There has been a special thrust on the Small and Medium Enterprise (SME) sector and retail segments for extending credit on a large scale by the banks. The article covers the steps followed by the banks in the appraisal of an entrepreneur.

An entrepreneur is one who starts from a clean canvas, possesses inherent entrepreneurial qualities, is ready to take risks with an eye on reward/profit, and is the boss who generates employment for others The largest supplier of funds to the entrepreneur community, unquestionably, is the bank. Credit to small units was never a constraint.

Banks are competing with each other in extending credit to more ventures and units. With an increase in the number of Small and Medium Enterprises (SMEs) and Small Scale Industries (SSIs), and with Indian Government's stress on lending to this sector, banks are extending liberal credit to this sector. Naturally, an entrepreneur interested in starting off should know the following (Refer Box 2).

Based on the principles of lending, it is only natural and customary to expect the bank to lend to entrepreneurs who are creditworthy, having the capacity to repay the borrowed funds with interest on time. In the process of lending, the banker expects the entrepreneur to possess certain important qualities and traits. A list of such traits is given in Table.

Professional Banker Magazine, Entrepreneur, Small and Medium Enterprise , SME, Small Scale Industries , SSIs, Small Industries Development Bank of India, SIDBI, Credit Guarantee Fund Trust for Small Industries , CGFTSI, World tread organisation, WTO.