Product Name:

SME

Product Manual by Department of Organizational Development

Version: 0.1

SME LOAN
SME loan is a short term loan provided by Muthoot Fincorp Limited offer, against minimum collateral
requirement. This product shall be primarily for meeting
demands for stock purchase during festivals season with benefit
of repaying the loan in Equated Daily Instalments. This product
aims at helping our customers by providing a loan for meeting
their business requirements for availing discounts in stock
purchases during festival seasons. SME loan is offered against
security of hypothecation of stock in trade or business assets like
equipment. This is a short term loan meant only for individuals in
MSE sector given against hypothecation of stock in trade or fixed
assets in business.

Micro & Small Enterprises which constitute the lower rungs of broader MSME sector poses a huge
potential with unmet demands as this sector has very limited access to organized fund sources.
Many of them depend on Private Money lenders and other high interest funding sources.
It is also observed that Small businesses prefer Daily repayment system.
As a responsible, RBI regulated entity we are stepping in to meet their fund requirements at
reasonable interest rate, with daily doorstep collection.
SME can be pitched in for our existing customers to bridge their monetary requirements and
to creditworthy new customers who may not be having the means to avail loan by pledging gold/other
sources.
These products while helping MFL to attract new clients catalyses the noble cause of financial
inclusion too.
Finally, this is an opportunity for our employees to get accustomed to the unsecured loan business
An opportunity for learning and development.

Who are our target customers?

SME loan is meant for individuals with Micro and Small Enterprises engaged in

Trade,

Service and

Production In-order to meet their financial requirements.

How this product will be beneficial to customer?

Segment

Expected benefits through this product

MSE Segment

Hypothecation of stock in Trade or Fixed assets in business like

business equipments.
Loan can be utilized for
o Useful for meeting working capital requirement
o Stock purchases
o Meeting sudden spike in demand during festive season
o Business expansion
Daily collection facility
Door step collection- Customer need not come out during
business hours to make payment to MFL
Easy and fast disbursal
Very reasonable interest rate
Simple formalities
No pre-closure charge

Eligibility Criteria
1) Targeting individuals engaged in Micro & Small business sector of trade, service and manufacturing.
2) Age: 21- 55 yrs. Above 55 years Health Insurance is mandatory and loan can be extended up to 65
years of age.
3) Business should be owned by the Applicant.
4) Applicant to be sole proprietor of the business.
5) Applicant or Co Applicant should own a house or business premise in either of their names.
6) Co-Applicant should be either spouse or immediate blood relative.
7) Minimum 2 years of vintage in the same business in same premises.
8) Customer to be in the vicinity of 500 meter radius around the branch.
9) Minimum required Repayment Capacity to pay EDI specified
10) Minimum Scoring in overall assessment.
11) Should not have any history of default with MFL. (In case of existing customer)
12) Credit history will be checked with Equifax and should be supporting for disbursal with a clean
background.
11) Loan amount should be less than 75% of Stock in Trade/ Fixed Asset value assessed.

Key features of the product

Description

Features

Short term loan

Key Product Features

Offered for meeting business requirements

Offered against security of hypothecation of stock in trade or
business assets like equipment.
Equated Daily Instalment & Daily Doorstep Collection
Individuals who runs a business in any of the following segment;

Target Segment

Trade
Service
Production

Should not have any history of default

CIBIL/ Equifax based assessment
Eligibility Criteria

Vintage in business for more than 2 years

Repayment Capacity & Stock value to support Loan amount
Other criteria as mentioned above( Refer Eligibility)

Loan Amount (Pilot)

Min Rs 5,000 Max Rs 50,000

Tenor

122 days(will be collected in 104 instalments)

Rate of Interest

24% p.a. on daily diminishing basis

Processing Fee and

verification charges

Rs. 300 plus Service Tax as applicable irrespective of loan amount

Collection charges

Rs. 150 or 1% of the loan amount whichever is higher. This is being

collected at loan closure.

Foreclosure Charges

Nil

Minimum / maximum
age of borrower or co
borrower

Security

21 yrs. 55 yrs.

Above 55 years Health Insurance is mandatory and loan can be

extended up to 65 years of age.

Hypothecation of stock in trade for traders

Hypothecation of business assets like equipment in the case of

service industry.

Perishable goods cannot be considered for hypothecation as

stock in trade.

Credit Process

Approving Authority

Primary assessment of the information furnished in submitted

application

Business Premise visit by BM

Residence verification by BM

Tele verification by any branch Staff

Personal Discussion by MFL Branch Manager

Approximate Assessment of cash flow using PD form. (Daily

repayment capacity ratio not to exceed 60%)

Stock value or Fixed Asset in business -Assessment

Scoring across stipulated parameters based assessment

CIBIL/Equifax check by RM

Regional manager
Those are not eligible for a loan as per MFL credit policy, such as:

Non Target Segments

Default scenario

Applicant having close contacts with police or Advocates

Those with political influence/connections

Those in finance business/chit funds.

Those involved in running wine shops/liquor shops

Those with criminal background.

Defaulter of MFL

In the event of any default in payment of daily instalment, a default

charge of 3% per month will be charged on the defaulted EDI, for the
delayed days.

Repayment Mode

Equated Daily Instalments paid in cash.

Daily collection will be carried out by MFL staff and will be

provided with handheld devices.

Wherever electronic device not available have to follow the

instructions given for manual collection.

Documents required
Documents to be executed/ provided by Customer
1.

KYC- ID and Address proof for both applicant and co-applicant.

2.

Business proof.

3.

Residence ownership proof

4.

Postdated repayment Cheque ( Bank account should be in name of applicant or co-applicant)

Branches have to collect 3 Postdated Repayment Cheques with amounts filled up equal to (EDI
x 104) / 3 along with a covering letter (format attached) from the customer
a. 1st Cheque shall bear the date of 40th day from date of disbursal
b. 2nd Cheque shall bear the date of 80th day from date of disbursal
c. 3rd Cheque shall bear the date of 122nd day from date of disbursal
In case, if the customer has repaid the loan promptly the repayment Cheques should be
returned back to the customer and customers acknowledgement to be obtained in the Receipt
at the time of closure of loan.
5.

Application form

6.

Proprietor Declaration form

7.

Loan agreement on Rs. 100 stamp paper

8.

Receipt and DPN (borrower and co borrower).

9.

Stock statement.

10. Covering letter for repayment Cheques.

Documents to be taken by BM for credit assessment

1. Field Verification report by BM (attached).

2. Personal Discussion form (attached)
3. Scoring Sheet (attached)
4. Stock verification (attached).
Other documents to be provided/ updated by the BM

1. Documents to be duly verified and checklist to be filled.

2. Customer to be provided with a customer copy.
3. Branch declaration form- for Successful completion of all legal documents and process.
4. BM should update the repayments in the collection sheet (SPCR).
5. End use verification form.
6. Monthly Stock declaration form
7. Customer Profile Register- can be made as a part of SPCR

Important Points- Documentation

1)

Application form: Application form duly filled and signed by both applicant & Co-applicant to be
obtained mandatorily. Specific purpose of availing loan to be mentioned in the space provided.

2)

Personal Discussion Form & Scoring Sheet: Client Assessment is one of the most important steps in
unsecured loans. Hence obtaining correct figures pertaining to income & expenses as required by PD
form is of utmost importance. Stock in Trade need to be taken and recorded in Stock verification
form to check whether loan amount to Stock value ratio is supporting. Then scoring to be done by
BM with an impartial attitude.

3)

Loan agreement has to be printed on Rs. 100 stamp paper. The cost for the same will be borne by
the customer
a) Loan agreement needs to be taken in fresh papers.
b) All relevant information to be filled properly without corrections.
c) All pages of agreement should be duly signed by the borrower, co borrower and the lender.
d) Branches (BMs) to sign of the agreement as signatory for Muthoot Fincorp Ltd.

2) Demand promissory note DPN should be properly signed- borrower & co borrower to sign on it.
Revenue stamp should be affixed and customer and co borrower has to sign over the stamp and also in
the space provided outside the stamp.
3) Receipt of Loan Amount Receipt should be obtained and duly filed. Revenue stamp should be affixed
and customer and co borrower has to sign over the stamp and also in the space provided outside the
stamp.

3)

Customer Copy - It should be duly filled and handed over to the customer. Branch seal with BM
name and signature should be affixed.

4)

All repayments received from the customer to be recorded in the Collection register in specified
format (Attached) and also in the system. A separate Register (SPCR) for daily collection need to be
maintained.

5)

Checklist should be duly filled and should be filed along with other documents.

6)

All documents should be kept separately in vault.

DOCUMENT AND THEIR REQUIREMENT

Sr.
No
1

Document Name

Executed by

Requirement

Application form

Applicant

Enrollment form submitted by Applicant for

availing the loan

Field verification

Branch staff

It is a document executed by the branch staff

after visiting residence and business premise
of the customer confirming his ownership on
the business/ residence and his vintage in the
said location

Personal discussion
form

Branch Staff

It is an Important document for arriving at

surplus amount of the customer and
comfortable EDI which customer can repay

Stock verification

Branch staff

Scoring sheet

Branch Staff

Proprietor
declaration form

Applicant

Its for assessing the stocks available in the

shop before disbursal-A part of
client
assessment
A tool to assess customers repayment
capacity/ character assessment/ and other
quantitative & qualitative aspects .A minimum
of 2.15 is required
It is a declaration from the applicant that he
is the sole owner of the business and business
is in his name

Covering letter

applicant

To be provided by customer along with the

repayment cheque. A letter providing
information on repayment Cheques submitted
by the borrower

Loan agreement

applicant

DPN

Applicant

To be provided by customer along with the

repayment cheque. A letter providing
information on repayment Cheques submitted
by the borrower
It is an undertaking given by both borrower &
Co-borrower to MFL that they agree to pay
the loan amount with interest.

10

receipt

Applicant

Receipt is for confirmation of receiving the

disbursed amount.

11

checklist

Branch Staff

12

Branch declaration
form

Branch staff

13

Customer copy

applicant

A checklist to be used by BM to check

whether all the documents are properly
collected and executed
Declaration by the BM stating that all the
important terms and conditions have been
explained to borrower and required set of
documents executed
To be provided by customer along with the
repayment cheque. A letter providing
information on repayment Cheques submitted
by the borrower

14

Monthly stock
statement

applicant

Monthly declaration of stock- given by

Customer authenticated by BM. To be
submitted monthly till the loan closure.

15

Receipt (PDC)

customer

16

Customer profile

BM

17

End use
verification
certificate
Collection tracker

BM

Receipt stating that PDC has been received by

customer
Captures the complete profile of the
customer. This consists of Personal, business
details of customer, existing relationship with
MFL, current loan details, its purpose &
fulfillment and Over all experience with the
customer including his repayment.
It is a tracking of the end use and to check
whether the customer could fulfill the
need/purpose for which the loan is availed.
Tracker to be maintained in a Register by the
BM

18

Branch Staff,
Applicant

INTEREST RATE AND OTHER CHARGES

Applicable rate of interest is 24% p. a. on a diminishing basis. Minimum 7 days interest to be collected
if the loan is closed prior 7 days.
104 EDIs will have to be paid in a duration of 122 days
o EDI calculation:

LOAN AMOUNT

EDI

Rs. 10,000

Rs. 100

Rs. 25,000

Rs. 250

Rs. 50,000

Rs. 501

(Please note that EDI calculation does not include collection charges)

Customer will be charged an processing fee of Rs. 300 irrespective of the loan amount
Service Tax as applicable will be charged extra on the processing fee.
Customer will have to pay Rs. 150 or 1% of the loan amount, whichever is higher as collection
charges.

Unique Selling Proposition

Daily collection option- no undue pressure on customers cash flow.

Doorstep collection- Customer need not come out during his business hours.
Pre-closure allowed without any charges.

Easy and fast disbursal.

Steps in acquisition & disbursal SME

Branch manager (BM) to scrutinize the application form as submitted by the Customer.
Field verification by BM
Filling up of personal discussion form
Stock verification report
Filling up of scoring sheet
Proprietor declaration form
RM approval(Equifax)pp
Other documents and 3 Cheques
Covering letter for the Cheques
Loan cum hypothecation agreement to be filled
DPN
Receipt confirmation of the loan
Checklist
Disbursal through A/C payee cheque/NEFT
Customer receipt has to be taken
Branch declaration has to be furnished
SPCR (fill the daily collection in the SPCR)
Monthly stock verification and declaration
The documents should be kept safely for further verification
AM/RM can visit branches for post disbursal verification
Receipt (PDC cheque by customer)
End use verification
Customer profile register by BM

Notes:

Cash Sales: Total amount received though sale of goods and services in a normal month, preferably
previous month if there was no festivals.

Credit Sales Recovered: Total amount received through sale of goods and services on credit,
preferably previous month if there were no festivals.

Cost of Sales: Cost involved in purchasing the raw materials / inventory.

Other Business Expenses: Includes Transportation / fuel, Taxes/ licenses, Insurance, Advertisement,
Maintenance, and any other costs involved in the business.

Other Sources of Income: Includes interest from banks/ remittances from abroad etc.

Other Family Expenses : Provisions/ education/ transport/ clothing/ medical expenses/

entertainment etc

Total Assets: FD in banks/bonds/ debentures/chits/house/vehicle/property etc. (Fixed Assets are vehicle,

buildings/house, machinery etc. Liquid Assets are Bank balance, chits, bonds, debentures etc)

Total Liabilities: Total outstanding loans / debts.

Monthly Payout Liabilities: Monthly payment towards loans/debts like interest/ installments on
chits/saving schemes etc.

Disposable Income: The remaining income after all the expenses excluding the SME repayment
amount available as surplus.

Proposed Loan Installment: EDI x 26

(No. of Days in a month for which the customer has to pay the EDIs excluding Sundays)

Available Surplus: The remaining income after all the expenses including the SME repayment amount
available as surplus.
Daily Surplus: Available surplus
30
30 is the No. of days in a month

Daily Repayment Capacity:

EDI
x 100
Average Daily Surplus

Daily Repayment Capacity should be below 60%. Lesser the % better the repayment capacity.

SCORING SHEET
SCORING ASSESSMENT
Parameters

Weightage*

Repayment Capacity

30

Character assessment

30

Business vintage

Stock value assessment

Residence verification

10

House hold assets

Tele verification

Liabilities

Savings habit

Total

100

*Weightages: Weightages refer to importance you give to particular aspect in a quantitative manner. In our
case, repayment capacity and Character of the customer are critical and hence higher weight ages have been
assigned.
Scoring
1. EDI to surplus ratio (Repayment Capacity) (WEIGHTAGE 30)
Repayment capacity

Requested Loan EDI/Available surplus (Daily)

5 = VERY HIGH REPAYMENT CAPACITY

4 = HIGH REPAYMENT CAPACITY
3 = MODERATE REPAYMENT CAPACITY
2 = Avg. REPAYMENT CAPACITY
1 = LOW REPAYMENT CAPACITY
MINIMUM REQUIRED SCORE = 2

Score
Below 30%

30%-40%

41%-50%

51%-60%

Above 60%

2.

CHARACTER ASSESSMENT (WEIGHTAGE 30

CHARACTER ASSESSEMENT
Parameter
Co - operating in providing information (PD)
Knowledge of business (PD)
Repayment history with MFL(MFL)
Hose hold appearance (RVR)
Reference (TVR)
TOTAL /5

Score

Each of the points under the Character assessment has to be measured in the scale of 1 to 5. 1 being
the lowest and 5 if good.
For e.g.: first point refers to Co-operation in providing information. If the customer is very cooperative and open to questions, then a score of 5 may be provided.
If you find that the customer is not co-operative and hiding information and not cordial then a lower
score of 1 or 2 may be provided.
Similarly you have fill details for all six points under Character Assessment.

5 = EXCELLENT
4 = [Link]
3 = GOOD
2 = SATISFACTORY
1 = VERY POOR
THIS IS DIRECT SCORING DONE BY THE BM ACCORDING TO HIS UNDERSTANDING
MINIMUM SCORE REQUIRED = 2

3. BUSINESS VINTAGE(WEIGHTAGE 5)
BUSINESS VINTAGE
Parameter

Score

More than 15 years

10-15 years

5-10 years

2-5 years

Less than 2 years

Minimum vintage in the business should be 2 years.

4. STOCK VALUE ASSESSMENT (WEIGHTAGE 5)

Stock value assessment is done to identify whether the hypothecated stock values more than the loan
amount granted.
= (loan amount/stock value)*100

Stock value assessment

Score
Below 25%
25%-40%
41%-59%
60%-75%
Above 75%

Loan amount/Stock value

5 = EXCELLENT
4 = [Link]
3 = GOOD
2 = SATISFACTORY
1 = POOR
MINIMUM REQUIRED SCORE = 2

5.

OTHER PARAMETERS

Sl. No
4
5
6
7
8

Parameter
Resi verification
House hold assets
Tele verification
Liabilities
Savings habit

5
4
3
2
1

Scoring
Direct scoring out of 5
Direct scoring out of 5
Direct scoring out of 5
Direct scoring out of 5
Direct scoring out of 5

Weight ages
10
5
5
5
5

CALCULATION EXPLAINED

Parameters
Repayment Capacity
Character assessment
Business vintage
Stock value assessment
Residence verification
House hold assets
Tele verification
Liabilities
Savings habit
Total

Min Score
Required

Weight age

Weighted Score= (Weight age X Score Obtained)/ 100

Maximum Score which can be obtained is 5
Minimum Score required is 2.15

30
30
5
5
10
5
5
5
5
100

Weighted
score*
2
2
2
2
3
3
3
2
1

0.6
0.6
0.1
0.1
0.3
0.15
0.15
0.1
0.05
2.15

Min Weighted score

Required for approval

2.15

SCORING SHEET (EXPLAINED)

As given in the PD form, Mr. Hari, a Textile Shop Owner requires Rs. 50000/- under SME loan Scheme. Let
us prepare a scoring sheet for him.
EDI TO SURPLUS RATIO (Repayment Capacity)
= (DAILY EDI/AVE. DAILY SURPLUS)*100 (from PD form)
= (500/1662)*100 =30.08%
i.e., The score to be given is

CHARACTER ASSESSMENT
Particulars

Maximum
Points

Points Earned (As per

branch assessment)

COOPERATION IN PROVIDING INFORMATION

KNOWLEDGE OF BUSINESS

REPAYMENT

HOUSEHOLD APPERARANCE

REFFERENCE

Total

25

16

Score= Total/ 5 = 16/ 5= 3.2 THE SCORE IS 3 (if the score is up to 3.4 give 3 and if the score is
between 3.5 to 3.9 then give 4)

BUSINESS VINTAGE

BUSINESS VINTAGE
Parameter

Score

More than 15 years

10-15 years

5-10 years

2-5 years

Less than 2

Hari is in the textiles business for 8 years in the same premise. So his score is 3.

STOCK VALUE ASSESSMENT

Stock value assessment

Loan amount/Stock value

Score
Below 25%

25%-40%

41%-59%

60%-75%

Above 75%

Stock value assessment = (50000/300000)*100= 16.6%

The score is 5

OTHER PARTICULARS
Particulars

Resident verification
Household assets
Tele verification
Liability
Saving habit

Maximum
Point

5
5
5
5
5

Point
earned as
per branch
assessment
2
2
4
2
3

Assessment of Hari
Weighted Score= (Weight age X Score obtained)/ 100
Minimum Score required is 2.15, Hari has a score of 3.25 hence He IS ELIGIBLE FOR AVAILING SME LOAN of
Rs.50000/-, provided he is qualifies other eligibility norms for the loan.

Stock or equipments that can be hypothecated

Following is the indicative list of items that can be hypothecated

Medical Shop Medicines

Textile Shop Clothes

Provision / books and stationary/ fancy/ hardware stores/ Mobile etc. - Goods or products sold in the
respective stores.

MSMEs involved in manufacturing of items/ goods.

Hotel and restaurants Furnitures and equipments

Workshop/ Studio Tools/ Equipments

Clinics Equipments / medicines

Tailoring shops/ beauty parlors- Business Equipments & Furnitures

Labs/ Clinic/ Cybercafe/ Photocopying centers- Equipments

Agri- shops (Pesticides/ fertilizers/ nurseries/ machineries and implements)

Furniture shops-Furnitures

Parameters
Repayment Capacity
Character assessment
Business vintage
Stock value assessment
Resident verification
House hold assets
Tele verification
Liabilities
Savings habit
Total

Score
Weight age
Obtained
30
30
5
5
10
5
5
5
5
100

4
3
3
5
2
2
4
2
3

Weighted
score*
1.2
0.9
0.15
0.25
0.2
0.1
0.2
0.1
0.15
3.25

Bakery. - Loan can be given to this segment based on the risk being assessed and on the discretion of
the Branch Manager. Applicable stock should have sufficient shelf life which do not get spoiled very
soon.

Fruit & Vegetable Vendors: Loan can be given to this segment based on the risk being assessed and
on the discretion of the Branch Manager; but fruits & vegetables cannot be considered for
hypothecation; here only valuable Fixed Assets in business may be considered.

N.B. Pls. note in the valuation of Fixed Assets in business, depreciation may be applied suitably to arrive at
present value. Here, very conservative approach may be adopted to get the present value. For Capital
goods, electronic & electrical items etc under consideration, Make/Model, Year of Mfg, Purchase invoice
Value, etc may be notified in the Stock/Asset verification format.

COLLECTION PROCESS

Collection is one of the critical activities the branch staff has to undertake in the SME Loan portfolio.
Considering the nature of the Product, it is necessary that collection has to be done on a daily basis.
Collection should not been seen only as a way to get the daily installments, but this process may be seen as
a tool to connect to the potential customers. The benefits to customer and branch by this activity is given
below:

The customer need not visit branch for remitting the instalment and hence he need not take time
out of his business hour for repayment

Providing Door step service to the customers

Regular meeting with customers helps in building strong customer relationship and bonding.

Regular interaction outside the branch helps branch in acquiring new customers

Tremendous Cross sell opportunities for branches.

Process

Inform the customer about the EDI payment while disbursing the loan.

While going for daily collection, branch staff should carry the SME Payment Control Register
(SPCR). Annexure 1

This register maintains a separate page for each disbursed loan.

Collected amount should be recorded accordingly in the register (SPCR) against the respective
account.

Take full signature (no initials) of the customer in the customer signature column.

In the absence of the customer take the signature of the representative who is paying on behalf of
the customer & record his name.

Subsequently after receiving the payment the branch staff should also sign in the Branch staff
signature column.

Post collection the staff should hand-over the register along with cash to the cashier for system
updation.

The cashier will thereafter verify the collected amount, the signature and if convinced will affix his
signature in the Cashier Signature column.

After the verification by the cashier all the details have to be entered into the system.

The entries in the system and the register should be tallied and the same should be reviewed from
the Daily SME report which is available in the system.

Branch Manager should take a print out of daily collection from the system and should tally the same
with SPCR with his full signature in the printout.

A receipt will be generated from the system and the same can be delivered to the customer next day.

Control

SPCR and Daily collection report (system printout signed by the BM) should be reviewed by the AM
Ops, RM & audit team during their visit. Any anomaly noted should be documented.

Back-calling of delinquent customers should be carried out from RO, ZO & from HO. Disconnect
observed during such calls should be escalated.

FREQUENTLY ASKED QUESTIONS

1. What is SME Loan?

SME loan is a secured short term loans to our customers, against minimum collateral requirement.
This product shall be primarily for meeting demands for stock purchase during festivals season with
benefit of repaying the loan in Equated Daily Instalments.
SME loan is offered against security of hypothecation of stock in trade or business assets like
equipment.
2. SME is a _________?
Secured loan

3. What is the applicable interest?

The applicable rate of interest is 24% p.a on a diminishing basis.
4. Who should perform the Equifax check?
Regional managers should perform Equifax check.

5. What are the repayment options for the product?

The customer needs to pay on a daily basis. The amount will be collected by the Branch staff by
visiting business premise on a daily basis.
6. Who are the target segment?
This loan can be availed by the individuals engaged in Micro and Small enterprises. They may either
be part of service/ manufacturing or trading sector.
7. What is the minimum vintage required in the business to eligible for the loan?
Minimum vintage of 2 yrs. in the business is required to be eligible for the loan- More particularly 2
years in the same business in the same premise.
8. What is the maximum loan that can be availed?
As per the current policy, one can avail a maximum of Rs. 50,000.

9. What are the processing charges?

The applicable charges are Rs. 300 for availing the loan. Service Taxes as applicable will be charged
extra.
Further there is collection charge of Rs. 150 or 1% of the loan amount whichever is higher.

10. What is the minimum score required under Scoring sheet?

Minimum score required is 2.15

11. Can customer pre-close the loan? Yes

12. In whose name customer should get the stamp paper, customer name or MFL name?
Customers name
13. Shall we collect the advance EDI for 2 or 3 days if customer pays?
We can collect advance payment
14. If customer does not have any business proof, like in Vyapar Mitra can we take the shop photo and
FIR (Field Investigation Report)?
No, as per current policy norms- This is not considered as a business proof for SME/Suvidha Loans.
15. When should the branch collect EDI?
EDI should be collected 2 days after the disbursement.

16. My customer has monthly cash turn-over? Can I collect on monthly basis?
No
17. Customer X is having an existing SME Loan, can he avail another loan?
No, customer can have only one loan outstanding against his name
18. Explain the default scenario?
In the event of any default in payment of daily instalment, a default charge of 3% per month will be
charged on the defaulted EDI, for the delayed days.
19. Hari has requested a loan amount of Rs.50000/- under SME loan. Haris EDI to surplus ratio
(repayment capacity) is 30%. What does this mean?
This means that Hari need only to pay 30% of his Daily Surplus as EDI to MFL for the
proposed loan amount.
Rest 70% of the daily surplus is available to him which can be utilized for his other day to day
activities or contingent expenses.
Lower the EDI to surplus ratio better the situation. Lower EDI to Surplus ratio indicates Higher
Surplus with the Customer.
This also indicates the repayment capacity ratio supports the disbursal of specified loan
provided the customer meets other criteria as well.

Points To Ponder
An applicant cannot avail multiple loans under these schemes simultaneously. Each applicant can
take loans under these schemes for a second time only after the successful closure of existing
Suvidha or SME loans if any. This further means at any given point of time, a customer cannot have
two or more active loans under Suvidha and SME schemes considering them separately or together.
Suvidha & SME loans should not be extended second time to a customer if his track record of the first
loan under either of these schemes is not satisfactory.
Branches have to further ensure that co-applicant of an active loan cannot become applicant, coapplicant or guarantor of another loan under these schemes. They can apply further only after the
closure of the first loan.
AM/RM Verification post disbursement
Any Area Manager/Regional Manager who is visiting be it AM OPS /Marketing & Sales /HR & Admin
should ensure to check all the documents of disbursed loans and certify the checklist. Further any
discrepancy if found should be mentioned in the checklist and it should be ensured that the

discrepancy is rectified by the branches immediately. Further AM/RM may visit the business
premises and ensure that the loan amount has been utilized properly in line with the purpose stated
in the application form by the borrower.
Customer Profile register and end use monitoring
Branches are supposed to maintain a Customer Profile Register which should capture the complete
profile of the customer who has availed SME loan and purpose of availing loan; one page is to be
allocated for each customer and the loan details. After the disbursal of loan BMs to certify whether
the purpose of loan has been materialized after verification of the business premise.

RM APPROVAL

Once the data has been entered by the branch, RM is supposed to perform following critical function
1) Verification of documents submitted and customer profile.
2) Repayment Capacity of Customer.
3) Loan Value to Stock Value.
4) Scoring.
5) Other Eligibility Criteria.
6) Equifax check of the borrower ( Process Attached in the mail)
7) Sanctioning of Appropriate loan amount (by editing the loan amount requested by the customer, if
required.)
The module can be accessed at [Link]
RM can log in using his PJMCL User ID and Password and then his HRMS user id and password
In Equifax check, once the report is obtained, following points should be considered in the report
1) Customer profile and his account status whether standard/ sub-standard/ written off etc.
2) Date of report: Date of reporting should not be more than 2 months old
3) Whether the borrower has filed any suit/ case
4) Number of past due accounts
5) Number of live accounts- should not have similar loan
6) His total exposure (loan outstanding)

Once approval is provided by the RM, then the branches can proceed with disbursing the loan
RM APPROVAL MODULE LOGIN
Log in to [Link]
Click on member center- log in

Following credentials to be used

company id:2689
User id: as communicated from HO
Password: as communicated from HO
challenge: muthoot

Go to basic CIR report

Kindly punch in the customer details. Please note that the field marked red are the ones which are
mandatory

First name, Address, Postal Pin and State

Any one of Personal Id proof (voter id/ PAN/ Passport)
Any one of the Phone number
Date of birth

T h en Click GO To generate the report

SME MODULE LOGIN SCREEN SHOT

MUTHOOT SME LOAN

Log in to the module: [Link]

1.

Select
a) Loyalty No, if the customer has loyalty number
b) New Customers, if the customer is new

Enter
Business
Details

c) Enter basic customer details

a. Name/ Date of Birth/ Fathers Name
b. Business Address/ Type/ Constitution

Please enter the details of existing

relationship

2.
3.
4.
5.
6.
7.
8.

After entering all the details, upload the photo of the customer by clicking Capture
Upload the copy of ID and address proof, Signature proof and Business proof; Click Start Loan
Click on Start Loan
Enter the stock type.
Under CIBIL/ Equifax comment- please type To be provided by Regional Manager
Enter the loan amount requested
Click Save Details. Details will be saved and sent to RM for approval

Branches need to enter To be provided by

Regional Manager

9.
10.

Post Approval- go to Loan Disbursement

Enter loyalty number and select the corresponding loan number

11.

Click save details to disburse

INSTALLMENT REPAYMENT
After collecting daily installment, go to Loan- Loan Repayment- Enter the installment amount and click
Save