Micro, Small and Medium Enterprise Finance in India : A Research Study on Needs, Gaps and Way Forward

This study aims to provide an assessment of the Micro, Small and Medium Enterprise sector (MSME) finance in India. The chapters in the study highlight the key characteristics of the MSME sector, and assess the demand for, and the flow of finance in...

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Main Author:	International Finance Corporation
Format:	Working Paper
Language:	English en_US
Published:	International Finance Corporation, New Delhi 2017
Subjects:	SMEs ENTERPRISE FINANCE MICROFINANCE MSMEs MICROENTERPRISE SMALL AND MEDIUM ENTERPRISE DEBT FINANCE EQUITY FINANCE REGULATION LEGAL FRAMEWORK RISK MANAGEMENT INFRASTRUCTURE FINANCIAL INSTITUTIONS
Online Access:	http://documents.worldbank.org/curated/en/833391492755845785/Micro-small-and-medium-enterprise-finance-in-India-a-research-study-on-needs-gaps-and-way-forward http://hdl.handle.net/10986/26553

id	okr-10986-26553
recordtype	oai_dc
spelling	okr-10986-265532021-04-23T14:04:36Z Micro, Small and Medium Enterprise Finance in India : A Research Study on Needs, Gaps and Way Forward International Finance Corporation SMEs ENTERPRISE FINANCE MICROFINANCE MSMEs MICROENTERPRISE SMALL AND MEDIUM ENTERPRISE DEBT FINANCE EQUITY FINANCE REGULATION LEGAL FRAMEWORK RISK MANAGEMENT INFRASTRUCTURE FINANCIAL INSTITUTIONS This study aims to provide an assessment of the Micro, Small and Medium Enterprise sector (MSME) finance in India. The chapters in the study highlight the key characteristics of the MSME sector, and assess the demand for, and the flow of finance into the sector. The study also evaluates the consequent gap in the financing needs of MSMEs. Finally, it explores potential interventions to address the lack of access to formal finance for MSMEs. The Micro, Small and Medium Enterprise sector is crucial to India’s economy. There are 29.8 million enterprises in various industries, employing 69 million people. The sector includes 2.2 million women-led enterprises (~7.4 percent) and ~15.4 million rural enterprises (51.8 percent). In all, the MSME sector accounts for 45 percent of Indian industrial output and 40 percent of exports. Although 94 percent of MSMEs are unregistered, the contribution of the sector to India’s GDP has been growing consistently at 11.5 percent a year, which is higher than the overall GDP growth of 8 percent. Poor infrastructure and inadequate market linkages are key factors that have constrained growth of the sector. The lack of adequate and timely access to finance has been the biggest challenge. The financing needs of the sector depend on the size of operation, industry, customer segment, and stage of development. Financial institutions have limited their exposure to the sector due to a higher risk perception and limited access of MSMEs to immovable collateral. 2017-05-09T17:13:48Z 2017-05-09T17:13:48Z 2012-11 Working Paper http://documents.worldbank.org/curated/en/833391492755845785/Micro-small-and-medium-enterprise-finance-in-India-a-research-study-on-needs-gaps-and-way-forward http://hdl.handle.net/10986/26553 English en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo International Finance Corporation International Finance Corporation, New Delhi Publications & Research Publications & Research :: Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	SMEs ENTERPRISE FINANCE MICROFINANCE MSMEs MICROENTERPRISE SMALL AND MEDIUM ENTERPRISE DEBT FINANCE EQUITY FINANCE REGULATION LEGAL FRAMEWORK RISK MANAGEMENT INFRASTRUCTURE FINANCIAL INSTITUTIONS
spellingShingle	SMEs ENTERPRISE FINANCE MICROFINANCE MSMEs MICROENTERPRISE SMALL AND MEDIUM ENTERPRISE DEBT FINANCE EQUITY FINANCE REGULATION LEGAL FRAMEWORK RISK MANAGEMENT INFRASTRUCTURE FINANCIAL INSTITUTIONS International Finance Corporation Micro, Small and Medium Enterprise Finance in India : A Research Study on Needs, Gaps and Way Forward
description	This study aims to provide an assessment of the Micro, Small and Medium Enterprise sector (MSME) finance in India. The chapters in the study highlight the key characteristics of the MSME sector, and assess the demand for, and the flow of finance into the sector. The study also evaluates the consequent gap in the financing needs of MSMEs. Finally, it explores potential interventions to address the lack of access to formal finance for MSMEs. The Micro, Small and Medium Enterprise sector is crucial to India’s economy. There are 29.8 million enterprises in various industries, employing 69 million people. The sector includes 2.2 million women-led enterprises (~7.4 percent) and ~15.4 million rural enterprises (51.8 percent). In all, the MSME sector accounts for 45 percent of Indian industrial output and 40 percent of exports. Although 94 percent of MSMEs are unregistered, the contribution of the sector to India’s GDP has been growing consistently at 11.5 percent a year, which is higher than the overall GDP growth of 8 percent. Poor infrastructure and inadequate market linkages are key factors that have constrained growth of the sector. The lack of adequate and timely access to finance has been the biggest challenge. The financing needs of the sector depend on the size of operation, industry, customer segment, and stage of development. Financial institutions have limited their exposure to the sector due to a higher risk perception and limited access of MSMEs to immovable collateral.
format	Working Paper
author	International Finance Corporation
author_facet	International Finance Corporation
author_sort	International Finance Corporation
title	Micro, Small and Medium Enterprise Finance in India : A Research Study on Needs, Gaps and Way Forward
title_short	Micro, Small and Medium Enterprise Finance in India : A Research Study on Needs, Gaps and Way Forward
title_full	Micro, Small and Medium Enterprise Finance in India : A Research Study on Needs, Gaps and Way Forward
title_fullStr	Micro, Small and Medium Enterprise Finance in India : A Research Study on Needs, Gaps and Way Forward
title_full_unstemmed	Micro, Small and Medium Enterprise Finance in India : A Research Study on Needs, Gaps and Way Forward
title_sort	micro, small and medium enterprise finance in india : a research study on needs, gaps and way forward
publisher	International Finance Corporation, New Delhi
publishDate	2017
url	http://documents.worldbank.org/curated/en/833391492755845785/Micro-small-and-medium-enterprise-finance-in-India-a-research-study-on-needs-gaps-and-way-forward http://hdl.handle.net/10986/26553
_version_	1764462183845986304

Micro, Small and Medium Enterprise Finance in India : A Research Study on Needs, Gaps and Way Forward

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