can benefit from this through improvement of day sales outstanding gain financing for low cost.<\/p>\n<ul>\n<li>Make accessible settlement<\/li>\n<\/ul>\n<ul>\n<li>Decrease existing bills.<\/li>\n<li>Acquire an easy-to-use and understand platform.<\/li>\n<li>Reduce the cost of financing<\/li>\n<li>Assist in better financing rates<\/li>\n<li>Has the benefits of Working Capital<strong>\u00a0<\/strong><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"What_are_interest_rate_for_Supply_Chain_Finance\"><\/span><span style=\"color: #000080;\"><strong>What are interest rate for Supply Chain Finance<\/strong>\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table width=\"952\">\n<tbody>\n<tr>\n<td>Rate of interest<\/td>\n<td>@9.00% onwards<\/td>\n<\/tr>\n<tr>\n<td>Loan amount<\/td>\n<td>Up to Rs. 2 Crores<\/td>\n<\/tr>\n<tr>\n<td>Processing fee<\/td>\n<td>1.00%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"What_are_the_Interest_rate_and_processing_fees_by_Banks_in_India\"><\/span><span style=\"color: #000080;\"><strong>What are the Interest rate and processing fees by Banks in India<\/strong>\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table width=\"952\">\n<tbody>\n<tr>\n<td><strong>Bank name<\/strong><\/td>\n<td><strong>Interest rate\u00a0<\/strong><\/td>\n<td><strong>Processing fee<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Axis Bank Ltd.<\/td>\n<td>8.00%<\/td>\n<td>1%<\/td>\n<\/tr>\n<tr>\n<td>State Bank of India<\/td>\n<td>7.80%<\/td>\n<td>1%<\/td>\n<\/tr>\n<tr>\n<td>IndusInd Bank<\/td>\n<td>10.00%<\/td>\n<td>1%<\/td>\n<\/tr>\n<tr>\n<td>ICICI Bank Ltd.<\/td>\n<td>9.00%<\/td>\n<td>1%<\/td>\n<\/tr>\n<tr>\n<td>Bank of Baroda<\/td>\n<td>9.00%<\/td>\n<td>1%<\/td>\n<\/tr>\n<tr>\n<td>Kredx<\/td>\n<td>16.00%<\/td>\n<td>1%<\/td>\n<\/tr>\n<tr>\n<td>SBI global factors limited<\/td>\n<td>11.00%<\/td>\n<td>1%<\/td>\n<\/tr>\n<tr>\n<td>Tata Capital Financial Services Limited<\/td>\n<td>12.00%<\/td>\n<td>1%<\/td>\n<\/tr>\n<tr>\n<td>Lending Kart Finance Limited<\/td>\n<td>18.00%<\/td>\n<td>1%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"FOLLOWING_IS_THE_TYPE_OF_SUPPLY_CHAIN_FINANCE\"><\/span><strong><u><span style=\"color: #000080;\">FOLLOWING IS THE TYPE OF SUPPLY CHAIN FINANCE<\/span> <\/u><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Export and Import financing<\/li>\n<li>Confirmation, safekeeping, and LC checking<\/li>\n<li>Pre-shipment export shipment<\/li>\n<li>Import and Export bills<\/li>\n<li>Export LC advising<\/li>\n<li>Letter of Credit<\/li>\n<li>Performance bonds<\/li>\n<li>Shipping guarantees<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"ELIGIBILITY_CRETERIA_FOR_SUPPLY_CHAIN_FINANCE\"><\/span><span style=\"color: #000080;\"><strong><u>ELIGIBILITY CRETERIA FOR SUPPLY CHAIN FINANCE<\/u><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Eligibility is based on different factors including revenue from operation, age, CIBIL score etc.<\/p>\n<ul>\n<li>Age can be between 25 to 64 years of age.<\/li>\n<li>The limit on loan is 50 lakh.<\/li>\n<li>Public and Private Companies, Proprietary concerns, Private Trusts, Individuals, Limited Liability Partnerships, Partnership firms<\/li>\n<li>Business must be continued for 3 years minimum.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"List_of_Documents_Mandatory_For_Supply_Chain_Finance\"><\/span><span style=\"color: #000080;\"><strong><u>List of Documents Mandatory For <\/u><\/strong><strong><u>Supply Chain Finance<\/u><\/strong><strong><u>\u00a0 \u00a0<\/u><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>2 Passport sized photographs<\/li>\n<li>Income Tax Return if the computation of income (if filed) for 3 years.<\/li>\n<li>3 months&#8217; salary slips and appointment letter.<\/li>\n<li>Bank statement of salary account for 1 year.<\/li>\n<li>Complete property documents with ATS + MAP and Chain.<\/li>\n<li>Aadhar card and Passport<\/li>\n<li>PAN Card<\/li>\n<li>A Cheque for the processing fee.<\/li>\n<li>Permanent address proof and also needed if rented.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Role of\u00a0Supply Chain Finance\u00a0for MSME MSME are very important for growth and development of Indian Economy. More than eighty percent of MSME in India takes place over bank credit and taking funding from informal or private sources at extra cost. Various limits of challenges by banks from expanding funding to small businesses.\u00a0 High risk of &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[844],"tags":[860],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/4335"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=4335"}],"version-history":[{"count":2,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/4335\/revisions"}],"predecessor-version":[{"id":4338,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/4335\/revisions\/4338"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=4335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=4335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=4335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}