Amid these developments, private banks’ lending continues to decline by about 2-3 percent on a yearon-year basis. The amount outstanding of corporate bonds and CP issued is recently moving near the previous year’s level. Meanwhile, according to business surveys, the financial position of firms, particularly that of small firms, remains severe.
Risk-sharing facilities, coupled with the introduction of best practice SME lending approaches are key interventions that can help banks provide credit to SMEs. These interventions need to accompany enhancements to the enabling environment for SME lending such as credit bureaus, collaterals and insolvency regimes. 25. In addition to loan financing, SMEs have the option of collaborating with venture capital investors.