Qualitative approach towards risk assessment and management - an innovative management tool for sustainable development of micro, small and medium enterprises in India

The micro, small and medium enterprise (MSME) sector occupies a prominent position in Indian economy. This sector offers some unique features like high employment generation capacity, significant contribution to the GDP and foreign exchange earnings of the nation. However, in spite of such benefits, the units in the MSME sector suffer from certain inherent limitations which, coupled with adverse factors external to the units, bring about business failures. The ownership of the MSME units in India is predominantly proprietary and the proprietors are persons with limited resources, knowledge, experience and capability. Such limitations, often coupled with certain external adversities like thin margin, inadequate and delayed financial assistance completion from large industries etc. of the MSME units which exposes the MSME units to a greater threat by adversely affecting the key success factors (KSFs). Where traditional risk management approach cannot meet the mitigation level, there KSFs solving approach can be useful.