A Market Study on Bank Credit Facilities to Small and Medium Enterprises

The SMEs sector is emerging as one of the dominant sectors of the Indian economy. A convenience sample survey of 150 SMEs across Chennai city was conducted to analyze the awareness level regarding business credit facilities provided by the banks. The study also examines the credit requirements of SMEs, as well as difficulties faced by SMEs in availing bank finance. The study findings indicate that most of the SMEs are availing cash credit facility from banks and are aware of the bank credit facilities through their agents. In availing bank credit facility, simple documentation has been ranked first, followed by low interest rate, quick financing, reputation, period of repayment and service. The study also reveals that technology of the bank has improved tremendously when compared to other aspects like employee relations, adequate credit facilities and helping the rural people.