Small and medium enterprises are essential for dynamic economic growth and job creation. The sector has, however, been hit hard by the current downturn with credit growth slowing and demand falling in both domestic and export markets. As access to finance for this sector is key, the World Bank has, in September 2009, agreed to extend budgetary support of $2 million to the Government of India to help public sector banks expand credit for SME, as well as for the development of infrastructure and the rural economy. Moreover, in June 2009, the World Bank provided additional financing of $400 million to the Small Industries Development Corporation of India (SIDBI) to assist India’s SME sector through the financial crisis.
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