Another important factor is that risk assessment of smaller enterprises requires a separate set of tool as against the conventional tools, the absence of which is likely to dissuade banks from such lending. Further, smaller enterprises, in many instances, revolve around a single entrepreneur – key man – and lack good succession planning which discourages creditors to lend to such enterprises. IV.
Policy initiatives  Recognizing the important role played by MSMEs in economic development and their sizeable contribution to employment and GDP, and realizing that financial access is critical for MSMEs’ growth and development, Government and Reserve Bank of India have undertaken a lot of supporting initiatives. Let me very briefly touch upon a few of them.