Empowering Growth: The Role of Commercial Banks in Financing Small and Medium Enterprises (SMEs) in India

Abstract

This research explores the pivotal role played by commercial banks in facilitating the financial growth and sustainability of Small and Medium Enterprises (SMEs) in India. SMEs form the backbone of the Indian economy, contributing significantly to employment generation and economic development. This study employs a mixed-methods approach, combining qualitative insights and quantitative analyses, to comprehensively examine the mechanisms through which commercial banks support and finance SMEs. The qualitative component of the study involves interviews, case studies, and expert opinions to capture nuanced perspectives on the challenges and opportunities faced by SMEs in accessing financial services from commercial banks. Simultaneously, quantitative data analysis will be employed to identify trends, correlations, and statistical patterns associated with the financing of SMEs. Various aspects of the role of commercial banks in SME financing will be investigated, including credit facilities, financial products tailored for SMEs, risk assessment, and the impact of banking support on the growth and sustainability of small businesses. The study aims to provide insights into the strategic implications of commercial bank interventions for the SME sector in India. The findings from this research are anticipated to offer valuable insights for policymakers, banking professionals, and SME entrepreneurs. By understanding the intricacies of SME financing by commercial banks, stakeholders can refine strategies, improve financial inclusion, and contribute to the robust development of small and medium enterprises, fostering economic growth in India. This study serves as a foundation for informed decision-making and future research within the realm of SME financing by commercial banks.