They often do not have adequate collateral to meet banks’ requirements, and have little awareness about available financing options. Further, reliable research data on important SME segments is also not available for use of banks. At the same time, on the supply side, one of the primary issues seems to be dearth of appropriate skills to evaluate SMEs’ credibility on non-traditional parameters.
This is reflected in the lack of innovation in product design and in marketing of financial products for SMEs. A sustainable solution requires that we take a more holistic view of this problem. A large number of players have to be involved in contributing to the success of SMEs.