Module: General Practice
Q175: Scenario: The "Ganguly Committee" (2004) reviewed the flow of credit to SSIs. One of its key observations related to "SME Clusters."
Question: What was the core recommendation regarding clusters?
✅ Correct Answer: B
The Ganguly Committee strongly advocated the Cluster-based Approach.
Since SMEs often operate in clusters (e.g., Tirupur for textiles, Ludhiana for hosiery), treating the cluster as a unit allows banks to understand the specific risks and cycles of that industry better.
It also reduces transaction costs and allows for the financing of common facility centers.
Since SMEs often operate in clusters (e.g., Tirupur for textiles, Ludhiana for hosiery), treating the cluster as a unit allows banks to understand the specific risks and cycles of that industry better.
It also reduces transaction costs and allows for the financing of common facility centers.