Impact of Microfinance Institutions on the growth of Small and Medium Enterprises: a case of Delhi, India

Authors

  • Pallavi Ahuja
  • J. K. Batra

Abstract

SMEs are a growing trend as they are low investment-based enterprises which can engage more people. In some states they are aggressively encouraged by state governments as they provide employment opportunities to a huge portion of the population. SMEs ordinarily are based on producing homegrown items which helps also in retention of the cultural produces. The Ministry of Micro, Medium and Small Enterprises administers their working and creates development programs for all SMEs. The study intends to examine the kind of impact that microfinance institutions (MFIs) have on the growth of small medium enterprises. Apart from gaining an insight into the challenges faced by developing small firms, the study will recognize how MFIs are contributing to the growth of small businesses. This study revolves around the fund requirements of developing rural small and medium size firms, and how microfinance may be contributing to small firms' progress. The same is done by surveying 20 SME owners in Delhi across South and West Delhi. The study first emphasizes on the role of microfinance in the overall growth of SMEs. Then discussion is made regarding the SMEs with high financial threat and lower level of efficiency are more probable to seek microfinance assistance. The respondents were gauged on various characteristic variables including their demographic details, awareness regarding microfinance and their views towards MFI credit. SPSS was used for doing the analysis. Tests like cross tabulation and chi square test were applied. The study recommends that the government and MFIs should ensure that credit is made easily available and affordable to the SMEs.

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Published

2020-04-11

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Articles