Institutional sources of finance for MSMEs:
There are many Banks and Financial institutions which provide financial assistance to Micro Small and Medium Enterprises and start-ups.
(a) Commercial Banks:
(i) Public sector banks (eg.) State Bank of India, Indian Bank, Indian Overseas Bank, Canara Bank.
(ii) Private sector banks (eg.) ICICI, Axis Bank, City Union Bank, HDFC, Karur Vysya Bank, Tamilnadu Mercantile Bank.
(b) Regional Rural bank:
(eg.) Pandian Rural bank, Pallavan Rural Bank, Vallalar Rural Bank.
(c) Co-operative Banks:
(eg.) TNSC Bank, District Central Co-operative Banks.
(d) Micro Finance Institutions:
(eg.) MUDRABank.
(e) Non-Banking Finance Institutions:
(i) (eg.) National Small Industries Corporation Ltd (NSIC).
(ii) Small Industries Development Bank of India (SIDBI).

In December 2017 there were 45,67,090 SHGs in India. The total number of members in SHGs during the same period stood at 5,02,65,933. at all India level. The five year plans of the government of India has given due recognition to the relevance of the Self-help group concept to implement developmental schemes at the grassroots level.

The Government ofIndia has launched MUDRA Bank with a capital amount of 20,000 crore, and credit guarantee corpus of 3,000 crore, to help Micro Small and Medium Enterprises (MSMEs) and startups to resolve problems relating to financing. MUDRA Bank refinances micro-Finance Institutions through a Pradhan Mantri Mudra Yojana (PMMY).

National Bank for Agricultural and Rural Development (NABARD) has defined Self Help Group as "a homogenous group of rural poor voluntarily formed to save whatever amount they can conveniently save out of their earnings and mutually agree to contribute to a common fund of the group to be lent to the members for meeting their productive and emergent credit needs".

Functions of Self Help Groups:
(i) Developing and enhancing the decision-making capacity of members.
(ii) Increasing general awareness on literacy among members.
(iii) Equipping the poor with basic skills for understanding monetary transactions.
(iv) Maintaining books and registers to ensure Proper Accounts.
(v) Submitting the Accounts for Annual Audit by a Qualified Auditor.
(vi) Providing necessary training in the chosen field.
(vii) Deciding the loan amount to be sanctioned to the group members.