SMEs want cheaper finance: Survey

Domestic small and medium enterprises have demanded single window clearances, easier availability of finance at cheaper interest rates, better infrastructural facilities and waivers and incentives for technological advancements.

The demands were part of a survey, released today, conducted by State Bank of India and the Confederation of Indian Industry (CII) on "analysing success and failure factors for small and medium enterprises (SMEs)". AC Nielsen also consulted the survey team.

The survey covered approximately 500 SMEs, out of which 70 per cent wanted specialised local SME bank branches.

Over half of the 500 SMEs covered emphasised the need to address cumbersome documentation procedures, whereas 20 per cent raised the issue of a high collateral requirement.

In spite of all banks and financial institutions focussing to increase lending to SMEs, roughly 20 per cent still depend on friends and private parties for finance.

The survey has recommended that banks must develop better understanding of financial requirements of SMEs.

It has also been suggested that banks could assist SMEs in obtaining government clearances and devise products for start-up projects as well.