Working Capital Finance to Smes

Topics: Bank, Factoring, HSBC Pages: 80 (18251 words) Published: August 20, 2009

“Working Capital Financing to SMEs”


The Hong Kong and Shanghai Banking Corporation Limited



1. Executive Summary 1 2. Introduction 2 3. Review of literature 3 4. Objective of the Project 7 5. Research Methodology 7 6. Company Profile 8 7. Factoring Overview 12 8. Factoring at HSBC 16 9. SWOT Analysis of Factoring 27 10. Comparative Analysis 31 11. Future of Factoring in India 33 12. Business Credit at HSBC (BLOC) 35 13. SWOT Analysis of BLOC 49 14. Comparative Study of BLOC 52 15. Recommendations 53 16. Conclusion 55 17. References

18. Appendices
a. Glossary of Terms
b. Indicative Offer
c. Suitability Note
d. Executive Summary(CARM)
e. KYC form
f. Processing fee Sheet
g. Yield Sheet
h. Negative Profile List


The project “Working Capital Financing to SMEs” was undertaken as a part of learning process during the summer training at The Hong Kong and Shanghai Banking Corporation Limited The report has been discussed in two parts. The first part provides an analysis of the mechanism followed by HSBC for factoring and business credit thereby elaborating the various features and steps involved. In the second part, a SWOT analysis of the two products have been made as well as a Comparative analysis has been done of the products with that of the other banks so as to help the bank rate itself and benchmark accordingly. A major comparison has been made between SBI and HSBC as regards the factoring service and another comparison has been made between HSBC and Standard Chartered bank as regards the business credit. These banks have been chosen for comparison on the basis of their excellence in the respective areas. The key learning from the project was the knowledge of the factoring service and the processes involved, which is still at nascent stage and expected to grow at a rapid pace. I tried to channelize my efforts towards learning the practical aspects of it so as to be able to contribute to the industry in future.


The Small and Medium Enterprises (SMEs) are of immense importance for the social and economic development of any economy. They significantly account for the gross domestic product of a country. But still majority of the Asian countries are suffering from underdeveloped SMEs. Though all firms face financial constraints, but as far as the SMEs are concerned, the picture is quite diverse and worse than other organizations. Few major reasons for this can be attributed to the dearth of finance, defective economic system, and imperfect financing and investment.

As far as defining the SME is concerned, no common pedestal exists. In some countries, it may be defined on the basis of scale of operations; while in others, the capital base or number of employees...
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