They might have special cells or business units for funding and handholding the SMEs to grow like Citibank, Standard Chartered, and HSBC, or they might use credit card receivables as collateral as HSBC, they might selectively structuring back to back Letters of Credit like ICICI Bank, or they might go for tie-up like between Yes Bank and Netherlands\u2019 Wageningen University Research Centre to introduce Wageningen\u2019s Agrofood Park model.<\/p>\n
The time has been passed when banks were averse to lend to SMEs as they did not consider them as attractive and profitable undertakings, they perceived the SME market as risky, costly, and difficult to serve (Hossain, 1998; Bhattacharya et al., 2000; Sia, 2003; Wittmann, 2006; IFC, 2010; Ghatak, 2010). Recent studies indicate that most commercial banks perceive the SME sector as profitable and therefore, bankable (IBEF, 2005; Beck et al., 2008).<\/p>\n
According to IFC (2010) report, SMEs represent important potential clients for banks and the unmet SME demand for financial services represents a golden opportunity for banks to expand their market share and increase profits. The reason behind this drastic change in the attitude of bankers includes a rising contribution of SME in GDP, the size and scale of SME, SME to be a part of the global supply chain.<\/p>\n
Like large companies, small firms also access customers, suppliers, and collaborators around the world (Wright and Dana, 2003). They have a larger and more flexible inventive capacity for their size than large enterprises (Dana et al., 1999). Another reason for the growing attention is a realization that those SMEs that survived the global downturn in the late nineties could soon be giants in the making, with improved efficiencies (IBEF, 2005).<\/p>\n","protected":false},"excerpt":{"rendered":"
SME banking is not a novel phenomenon. All large public and private sector banks in India are involved in serving small and medium enterprises (SMEs) in their innovative way.<\/p>\n","protected":false},"featured_media":48026,"template":"","meta":{"pmpro_default_level":"","tdm_status":"","tdm_grid_status":""},"product_brand":[],"product_cat":[766,2347],"product_tag":[3473],"class_list":["post-76191","product","type-product","status-publish","has-post-thumbnail","product_cat-strategy-en","product_cat-study-library","product_tag-2007-2015","pmpro-has-access","first","instock","shipping-taxable","product-type-external"],"yoast_head":"\n