Banks taxing MSMEs

If Trend of disintermediation continues, it will leave much of the "tax" burden on MSMEs

As banks increased their margins to compensate for the stress on balance sheet, good borrowers shifted to bond market. However, this has left small and micro borrowers who are heavily dependent on banks getting taxed by them. “… if this trend of disintermediation continues (loan market shifting to bond route), it will leave much of the “tax” burden on MSMEs, who can’t decamp for the bond markets, since they require the knowledge intensive type of lending that is provided only by banks,” the Survey said. “This trend may also pose risks for the banks themselves, who risk being left with