Purpose: The research intends to study the reason(s) that why do co-operative banks finance the SMEs with fewer formalities or documentation despite the fact that they are smaller institutions than the commercial banks • Design: To study this, exploratory research design would be used, taking into consideration, primary data would be collected from the professionals like Bankers • Finding: Co-operative banks check the business plan, establishment of the business and they consistently check the

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... rofitability of the business. They also rely on the credit ratings, given by the credit agencies and thus, lend to the SMEs with fewer formalities • Originality/ Value: Until now, researchers have not looked upon the reason(s) for the fewer formalities carried out by cooperative banks to lend to the SMEs • Keywords: Co-operative banks, Development of SMEs, Interest Rates, Financing I.