A Study Of Banks Lending Facilities To MSMES In Goa
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Date
2025-02-27
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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.