FINANCING THE FUTURE: EXAMINING CHALLENGES AND SOLUTIONS FOR MSMES IN INDIA

Abstract

In India, MSMEs offer the second highest employment next to agriculture. Also, their contribution to GDP is phenomenal. However, due the diversity in many aspects, they suffer from a multitude of problems when it comes to running them. Among them having access to finance plays a very key role. This review paper tries to identify the key challenges with respect to procurement of finance by exploring the literature available pertaining to Indian MSMEs and credit offered to them. Along with the identification of challenges, the paper also tries to explore the schemes offered to MSMEs to combat the funding challenges faced by them. Towards conclusion, a set of recommendations for the three key players of Indian MSMEs: the Policymakers, the Financial Institutions and the MSMEs themselves are provided.