CHAPTER 5 SWOT ANALYSIS

5.1 SWOT ANALYSIS

SWOT Analysis is a strategic planning method to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in a business.

5.2 SWOT ANALYSIS OF KSFC

1. Government Organization KSFC was established under state Financial Corporation Act-1951, by the government.The state government has more than 90% of the stake holding, and hence, has gained public confidence. 2. Wide Network Coverage KSFC has branches all over the state. There are branches in every district so that the people can have a better access to the corporation and avail the assistance they need. 3. Well Qualified and Dedicated Human Resources KSFCs managers and personnel are competent to perform their assigned task and havethe ability to resolve any problems either directly or in consultation with the other functional executives. The corporation has unique combination of professionals on its pay-rolls- CAs, CFAs, MBAs, MAs, MCOMs, LLBs, M.TECHs, BEs, PhDs, etc. Thus diversity in its human resources is one of the great strength and asset of the corporation. 4. Diversified Facilities KSFC not only provides term loans and assistance to small and medium scale industries but also deals with mutual funds, insurance and also provides other services. 5. Quality service The managing director and other executives end staff of the organization are committedto ensuring that the system is effective in achieving quality and satisfying customer bothnow and in the future.

6. Availability of all financial services under one roof. 7. KSFC is one of few SFCs in the country which is earning profits.

5.2.2 Weaknesses
1. Higher Interest Rates Interest rates are costlier when compared to nationalized and private banks and view of this it is difficult for the organization to attract good customer. 2. Inadaptability Changing the policy adopted may be difficult to the organization, because it is a statutory corporation with lots of government control. 3. Outdated System KSFC still follows an outdated credit appraisal system 4. Long Procedure The procedure taken in executing some schemes is very long. 5. Accumulated Losses KSFC has a huge accumulated loss in its Balance Sheet. This prevents KSFC from paying dividend to shareholders. 6. Low Earnings The Corporation has not been able to earn sufficient profit to provide a margin of safety to the lenders. The investment made in the tangible assets is not justified by the amount of income that KSFC is able to generate.

5.2.3 Opportunities
1) Development in infrastructure sector 2) The rate of growth of economy also provides an opportunity to extend the financial assistance to an increasing trend.

5.2.4 Threats
1) Private Banks like ICICI, HDFC and commercial banks are very aggressive in financing loans by reducing their lower interest rate and processing time in their corporate finance. 2) Some corporations like IDFC are focusing their operations only on particular area like infrastructure. 3) Commercial banks are coming up with new innovative ideas for increasing the loan amount.