MSME ADVANCES-ROOT CAUSE ANALYSIS OF POOR GROWTH & SUGGESTIONS FOR IMPROVEMENT

MSME ADVANCES-ROOT CAUSE ANALYSIS OF POOR GROWTH & SUGGESTIONS FOR IMPROVEMENT

- Vijay Kumarr Shaw

Executive Summary

The Micro, Small & Medium Enterprises (MSME) sector is expected to play a major role in the emergence of the Indian economy. The growth of this segment is extremely crucial to meet the national aspiration of financial inclusion and generation of significant levels of employment across urban, semi urban and rural areas across the country. Further, it can rear and support development of new age entrepreneurs who have the potential to create globally competitive businesses from India. Time and again, Government has given importance to develop this sector by giving all types of helps i.e. technical and financial. Technical part is being looked after by various Government department and advance part is being looked after by Banks, mainly Public Sector Bank.

However, The Government of India is at crossroads these days. On one hand, the projects to augment MSME growth are focused around providing clean access to finance. On the other hand, banks are facing rising trend of stress in MSME. Though, time and again relief has been given to accelerate this sector but this is not a permanent solution. Hence, we have to analyse basic root cause to augment suitable measures by plugging the gap for a sustained growth of MSME sector.

Challenges Faced by MSME Sector Leading to Stress build-up