Financing Micro, Small, and Medium Enterprises in Indian Industry

2019 ◽  
pp. 668-680
Author(s):  
Shromona Ganguly
Keyword(s):  
Small Firm ◽  
Small Firms ◽  
Small And Medium Enterprises ◽  
Manufacturing Sector ◽  
Credit Availability ◽  
Firm Financing ◽  
National Output ◽  
Specific Factors ◽  
Employment Generation ◽  
Medium Enterprises

During the last five decades, the micro, small, and medium enterprises (MSME) in the Indian economy have emerged as a dynamic, vibrant segment having a significant contribution towards employment generation and entrepreneurship formation. Despite being an important contributor towards the national output and employment of the economy, the MSME sector continues to face a number of challenges choking its growth, of which credit availability to these enterprises has become one of the most important issues. The existing literature on small firm financing discusses the issues and challenges from a cross-country perspective. There is a lack of detailed research on implications of country-specific factors and financial system on small firm financing. The chapter aims to fill this gap by analyzing the extent and nature of credit constraint faced by small firms in the manufacturing sector in India and how technology may change the situation in the coming years.

Financing Micro, Small, and Medium Enterprises in Indian Industry

2018 ◽  
pp. 6916-6926
Author(s):  
Shromona Ganguly
Keyword(s):  
Small Firm ◽  
Small Firms ◽  
Small And Medium Enterprises ◽  
Manufacturing Sector ◽  
Credit Availability ◽  
Firm Financing ◽  
National Output ◽  
Specific Factors ◽  
Employment Generation ◽  
Medium Enterprises

During the last five decades, the micro, small and medium enterprises (MSME) in the Indian economy have emerged as a dynamic, vibrant segment having a significant contribution towards employment generation and entrepreneurship formation. Despite being an important contributor towards the national output and employment of the economy, the MSME sector continues to face a number of challenges choking its growth, of which, credit availability to these enterprises has become one of the most important issues. The existing literature on small firm financing discusses the issues and challenges from a cross-country perspective. There is a lack of detailed research on implications of country specific factors and financial system on small firm financing. The present essay aims to fill this gap by analysing the extent and nature of credit constraint faced by small firms in the manufacturing sector in India and how technology may change the situation in the coming years.

Analysis of Major Problems Faced by Small Firms in North India

2015 ◽  
Vol 15 ◽  
pp. 150-160
Author(s):  
Davinder Singh ◽  
Jaimal Singh Khamba ◽  
Tarun Nanda
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Economic Development ◽  
Small Firms ◽  
Small And Medium Enterprises ◽  
Developed Countries ◽  
North India ◽  
Small Enterprises ◽  
Employment Generation ◽  
Medium Enterprises

Micro, Small and Medium Enterprises (MSMEs) have been noted to play a significant role in promoting economic growth in less developed countries, developing and also in developed countries. Worldwide, the micro and small enterprises have been accepted as the engine of economic growth of any nation. Small and Medium Enterprises are the backbone of the economies, because it trigger employment, output, export, poverty alleviation, economic empowerment, economic development etc. in developed as well as in developing countries. It is more important to developing countries as the poverty and unemployment are burning problems. MSMEs have been playing a momentous role in overall economic development of a country like India where millions of people are unemployed or underemployed. Therefore, the growth of small sectors is essential for the growth in the GDP, employment generation, total manufacturing production and export. India, being one of the fastest growing economies of the world, needs to pay an honest attention for the utmost growth of MSMEs for its increased contribution in above areas.

scholarly journals Women’s Economic Empowerment in Vietnam: Performance and Constraints of Female-Led Manufacturing SMEs

2021 ◽  
Vol 14 (6) ◽  
pp. 255
Author(s):  
MinhTam Bui ◽  
Trinh Q. Long
Keyword(s):  
Labor Productivity ◽  
Small And Medium Enterprises ◽  
Manufacturing Sector ◽  
Value Added ◽  
Medium Size ◽  
Formal Sector ◽  
Firm Level ◽  
Average Value ◽  
Significant Difference ◽  
Medium Enterprises

This paper identifies whether there was a performance difference among micro, small and medium enterprises (MSMEs) led by men and by women in Vietnam during the period 2005–2013 and aims to provide explanations for the differences, if any, in various performance indicators. The paper adopts a quantitative approach using a firm-level panel dataset in the manufacturing sector in 10 provinces/cities in Vietnam in five waves from 2005 to 2013. Fixed effect models are estimated to examine the influence of firm variables and demographic, human capital characteristics of owners/managers on firms’ value added, labor productivity and employment creation. We found that men led MSMEs did not outperform those led by women on average. Although the average value added was lower for female-led firms in the informal sector, the opposite was true in the formal sector where women tend to lead medium-size firms with higher value added and labor productivity. The performance disparity was more envisaged across levels of formality and less clear from a gender perspective. Moreover, while firms owned by businessmen seemed to create more jobs, firms owned by women had a higher share of female employees. No significant difference in business constraints faced by women and by men was found.

scholarly journals Factors influencing location choice and cluster pattern of manufacturing small and medium enterprises in cities: evidence from Khulna City of Bangladesh

2019 ◽  
Vol 9 (1) ◽  
Author(s):  
S. M. Towhidur Rahman ◽  
Ahsanul Kabir
Keyword(s):  
Small And Medium Enterprises ◽  
Location Choice ◽  
Cluster Formation ◽  
Personal Factors ◽  
Location Selection ◽  
Community Factors ◽  
Multiple Case ◽  
Specific Factors ◽  
Medium Enterprises ◽  
Cluster Pattern

AbstractThis study aims to identify the location and cluster pattern of manufacturing SMEs in Khulna City and the reasons behind such pattern since localisation of SMEs has significant impact on the economic development of cities and regions. A walking survey was conducted to identify the SME location pattern and a semi-structured personal interview was conducted to collect data from manufacturing SME entrepreneurs to find why such patterns exist. A cross section qualitative multiple case study design and pattern matching technique was applied to answer the research questions. The finding of the study shows SME location choice was influenced by a combination of location specific, personal, and community factors whereby personal factors are prioritised over other factors in location selection. While the cluster formation or localisation of SMEs depends on only location-specific factors. The study findings are expected to contribute in urban planning and regional development through providing useful insights relating allocation of spaces for industry development.

scholarly journals Corporate parents, initial legitimacy, and resource acquisition in small and medium firms: An empirical examination

2011 ◽  
Vol 14 (1) ◽  
pp. 23-34 ◽  
Author(s):  
Gregory Murphy ◽  
Neil Tocher
Keyword(s):  
Firm Size ◽  
Small Firms ◽  
Small And Medium Enterprises ◽  
Empirical Test ◽  
Resource Acquisition ◽  
The Internet ◽  
Empirical Examination ◽  
Credit Scores ◽  
Medium Enterprises ◽  
Medium Firms

Small and medium enterprises (SMEs) commonly struggle to acquire needed financial, human, and technological resources. The above being stated, recent scholarly research argues that SMEs that are able to successfully navigate the legitimacy threshold are better able to gather the resources they need to survive and grow. This article provides an empirical test of that claim by examining whether the presence of a corporate parent positively influences SME resource acquisition. Results of the study show that SMEs with corporate parents, when compared to like-sized independent SMEs, have higher credit scores, have more complete management teams, use more computers, and are more likely to be on the Internet. These differences are most pronounced for very small firms and diminish in significance as firm size increases. Study implications include the notion that presence of a corporate parent likely represents a successful navigation of the legitimacy threshold, positively increasing SME resource acquisition.

Borrower Discouragement: Loan Delays and Loan Rejection: Evidence from MSMEs in the State of Assam in India

2020 ◽  
Vol 47 (2) ◽  
pp. 95-103
Author(s):  
Rashmi Sarda ◽  
Devi Baruah
Keyword(s):  
Regional Development ◽  
Small And Medium Enterprises ◽  
Export Promotion ◽  
Vital Role ◽  
The State ◽  
Bank Credit ◽  
Small And Medium Enterprise ◽  
Medium Enterprise ◽  
Employment Generation ◽  
Medium Enterprises

In India micro, small and medium enterprises (MSMEs) play a vital role in the development of economy through their contribution to GDP, employment generation, regional development, export promotion, etc. Irrespective of the achievements of the small and medium enterprise (SME) sector, there are certain issues which eclipse desired growth. Availability of ample and timely credit at reasonable rate of interest is vital for the development of these sectors. There seems to be a gap between demand for and supply of the bank credit to SMEs. The delay in processing of credit and the rate of rejections discourage the borrowers from applying for credit. Hence, this article aims to analyse the discouragement faced by MSME loan applicants from the evidence of rejections and delays in advancing loans in Jorhat district in the state of Assam in India.

Internationalization barriers of SMEs from developing countries: a review and research agenda

2020 ◽  
Vol 26 (6) ◽  
pp. 1281-1310 ◽  
Author(s):  
Ashna Chandra ◽  
Justin Paul ◽  
Meena Chavan
Keyword(s):  
Developing Countries ◽  
Design Methodology ◽  
Web Of Science ◽  
Small And Medium Enterprises ◽  
Future Research ◽  
Research Gaps ◽  
Content Type ◽  
Factors Influencing ◽  
Specific Factors ◽  
Medium Enterprises

PurposeThis paper reviews the literature on internationalization barriers of small and medium enterprises (SMEs) from developing countries. The purposes of the study are: (1) to explicitly point out specific factors influencing the growth and internationalization of SMEs from developing countries and (2) to identify the research gaps to provide lucid and succinct directions for future research in this area.Design/methodology/approachThe authors selected relevant papers from journals listed on Web of Science and Scopus databases.FindingsIt was found that there are large number of questions remain unanswered regarding the internationalization of SMEs from developing countries regarding the factors determining their growth and internationalization.Originality/valueThis review distinctively accentuates previous studies on such barriers influencing the growth of SMEs from developing countries and systematically synthesize the issues faced by those SMEs. Thus, the authors seek to provide a comprehensible platform for researchers working in this area.

scholarly journals The Causal Effect of Access to Finance on Productivity of Small and Medium Enterprises in Vietnam

2019 ◽  
Vol 11 (19) ◽  
pp. 5451 ◽  
Author(s):  
Mai Huong Giang ◽  
Bui Huy Trung ◽  
Yuichiro Yoshida ◽  
Tran Dang Xuan ◽  
Mai Thanh Que
Keyword(s):  
Financial Services ◽  
Small And Medium Enterprises ◽  
Manufacturing Sector ◽  
Causal Effect ◽  
Bank Loan ◽  
Firm Productivity ◽  
Function Estimation ◽  
Access To Finance ◽  
The Government ◽  
Medium Enterprises

In many developing countries, obtaining financial services at affordable rates and fair terms has been a significant challenge for small and medium enterprises (SMEs). However, this issue has not been paid much attention in Vietnam, even though SMEs account for about 95% of total enterprises and the financial market of the country has not been well developed. This study investigates the causal effects of access to finance on productivity of SMEs operating in the manufacturing sector in Vietnam. Productivity was measured as the total factor productivity (TFP) obtained by production function estimation using the Levinsohn and Petrin approach. Regarding financial accessibility, two factors covered the extent to which firms might have a bank loan or overdraft facility were employed. To study the causal inferences of access to finance on firm productivity, the research adopted the difference-in-differences (DID) approach, as well as the propensity score matching (PSM) coupled with DID technique. The empirical results indicated that improving the financial accessibility could directly enhance firm productivity. Particularly, it was shown that firms having access to a bank loan could significantly improve TFP by approximately 8.6% in the DID model and about 9% in the PSM-DID model. Meanwhile, the firm average TFP increased by approximately 12.3% and 15.7% in simple DID and PSM-DID models, respectively, when firms had an overdraft facility. These findings suggest that the government should put more effort into assisting SMEs in generating bankable projects, and create a sound and healthy financial environment to stimulate firms’ access to finance, which will ensure their sustainability and growth.

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