Micro, small and medium Enterprises (MSMEs) play a significant role in social and economic development of a country. MSMEs constitute an important segment of the Indian economy in terms of their contribution to the country’s industrial production, exports, employment and entrepreneurial base. However, one of the greatest obstacles to the growth and development of MSMEs in industrialised and emerging economies is the access to formal finance. The Government of India has taken several measures to ensure continuous growth of MSMEs, but lack of finance has caused a lot of sickness in the sector. Therefore, an attempt has been made to study the relationship between Credit Flow by Scheduled Commercial Banks (SCBs) and Growth of MSME sector in India using Regression Analysis. The study proceeds with the comparative analysis of the Credit Flow to MSMEs by Domestic SCBs in two states of India, that is, Punjab and Haryana.
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