As per the Nayak committee, what percentage of its

Solution

The Nayak Committee was set up by the Reserve Bank of India in December 1991 to review the working capital requirements of small and medium-sized enterprises (MSMEs). The committee recommended that MSMEs should have 20% of their annual projected turnover as working capital.  Note - the working capital requirement of the MSME unit is calculated at 25% of the annual projected turnover. Out of the said Working Capital requirement: • 5% requirement to be met by the borrower from his own sources, and  • the balance 20% to be financed by a lending bank  They also recommended that banks grant working capital to MSMEs, dispose of loan applications in a timely manner, and set up specialized bank branches for MSME loans.