A detailed study report analyzing balance sheets of 2,000 SMEs for financial Years 2007 and 2008 has been released by ratings agency, Crisil Ltd. The report shows that banks have not really supported the SMEs cause in India.

A financial allocation hike for SMEs from banks is necessary and the report says that banks just provide 60 percent funding to support working capital needs in SME sector. The 60 percent funding creates a gap of Rs 50, 000 crore in financial opportunities. According to RBI, finance allocation by banks for SMEs have been increased from Rs 127,000 crore in 2006 to Rs 369,866 crore in 2010.

It is being believed that SME sector will drive the economic growth of India and present significant opportunity for banks to expand. On lending out to SMEs, commercial benefits shall be derived by the banks.