1. CREDIT
MANAGEMENT
Submitted to – Prof. Pranoti Kulkarni Submitted by-
DivyaVerma
HarshaAgrawal
LokeshYechuru
Niket Shah

2. WHAT ARETERM LOANS?
■ A term loan is a loan from a bank for a specific amount that has a specified repayment
schedule and a fixed or floating interest rates.
■ For example, many banks have term-loan programs that can offer small businesses
the cash they need to operate from month to month.
■ Often, a small business uses the cash from a term loan to purchase fixed assets such as
equipment for its production process.
■ The loan carries a fixed or variable interest rate, monthly or quarterly repayment
schedule and a set maturity date.
■ The loan requires collateral and a rigorous approval process to reduce the risk of
default.
■ A term loan is appropriate for an established small business with sound financial
statements and a substantial down payment to minimize payment amounts and total
loan cost.

3. INDUSTRY OVERVIEW
■ India is the 6th largest coffee producer in the world.
■ The estimated crop production of coffee in 2017-18 was 3,36,000 MT with marginal
increase od 4000 MT (i.e. 1.3%) from previous year.
■ India exports 70% of it’s total coffee production.
■ Total export of coffee from India in the year 2017-18 was 2,67,510 MT and is expected
to grow.
■ India accounts for about 4.5% of the world coffee production and the industry provides
jobs to over 6 lakh people.
■ India mainly exports two varieties of coffee i.e. Robusta andArabica.

4. GROWTH OF REVENUE OF COFFEE IN
INDIA
• Revenue in the Coffee segment amounts to US$423m in 2019.The market is expected to grow annually by
7.7% (CAGR 2019-2023).

5. COFFEEVOLUME GROWTH
• In the market for Coffee, volume is expected to amount to 51.1mkg by 2023.
• TheVolume of coffee production is expected to grow annually at 3% (CAGR 2019-2023).

6. COMPANY INTRODUCTION
■ Robusta Coffee Pvt. Ltd. has been in beverages industry for past 21 years ago.
■ The company deals with production and trading of coffee beans and coffee powder.
■ Capacity of 5000 MT per annum and supply to clients over 7 countries that includes
Germany, Italy, Belgium, Spain,Greece , Switzerland andTurkey.
■ We are planning to expand our business in the coming financial year 2019-20.
■ We have huge client base in domestic as well as international market.
■ There are four investors of the company.
■ We have assets of worth ₹ 2 crore, that includes machinery and coffee farm.
■ We have estimated our sales will grow annually at 10% CAGR from 2019-2021.

7. REQUIREMENT FOR LOAN
■ The demand for coffee beans produced by our company is increasing globally.
■ And we are also planning to expand our domestic business.
■ There is requirement of additional machinery for this.
■ We have raised the capital of ₹ 15 lakhs and we need ₹ 45 lakhs more to acquire new
machinery.
■ Some of our existing investment is being used to pay lease costs on the space while it’s
built out and construction expenses of warehouse.
■ The money we are requesting from Union Bank of India will go toward the following
needs:
• SILO: ₹ 50,00,000.We believe quality comes from good products.We need to
purchase good quality silo to store coffee beans,

8. • Z Belt Conveyer: ₹ 3,50,000
• Roaster: ₹ 3,50,000
• Grinder: ₹ 3,00,000
■ We are looking at Union Bank of India for a loan amount of ₹ 45 lakhs to be repaid
over 3 years at a rate of interest 11%.
■ The monthly payments would be ₹ 1,47,324.23.
■ Our estimates for revenue are an average of ₹ 15000 per day over 22 operational days
per month for a total revenue stream of ₹ 3,30,000 a month.
■ After factoring in staff costs of ₹ 80,000 per month and operational costs of ₹ 95,000,
we are left with enough money to comfortably repay a loan under those terms.
■ As we are Micro enterprise under MSME with turnover of less than ₹ 5,00,00,000, we
are eligible for collateral free loan up to ₹ 50,00,000 and we require a loan of ₹
45,00,000.

9. BENEFITS UNDER MSME SECTOR
■ Credit Guarantee Scheme
■ Credit Linked Capital Subsidy Scheme forTechnology Upgradation
■ Bank Credit Facilitation Scheme
■ Raw MaterialAssistance Scheme
■ Scheme for Development/Strengthening ofAgricultural Marketing Infrastructure, Grading &
Standardisation
■ Gramin BhandaranYojana:A Capital Investment Subsidy Scheme for Construction/Renovation of
RuralWarehouse
■ Development of Commercial Horticulture in Open Field
■ Development of Commercial Horticulture in Protected Cover
■ Development of Commercial Horticulture for post-harvest management projects
■ Scheme relating to Exporter Credit Insurance for Exporter

10. FINANCIAL PROJECTIONS
Estimation 2019 2020 2021
Revenue
Sales 49,60,000 54,56,000 58,00,000
Other Income 40,000 1,44,000 2,00,000
Total Income 50,00,000 56,00,000 60,00,000
Cost
Salary of Employees 9,60,000 10,50,000 11,80,000
Operational Cost 11,40,000 12,00,000 13,50,000
Other Expenses 2,00,000 2,50,000 3,50,000
Total Cost 23,00,000 25,00,000 28,80,000
Profit Before Interest and Tax 27,00,000 31,00,000 31,20,000
Interest 17,67,890 17,67,890 17,67,890
Profit Before Tax 9,32,110 13,32,110 13,52,110
Tax @ 20% 1,86,422 2,66,422 2,70,422
Profit After Tax 7,45,688 10,65,688 10,81,688
Cash Flow Projections
Year Cash Inflow Cash Out Flow Net Cash Flow
2019 50,00,000 42,54,312 7,45,688
2020 56,00,000 45,34,312 10,65,688
2021 60,00,000 49,18,312 10,81,688

11. FINANCIAL RATIO
RATIOS 2019 2020 2021
Operating Ratio 23% 22% 23%
Net Profit Margin 15% 20% 19%
Interest Coverage 1.52 (Times) 1.75 (Times) 1.76 (Times)