Credit Management and Lending
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Small and Medium Enterprises in India — Certificate Course on MSME.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the typical repayment pattern for a Term Loan?
Term loans are repaid through monthly or quarterly instalments over a tenor of 3 years and above.
What is the current CGTMSE guarantee cover limit effective April 1, 2025?
₹10 crore
Against what primary security is Cash Credit typically granted?
Cash Credit is granted against primary security of stocks (raw material, WIP, finished goods) and book debts.
What is the maximum CGTMSE guarantee coverage percentage for women-led enterprises?
90%
What is Drawing Power (DP) in the context of Cash Credit?
Drawing Power is the limit computed monthly from the stock and book-debt statement filed by the borrower, determining how much the borrower can draw.
What additional CGTMSE cover percentage is available for MSEs located in Identified Credit Deficient Districts (ICDD)?
Additional 5% cover
How old must book debts be before they are normally excluded from Drawing Power calculation?
Book debts beyond 90 days are normally excluded from the Drawing Power calculation.
What is the typical margin applied by banks when computing Drawing Power for Cash Credit?
20–25%
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