What value addition do SMEs provide to the Indian banking scenario?
SMEs produce about 8,000 products in India and create around 50% of jobs in the manufacturing industry. Many SME products are also used as input material for bigger industries, e.g., Textile and Auto auxiliary industries, which are successful due to their input material suppliers. With the inclusion of the service sector in the definition of SMEs, the latter will need more finances. Not only special banks like SIDBI, but even the main PSU and private banks will be required to lend money to SMEs under various sectors. In fact, in a globalize business scenario Indian SMEs have a large untapped growth potential provided they can prove themselves competitive which would require investments in new technologies and business methods like ICT (Information and Communication Technologies).
