The paper analyses the repayment trends of the two DFIs (BSB and BSRS) over the last decade which is current to 30th June, 1987. Based on data generated through a survey of 511 Industrial projects located in the private sector, the paper provides an adequate basis for evaluating the overall impact of the various policy measures (including legal actions) enacted by successive regimes to expedite the process of loan recovery. The study points to the all pervasive nature of default and proceeds to analyse further the societal implications of the default, the failure of the legal system to enforce recovery and the weaknesses of entrepreneurship. The study stressed the need for reviewing prevailing industrial policy which has failed to transform recalcitrant borrowers into a growth-seeking entrepreneurial class and suggests various remedial measures for immediate policy action.