Problems Related to the Financing of Small Firms in India

Micro-Small and Medium Enterprises (MSMEs) contribution is highly remarkable in the overall industrial economy of the country. In recent years, the MSME sector has consistently registered higher growth rate compared to the overall industrial sector. In the Indian market, MSME’s rapid growth could be seen as Indian entrepreneurs are making remarkable progress in various Industries like Manufacturing, Precision Engineering Design, Food Processing, Pharmaceutical, Textile & Garments, Retail, Agro and Service sector. MSMEs complement large industries as ancillary units and contribute enormously to the socioeconomic development of the country. However, MSME’s contribution is phenomenal in the growth of Indian economy, simultaneously; they are facing intense pressure and constraints to sustain their competitiveness in a globalized world. Some other issues such as the recession, low demand, finance, heavy competition from MNCs etc. are becoming exposed problem to MSMEs in India. The availability of external finance for them is a topic of significant research interest to academics and an important issue to policy makers around the globe. Therefore, in present work an attempt has been made to identify the problems related finance of MSMEs.