Banks are apprehensive in giving loan to SMES and the future of SMES in Pakistan

Abstract

This paper depicts t he exploratory work on bank' s responses and reactions for an apprehensive approach toward SME' s financing. The study is undertaken between banks and SME's functioning in Islamabad. Banks are unhappy with SME group dynamics; some o f the banks felt that SME contribute to asymmetrical information . I t i s suggested a need to exp lici t ly devising banks strategies to as s ist SME 's . The research is descriptive kind research . And it is based on s econdary and primary da t a ; we take t wo e ntities i . e . banks and SMEs , and we have d e veloped two feedback f orms and conduct discussion mutual l y to analyze their responses in parallel . We have d ifferent contrast i ng factors t hat a r e induced at ma c r o a nd micro echelon . Banks perc eption concer ning t he borrower i s notably affecting the fina nc ing event , than one o f the most critical features of our research is the method used t o enha nce SME and bank relationship and what would b e t he fu t ure of sme after implanting these remedies for SME . The end revealed t hat the majori t y of t he banks were discontented with SME financing. Round the other way SME' s does n't apprec i a t e the i n f lexi b ility o f b a nks . The majority of t he banks a r e mot ivated t o o ffer and have adequate technological support to conduc t procedural requirements, but still development in SME financing is hypothecated to be a secondary meaning .