Small and Medium Enterprises are the driving force for the promotion of an economy. Due to its significance, all the countries either, developed or developing, are concentrating on the development of SME‟s. It is admitted fact that encouraging entrepreneurship is a key to improve competitiveness, boost trade volume, fostering economic activities and creation of job opportunities. Small enterprises are considered as main driver for innovation, poverty reduction, employment generation and social integration. Moreover, Access to finance is necessary to create an economic environment that enables SMEs to grow and prosper. The purpose of the study was to evaluate the extent of SME financing by commercial banks, micro financial institutions and credit unions in India. And it was hypothesized that there is a positive relationship between Institutional finance and SME growth. The study adopted a positivist (quantitative paradigm) with a cross sectional design. The findings in respect of the main purpose of the study indicated that a financial institution makes significant contribution to the growth and development of SMEs. Most of the findings proves that the SME owner‟s perception towards lending still remain as an issue. This study finds it as one of major reason for the lack of credit demand. So this study also aims to shed some light on the importance of entrepreneurial training, mutual loan guarantee schemes and also the effective implementation and monitoring of government measures in SME lending. To consult more Economic essay sample, please see at Bộ Luận Văn Thạc Sĩ Kinh tế | Master Thesis in Economics: Financial institutions have not assisted in the development and growth of small and medium scale industries in India
