Community banks also reduced their holdings of securities over the past year, while shortening the maturity of  5/6  their remaining holdings. As of June, only 15.8 percent of commercial bank assets had maturities beyond five years, compared with 16.9 percent at year-end 2004 and the peak level of 18.5 percent a year earlier.
At present, there is almost negligible flow of equity capital into this sector, which poses serious challenge to development of knowledge-based industries, particularly those that are promoted by firstgeneration entrepreneurs with the requisite expertise and knowledge. In the absence of alternate sources of finance, the SMEs’ reliance on debt finance is very high.