THE IMPACT OF MICROFINANCE ON THE MSMES SECTOR

Abstract

Finance for micro, small and medium size enterprises (MSME’S) has been a concern for all stakeholders including entrepreneurs, financial institutions and government organisations. (Charan et al., 2016) The key objective of this present study is to identify various challenges faced by MSME’s in sourcing finance. The Micro Finance Institution has been conducting a variety of services to assist the financial and non- financial needs of the MSME's entrepreneurs including credit, saving, leasing, insurance facilities and training programs. This survey was conducted in Ahmedabad and Mehsana covering a wide range of sectors like jewellers, retailers, metal works, textiles, book shop, tailor and small manufacturing units. The researcher has used both primary and secondary data. The primary data were collected with the help of a questionnaire in the Google form. The sample size of this particular study is 34 respondents. This little research exists that examines the role of financial institutions, banks and microfinance institutions, on the growth of micro, small and medium enterprises in Gujarat, especially Ahmedabad and Mehsana. The study found that the main challenges faced by MSME’s in underutilization are lack of financial awareness and lack of the tools to evaluate projects that need to be implemented by MSME’S.