The health of the economy of any country mostly depends upon the nature and functioning of its business and consumer market. Businesses are the entities that provide products, goods and services needed by the society and these are the unit that determine the future of any economy. matter whether the business is small scale or being operated at a larger degree, it is considered as a unit in forming a backbone of the economy .Small scale businesses are getting immense important and significant in terms of their contribution to the economy. They provide economic output, generate employment opportunities, economic disparity, improve standard of living , exports etc. Hence every government tries to give some kind of special benefits to this sector in the form of small businee banking. One such incentive is the provision of small business banking facilities and opportunities for the small scale businesses.
The idea behind the establishment of small business banking division in banks raised from the need of strengthening the SMEs sector. Since last few years, various banks have been introducing small business banking in the form of various financial products, easy installment loans and credit facilities. Financial institutions have also been providing various financial opportunities for the small scale businesses to meet their capital needs. Since small scale businesses generally require capital for their production, growth and extension, banks focus on such facilities that can meet their needs.
It is observed that during last few years, the trends within small scale business industry have been positive and showing higher growth. The financial needs and requirements of small scale businesses are increasing. They want financial support and easier banking services. One of the steps taken by government in this regard is the establishment of separate banks for SMEs that not only make banking easier for the small scale businesses but also make credit facilities easily accessible. These banks charge low interest rate and provide the benefit of lower installments. Other banks also contributing in the SMEs sector by providing them leverages in account opening and account keeping, availability of short and long term agricultural loans, leasing opportunities for land and vehicles, insurance needs and easy loan offerings. Banks also provide free financial consultancy for small scale businesses and this is of much help for the SMEs.
Tips and comments
When going for availing banking services, small scale business unit must take into consideration its requirements and needs and then choose the bank that can fully satisfy those needs. This analysis is very much important since different banks offer different rates and hence choosing the wrong bank may result in paying higher repayments and eventually increased cost. Further, banks also invite small scale businesses to invest their revenues to get return on that. By such small business banking facilities, small scale businesses can increase their wealth in a secured manner.
Small business banking are flourishing with the passage of time. SMEs are facing the increasing need of capital and financial advice and support thus banks must further come forward to introduce more flexible and convenient banking opportunities for small scale businesses.