Karnataka state financial corporation and industrial development in Karnataka: A micro level analysis

Karnataka State Financial Corporation (KSFC) provides finance to industries. The SFCs were established with the purpose of promoting the growth of small, medium and large-scale industries in the country in order to augment the growth of industries and make the nation self-sufficient. They play a major role in the industrial development of regions. KSFC has been providing finance, technical know-how, etc., to the small and medium-scale industries in the states. The main objective of the study is to analyze the performance of Karnataka State Financial Corporation's (KSFC) in giving financial assistance to Small-Scale Industries (SSI) in liberalized era. The study is analytical in nature, throwing light on the financing pattern of SSI sector by KSFC, covering year-wise, type-wise, industry-wise, constitution-wise, and size-wise and district-wise credit sanctions and disbursements in Karnataka. KSFC has failed in its objective of balanced development, as most of the sanctions have been made only to a few districts of Karnataka and a small share of the total amount sanctioned has gone to the backward districts. Moreover, the percentage share of arrears is increasing and recovery ratio is decreasing year-by-year.