<p>A Crisil study on the funding patterns of 2,000 SMEs reveals that there is scope for banks to increase their lending to this sector by a whopping Rs 50,000 crore indicating that this sector has been under-banked all these years.<br /><br />“We believe SMEs will continue to drive economic growth, and present a significant business opportunity for banks. Banks will derive commercial benefits from lending to SMEs. Access to bank funds will help SMEs grow and prosper, and, in the process, favourably impact industrial output, and employment and wealth creation,” Crisil Ratings director Ramraj Pai said on Monday.<br /><br />“The funding opportunity is greater for smaller SMEs where turnover is less than Rs 5 crore. Also, bank branches in urban areas have greater scope than their counterparts in the semi-urban and rural areas to increase funding support to SMEs,” he said.<br /><br />The study estimates that the domestic banks funded on an average only around 60 per cent of the incremental working capital requirement between FY07 and FY09.</p>
<p>A Crisil study on the funding patterns of 2,000 SMEs reveals that there is scope for banks to increase their lending to this sector by a whopping Rs 50,000 crore indicating that this sector has been under-banked all these years.<br /><br />“We believe SMEs will continue to drive economic growth, and present a significant business opportunity for banks. Banks will derive commercial benefits from lending to SMEs. Access to bank funds will help SMEs grow and prosper, and, in the process, favourably impact industrial output, and employment and wealth creation,” Crisil Ratings director Ramraj Pai said on Monday.<br /><br />“The funding opportunity is greater for smaller SMEs where turnover is less than Rs 5 crore. Also, bank branches in urban areas have greater scope than their counterparts in the semi-urban and rural areas to increase funding support to SMEs,” he said.<br /><br />The study estimates that the domestic banks funded on an average only around 60 per cent of the incremental working capital requirement between FY07 and FY09.</p>