BankKeeping

  Small and Medium Enterprises (SMEs) form the backbone of India's economy. Contributing nearly 30% to the country’s GDP, they play a pivotal role in employment generation and rural development. Despite their immense potential, one of the most pressing issues plaguing SMEs is limited access to credit. This begs the question—is the Indian banking sector adequately equipped to support the growth of SMEs through tailored loan products? In this article, we explore the current lending landscape, government interventions, challenges faced by both banks and SMEs, and the way forward for strengthening access to SME loans in India . The Growing Demand for SME Loans in India SMEs in India span various sectors—from manufacturing and services to IT and agriculture-related enterprises. As these businesses scale up, their need for working capital, expansion funds, and equipment financing grows significantly. According to a report by the IFC (International Finance Corporation), the credit g...

  Introduction Small, Micro, and Medium Enterprises (SMEs) are the backbone of the Indian economy, employing millions and contributing significantly to GDP and exports. Yet their growth is often stunted by limited access to bank credit. As the Government targets 50% SME share in GDP and 75% in national exports, evaluating the banking sector’s readiness to support SME financing becomes critical.   Why SMEs Need Better Credit Access SME loans —whether secured or unsecured—are vital financial tools for businesses to fuel operations, invest in assets, and scale. But traditional banks often hesitate to lend due to factors such as: Limited credit history Higher perceived risk of failure Low capitalization Insufficient documentation Scarce collateral Lengthy application processes These challenges have historically pushed SMEs toward non-banking financial institutions (NBFCs), fintech lenders, or collateral‑free government loan s...

  India’s financial ecosystem is rapidly changing, making it essential for individuals and businesses alike to stay informed about credit scores and their significance. A credit score serves as a key measure of creditworthiness, playing a crucial role whenever someone seeks a loan, credit card, or other financial assistance. Maintaining a healthy credit score can be especially vital during urgent situations like medical emergencies, home repairs, or business expansion. One lesser-known factor that influences credit scores is the hard inquiry—a common yet often misunderstood component of the credit assessment process.   What Are Hard Inquiries? A hard inquiry , sometimes referred to as a “hard pull,” happens when a financial institution or lender formally checks your credit report to assess risk before approving a credit product. This can include applications for: New credit cards Personal, business, auto, or education loans Mortgage loans Credit limit increas...