Bank credit to SMEs has declined over the last 4 years from Rs 437 billion in 2007 to Rs 248 billion on June, 2012. With this decline, the SMEs’ loan proportion to the total advances of banks has also decreased from 16 percent in 2007 to less than 8% percent in 2012.
2  BIS central bankers’ speeches  Although, this decline can partly be attributed to adverse economic conditions during the period and growing NPLs, however, a more risk-averse posture of banks remains a major factor responsible for their low exposure to SMEs.