Struggles of Rural Micro, Small and Medium Enterprises for Bank Finance: Role of District Industries Centres in India

Abstract

MSMEs are particularly important for emerging countries, primarily because of their potential in job creation. The MSEs are more than just GDP earners; they are instruments of inclusive growth which touch upon the lives of the most vulnerable, marginalised, women and the most skilled. Being the largest source of employment after agriculture, the MSE sector in India enables 650 lakh people. MSEs also act as ancillary industries for large scale industries. Yet, lack of access to finance is a major obstacle to their growth. In addition to limited development of industries in NER, there is limited availability of data on whatever industries exist there. Around 54% of industrial units are concentrated in Assam among NE states. There were 37,356 registered MSME units in Assam provid- ing employment to 2.05 lakh persons till the end of March 2013. The SLBC data showing the credit disbursals towards MSME sector by commercial banks inAssam do not show a favourable picture. Formal lending sector is always preferred over informal sector by the MSMEs. The study aims to find out the characteristics of MSMEs operating under rural villages in Assam and also the various problems encountered by them in obtaining finance from banks .