Flow of credit, adequate-timely & low priced to Micro & Small Enterprises both Manufacture and Services, assumes greater importance for its sustainable development. The majority enterprises are Micro most of which are in unorganized sector having a meager finance from Banks, even though they fall in Priority Sector. Priority Sector, it must be noted, has its seeds in the Credit Policy for the Year 1967-68 and besides Agriculture, Exports; the Small Scale Industries [currently MSEs] were included in the list. Lending to this sector really means “Directed Finance” and was confined to Public Sector Banks only upto the Year 1979-80. It was extended to Private Sector Banks thereafter and now all Banks, including Foreign, are to follow Directed Finance to Priority Sector which mainly covers Agriculture, MSEs, Exports, Housing, Education, Weaker Sector, SHGs and so on. The Narasimham Committee of RBI, in the year 1991, recommended phasing out of Directed Finance focusing on small & marginal formers, tiny industries, village & cottage industries, weaker sections by directing ten percent of bank credit to these segments. On 25th August 2011, RBI constituted a Committee under Chairmanship of Shri. M. V. Nair to re-examine extant classification under Priority Sector and also to suggest revised guidelines with regard to lending to it. The Committee has on 21st February 2012 submitted its Report and comments were invited from the stakeholders on the recommendations of the Committee upto 31st March 2012. Though waiting for the new circular of RBI on this subject, it is noteworthy that Nair Committee has favored specific sub-target in lending to Micro Enterprises.