Micro, Small and Medium Enterprises (MSME), which are credited with generating the highest rate of employment, account for the increased production of industrial output and constitute a major portion of India’s exports. In a small state like Kerala—the state which positions itself as the headquarters of four leading private sector banks and home to a significant percentage of educated and well-accomplished class of people—the role played by MSME units in nurturing an entrepreneurial climate and developing the economy is well appreciated. The socioeconomic development of the state over the past few years has witnessed a progressive change due to the establishment of viable and innovative industrial units. The banks and financial institutions are supporting these units by providing financial assistance and technical guidance. The increasing number of private sector banks in the state has led to tough competition among the banks to capture the customer base. An analysis of the bank branches in Kerala reveals that over the last few years the private sector branches have increased by about 8% every year. It is observed that Catholic Syrian Bank, City Union Bank, Dhanlaxmi Bank, Tamilnad Mercantile Bank,