Abstract
Small and medium-sized enterprises (SMEs) occupy a position of strategic importance in Indian economy. These are serving as mainstay of country’s economy by contributing 8 per cent to country’s gross domestic product (GDP), 45 per cent to total industrial production and 40 per cent to the exports of the country. But many problems impede their growth, out of which finance is the most pressing one. Commercial banks have been found to be the main source of finance for SMEs. But informational opacity and risk in SMEs pose greater challenge for commercial banks in providing finance to them, hence resulting in a conservative approach of commercial banks towards SMEs. This article is an attempt to analyse attitude as well as decision-making criteria of commercial banks while extending credit to SMEs.
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