1 Supply of Finance in Small and Medium Industries of India: A Demand Side Perspective Bandopadhyay, Rumki Venkatesh, Umashankar Abstract: This paper looks at the state of Small and Mid-Sized Enterprises (SME) in India and how crucial it is to the industrial and economic health of the country. It focuses on one of the many challenges that this sector faces in the country, namely the timely and adequate availability of funds to the purveyors of this sector for its nurturance and growth. Based upon in-depth interviews with SME entrepreneurs, this study tries to understand the problems at the ground level and recommendations thereof for the banking and other such service providers. Globally, Small and Medium Enterprises (SMEs) are the principal contributors to the economic development of the societies and regions in which they operate. They may also become global players and hence do get affected by the evolving structures of global trade and industry (Network for Business Sustainability, 2013). In any economy, the SME sector provides the foundation on which the large manufacturing and business sector units depend upon. In emerging markets, this sector provides the much needed opportunity for employment to large sections of the relatively untrained and semi-skilled work force, that otherwise may not have access to means for earning a livelihood. In the Indian context, the SME sector contributes by e mploying approximately 40 percent of the total workforce and accounts for 45 percent of the country’s manufacturing output. On the exports front, a complement of 1.3 million Indian SMEs account for 40 percent of the country’s total exports. India’s SMEs also contribute 17 percent to the