Problems Faced by the Indian MSME due to COVID-19 Pandemic: Empirical Evidence

Abstract

COVID-19 (COV) pandemic has brought many misfortunes to the economies of the country. Industries were shut down due to lockdown; production was stopped, which affected their profit margins. Many Micro, Small, and Medium Enterprises (MSME) had to close their operations permanently due to lack of funds and lack of labor force. This research is being conducted to study the MSME’s problems due to this pandemic crisis. Five problems have been identified from the available literature. These five problems are lack of transportation facilities, non-availability of raw materials, deficiency of cash flow, lack of manpower, and local law enforcement. The data is collected in the MSME sector of the country. The target population are the employees working in those industries. After collecting data, we have used exploratory factor analysis and structural equation modeling using the software SPSS 22.0 and AMOS 20.0. The result showed that all the proposed hypotheses got accepted. The model fit parameters are within the threshold level. This study also provides recommendations for the MSME sector to revive the COV pandemic situation.