Small
and Medium Enterprises (SMEs) have been affected by the lack
of access to credit. But now, they are looking at ratings
which would help them raise resources far more easily and
efficiently, and increase their share in the economic growth.
Despite
the non-availability of adequate capital-both domestic and
international, difficulties in accessing the capital market,
inadequate institutional assistance, traditional style of
functioning, and reluctance to change, the number of registered
and unregistered Small Scale Industries (SSIs) and their production
value have been increasing in the past five years. However,
to meet the challenges arising out of globalization, boost
the inflow of funds, and to generate more employment, Small
and Medium Enterprises (SMEs) need to be modernized and upgraded.
SMEs
plays a significant role in the Indian economy. They are the
major contributors to Gross Domestic Product (GDP), accounting
for 95% of all industrial units, 40% of industrial output,
nearly 50% of industrial employment, and 33% of exports. The
Government of India has announced that SMEs will be given
priority, next to agriculture, and that it intends to double
their credit outlay from the existing Rs. 67,000 cr by the
year 2009-10. Prime Minister Manmohan Singh emphasized the
need to ensure the bank credit portfolio to include increased
provision for SMEs. Though the operationalization of the Rs.
10,000 cr fund under SIDBI put a financial burden on the banks,
it would bring down the interest load and improve the credit
availability to SMEs. |
