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not a loan

For small companies struggling for credit, money finds a way

Think non-performing assets. Think banks under tremendous pressure. Think credit squeeze. Think small and medium enterprises. Think, well, tough deadlock, but what next?

01/05/18

Sidhartha Shukla

Indian MSMEs have been credit-starved for far too long

Around 90% of MSMEs are dependant on informal sources to meet their credit demand

MSMEs have found a welcome source of liquidity, and that too at a fair price in TReDS exchanges

The risk is now transferred from a weak seller to a strong buyer

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For years, Indian banks granted huge unsecured loans to large companies, sweeping the mess of distressed assets under the rug and hoping it would somehow resolve itself. This mess has now reached gargantuan proportions. The gross non-performing assets (NPAs) of the entire banking sector now stands at Rs 8.41 lakh crore (~$126 billion).

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