Borrower Discouragement: Loan Delays and Loan Rejection: Evidence from MSMEs in the State of Assam in India

Abstract

In India micro, small and medium enterprises (MSMEs) play a vital role in the development of economy through their contribution to GDP, employment generation, regional development, export promotion, etc. Irrespective of the achievements of the small and medium enterprise (SME) sector, there are certain issues which eclipse desired growth. Availability of ample and timely credit at reasonable rate of interest is vital for the development of these sectors. There seems to be a gap between demand for and supply of the bank credit to SMEs. The delay in processing of credit and the rate of rejections discourage the borrowers from applying for credit. Hence, this article aims to analyse the discouragement faced by MSME loan applicants from the evidence of rejections and delays in advancing loans in Jorhat district in the state of Assam in India.

Keywords

Small and medium enterprises bank lending delays and rejections

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