Abstract
Banks in India by the mere fact are commercial in nature and because of the level of risk involved, are forced to charge high interest rates, require high value collateral from Micro, Small Medium Enterprises (MSMEs), financial statements and bank statements for the facilities sought, which eventually increase the transaction cost for the MSMEs. This has brought in a daunting challenge for banks in the provision of the credit to the MSMEs.
 The study found that banks selected for this study appear inconsistent in their lending practices for MSMEs in Goa. Marked differences in lending facilities such as fund based facilities, non-fund based facilities and requirements of loan documents were reported between MSME loan managers at bank branches and head offices within banks.
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