MICRO, SMALL AND MEDIUM ENTERPRISES INITIATIVES AND FINANCING TRENDS

Jagadeesh, Munivenkatappa
2016 International Journal of Management and Social Science Research Review   unpublished
Micro, Small and Medium Enterprises (MSMEs) are the most dynamic and significant organs of an economy. In addition to creating sizeable number of jobs for the working population of a country, MSMEs contribute to Exports revenue as well as Gross Domestic Product to a reasonable extent. The purpose of this paper is to attempt recalling official definition of MSMEs in India, underpinning their economic significance, government initiatives in their regard, their problems and financing issues, and
more » ... ncing issues, and the trends in bank financing MSMEs in India. Using secondary data from various official sources, the study presents its findings in the form of tables and graphs. It identified a high positive correlation between gross output from MSMEs and (i) GDP at market prices, as well as (ii) GDP from public sector. The economic implications of MSMEs in terms of jobs created, its contribution to GDP, export performance, and capital formation in fixed assets are identified and interpreted, thus underlining the significant contributions of MSMEs to Indian Economy. It identified number of schemes implemented by governments (both federal and regional). While access to finance, infrastructure, marketing, training and education, and regulatory burden have been acknowledged as sum of the major problems faced by MSMEs impeding their growth, financing issues are found to be mushrooming and form a core of the problems. Finally the paper studies the trend of bank financing to MSMEs in India, which indicated an average 21.72% in Total Bank Credit in the recent 7 years from 2007 to 2014. It concludes by emphasizing the need to enhance bank funding to MSMEs.
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