Access to Institutional Finance for MSMEs: A Descriptive Study of Commercial Banks in India

Abstract : Purpose:The purpose ofthe study is toexamineaccess toinstitutionalfinancefor Micro, Small and Medium Enterprises (MSMEs) in India, with special emphasis on the role played by commercial banks in facilitating credit availability. Methodology:The study adopts a descriptive research design based on secondary datacollected from Reserve Bank of India reports, Ministry of MSME publications, World Bank reports, and relevant research literature. Data are analysed using tables,percentages, and graphical tools. Findings:The study finds that commercial banks have significantly increased institutionalcredit to MSMEs, supported by policy initiatives such as priority sector lending and credit guarantee schemes. However, MSMEs continue to face challenges such as collateral requirements, procedural complexities, and limited financial literacy. Limitations:The study is limited to secondary data and focuses only on commercial banks, excluding NBFCs and informal sources of finance. Implications:The findings provide useful insights for policymakers, bankers, and MSME stakeholders to strengthen institutional credit mechanisms, simplify lending procedures, and enhance financial inclusion in the MSME sector.