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Crisis grips SMEs as banks deny loans
By siliconindia
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Saturday, 18 October 2008, 16:59 IST
Mumbai: While the industry leaders are scraping through the liquidity crunch, it is the small medium enterprises (SMEs) who have to face the real music as banks deny loans. "The immediate impact of what is happening in the financial markets will be felt by the SME sector more than the large corporate, as they are more vulnerable," says Manish Kothari, Executive Vice President, emerging business group of Kotak Mahindra Bank.
Apart from denying loans, the banks are also resorting to call money rates (rates at which banks lend to one another) which go as high as 12 to 14 percent. As a result the SMEs, who saw a considerable increase in their growth, are gradually slowing down. But there are some who asserts that there has been no trouble in acquiring loans. One of them is Jayen R Shah of Mumbai based Fine Organics, who has raised 
50 crores through PSU banks.
Even, according to Times of India, the country's public bank State Bank of India, denies any such slowdown in the lending part though it agrees that the rate of interests have surged. The bank has advanced 40 percent of its lending to the priority sectors including SME, educational loans and housing loans.
50 crores through PSU banks.
Even, according to Times of India, the country's public bank State Bank of India, denies any such slowdown in the lending part though it agrees that the rate of interests have surged. The bank has advanced 40 percent of its lending to the priority sectors including SME, educational loans and housing loans.