Why the MSME loan crisis?

A recent RBI study says that there are 63 mn MSME units in India, employing over 11 crores persons and contribute to 30 % of our GDP. This sector also contributes to 45% of our manufacturing output and to 40% of our total exports. But then this is the small industries sector and it thus has no voice and no say in policy making and legislation. The MSMEs battle an oppressive environment, where the big business houses rule over them, letting them survive and not thrive. Over 97% of these units work in the informal sector and are India’s response to the dearth of jobs, where the youth venture out on their own in a never say die spirit.Despite its preeminence, this sector yet faces huge difficulties and hurdles in accessing bank loans and credit, which is critical for their survival and growth. Why is it so? Mr Akhilesh Bhargava, Business Editor of HW Business and Finance, shares his insights on the matter.