Abstract
Micro, Small and Medium Enterprises (MSMEs) are playing a stupendous role in the overall development of Indian economy. This is true even in the case other economies in the World. However, these enterprises have not been able to utilize their full potential to contribute for further development of the economy owning to many a number of problems. One such problem, of course a dominant problem, is the financial problem. The Development Financial Institutions (DFIs) such as Karnataka State Financial Corporation (KSFC) have become, to a greater extent, a panacea for the financial tribulations of MSMEs. In this backdrop, this paper makes an attempt to examine the performance of KSFC in terms of a few parameters such as number of new and existing industrial enterprises in MSME sector assisted, amount of assistance, interest expense, interest income, net interest spread, profit after tax, etc.
Highlights
Micro, Small and Medium Enterprises (MSMEs) are playing a pivotal role in the overall development of Indian economy
The MSMEs are in both manufacturing and service sectors
Few facts presented below signify their importance and contribution to the Indian economy (Prime Minister’s Task Force, 2010). They (MSMEs) contribute about 45% to the industrial output and the exports from MSMEs account for 40% of total exports
Summary
Small and Medium Enterprises (MSMEs) are playing a pivotal role in the overall development of Indian economy. The entire Indian banking sector is fairly matured in terms of any of the relevant parameters used to evaluate the performance of banking sector such as products, services, automation, expansion, presence in rural areas, ability to face competition, etc Most of these banking institutions do not finance the business units in their medium- and long-term fund requirements. The governments took necessary steps to establish development banks and other financial institutions to provide medium- and long-term funds to industrial enterprises including MSMEs for development and expansion purposes. The primary objective of KSFC is to meet the medium- and long-term financial requirements of MSMEs in the state During this 57-year period, it has expanded its activities substantially as a responsive financial institution. Since its inception, about 1,70,355 industrial units to the tune of 11,387.48 crores of which more than 50% is to MSMEs
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