How Effective is Formal Financing for the MSME Sector? A Case Study of Uttar Pradesh
Creators
- 1. Department of Economics, Faculty of Behavioral and Social Sciences, Manav Rachna International Institute of Research and Studies
Description
Abstract: Finance is the most vital element required for the growth engine of MSMEs to work smoothly. Access to finance remains an issue to recapitulate as MSMEs are lacking in on this parameter immensely. The objective of the study is to find out the effectiveness of formal financing for the entrepreneurs of MSME units. The study tries to explore the knowledge of MSME units for formal financing, and effectiveness of these formal sources of finance for loan procurement of MSMEs. The study has focused into effectiveness of SIDBI as the principal financial institution for formal financing, for the state of Uttar Pradesh. The survey was mainly conducted in prominent cities of Uttar Pradesh like Lucknow, Kanpur, Moradabad, and Varanasi etc. Different MSME units were contacted for data collection. Prominent among them were, ancillary units making spare parts for TELCO in Lucknow, to plastic making and handicrafts industry in Varanasi, leather industry in Kanpur. The area of study comprises industrial cities of Uttar Pradesh.
Keywords: Formal Financing, MSME, Effectiveness
JEL Classification Numbers: O16, L11, G29
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