A Study on loans and advances by Regional rural banks to Micro small and Medium enterprises in Karnataka

Abstract

Finance plays a dominant role in every economic activity of an Organization and without newlineadequate availability of finance no sound business can be built up or reconstructed. newlineSufficient availability of funds enables to explore its option in all departments and have newlinethe best talent and resources available for its success. Review of literatures shows that newlineMSMEs has been facing difficulty in accessing funds and thus the shortage of liquidity newlinehas a cascading effect on acquiring latest technologies, hiring skill manpower, newlineimplementation of effective marketing strategy and finally this result into lower growth newlinerate by way of inability to harness the market potential and non-utilization of the total newlineproduction capacity of the enterprises. The MSME sector is contributing 8% of country s newlineGDP, 45% of manufacture and 40% of its exports. The sector has consistently registered newlinehigher growth rate compare to the overall industrial sector. Despite deficiencies and newlinechallenges, this sector has registered remarkable success with regard to increase in newlinenational GDP. The study will help in better understanding of MSMEs current situations newlineand also stimulate the Government and financial institutions specially banks to construct newlinea favourable environment for development of MSMEs. newline