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Sme Business In India

Introduction
Small and Medium enterprises play an important role in the development of the country. However, these industries face difficulty in accessing adequate finance for their businesses.
Apart from the traditional modes of financing like banks and money lenders, newer sources of Financing such as venture capital investment, can take care of their financing requirements. In the case of India, the government has taken several initiatives both at the national and international levels to improve the availability of finance. But there are still certain impediments that the SMEs face that are required to be addressed by the government.
SMEs encourage entrepreneurial development and dispersal of the industries throughout the length and breadth of the country. It also generates a lot of employment opportunities and the capital cost per employee is minimum. With the service sector contributing a major share to the GDP and as this sector relies on the SMEs, the scope for SME finance by the commercial banks has increased tremendously. The government is also committed to give a fillip to the 14 sector through infrastructural development, skill development effort, technological up gradation and by expending the role of small industries Development Bank of India in SME development.
SMEs contribute nearly 9% of India’s GDP and the Reserve Bank of India has advice all commercial banks to achieve 20% annual growth in SME lending till 2010, so that the SME Sector exposure to commercial banks is doubled. Public sector banks’ overall credit to SME sector grew by 26% in 2006-2007, which amounted to Rs. 1, 85000 cores. Among the large
PSBs, state bank of India’s SMEs exposure grew by 24% and all banks are targeting SMEs credit
growth of 25%
As the small and medium enterprises (SME) sector is one of the fastest growing industrial sectors all over the world, initiatives are being taken by both the national and develop small and medium enterprises. Prominent among them are...