Finance for Micro, Small, and Medium-Sized Enterprises in India: Sources and Challenges
Singh, Charan; Wasdani, Kishinchand Poornima | July 2016
Abstract
Finance for micro, small, and medium-sized enterprises (MSMEs) has been a concern for all stakeholders including entrepreneurs, financial institutions, and government organizations. The key objective of the study was to identify various challenges faced by MSMEs in sourcing of finance during different stages of their life cycle. This study is a first-of-its-kind attempt to focus on these aspects. The study further explores whether the financial awareness of MSME entrepreneurs is a major limitation in the identification and utilization of sources of finance. Data was collected through personal interviews using a structured questionnaire from a sample of 85 MSMEs. The survey was conducted mainly in the city of Bangalore covering a wide spectrum of sectors like precision tools, weavers, jewelers, food retailers, metal works, textiles, and book shops. The results reinforce the findings of other studies that utilization of formal sources like banks is significantly small compared with informal sources like personal and family wealth. The study found that the main challenges faced in underutilization of formal sources were inadequacy of collateral assets and lack of financial awareness of entrepreneurs. Based on the conclusion that requirement of finance differs with the life-cycle stage of the MSME, recommendations have been proposed for entrepreneurs, financial institutions, and policy makers.
Citation
Singh, Charan; Wasdani, Kishinchand Poornima. 2016. Finance for Micro, Small, and Medium-Sized Enterprises in India: Sources and Challenges. © Asian Development Bank Institute. http://hdl.handle.net/11540/6618.Keywords
Development assistance
ADB
Curriculum development
Development assistance
Development aid
Development indicators
Development potential
Development models
Project appraisal
Performance appraisal
Economic development
Economic indicators
Government programs
Economic growth
Economic policy
Industrial development
Industrial policy
Technology assessment
Economic evaluation
Economic forecast
Input output analysis
Comprehensive Development Framework
Development Challenges
Development Planning
Millennium Development Goals
Policy Development
Program Evaluation
Performance Evaluation
Evaluation Criteria
Capital Market Development
Development Economics
Financial Sector Development
Technology Development
World Development Indicators
Evaluation Methods
Communication in rural development
Communication in community development
Infrastructure
Central planning
Endowment of research
Partnership
Joint venture
Nation-building
Risk assessment
Economic development projects
Economic forecasting
Industrial research
Participatory monitoring and evaluation
Economic policy
Economic forecasting
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