| Article Name : | |
| BANK CREDIT TO SME'S – MISSING LINK |
| Author Name : | |
| B. NAGARAJU AND KAVITHA VANI S.D |
| Publisher : | |
| Ashok Yakkaldevi |
| Article Series No. : | |
| GRT-2002 |
| Article URL : | |
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| Abstract : | |
| The concept of priority sector was evolved in the late sixties in order to focus attention on the need to ensure adequate facilities to certain neglected sectors of the economy; SSI is one among the neglected sector. The involvement of banks in SME financing has considerably since then. Various initiatives are taken by Government and RBI in smooth flow of credit to SME's. Different committees were also constituted. The amount of credit extended by commercial banks has consistently increased over the decades but the amount of credit extended is not in proportion to the number of enterprises. Number of SME's accessing institutional finance including commercial banks is very less. Around 1.56 lakh micro enterprises and .14 lakh small enterprises are availing institutional finance out of 26 million SME's. Literature review focusing on studies related to challenges faced by the SME's in accessing bank credit indicates that SME's are not able to get adequate and timely access to bank credit. There seems to be a finance gap between the supply and demand for SME bank finance irrespective of various initiatives taken by commercial banks. The effort of commercial banks in extending credit is not reaching the beneficiary. There is a need to link the efforts of banks to enable SME's to get adequate and timely credit. |
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