ZENITH International Journal of Business Economics & Management Research
Year : 2017, Volume : 7, Issue : 10
First page : ( 116) Last page : ( 124)
Online ISSN : 2249-8826.

Credit adequacy and repayment behavior of MSMES

Dr. Siddiqui Mateen Ahmed

Professor, Deccan School Of Management, Hyderabad

Online published on 14 December, 2017.

Abstract

Credit is a key input for an business enterprise. MSMEs, almost everywhere in the globe, face a serious problem of non-availability of adequate credit facilities both in respect of working capital as well as for their capital needs. The capital base of these MSMEs is stunted mainly because they are not in a position to offer appropriate collateral security. As such they have to rely on their own savings and also on other informal sources whose terms and conditions for offering credit assistance are far from the normal terms and conditions followed by the banks and financial institutions. Most of the MSMEs continue to be either proprietary or partnership concerns with little or no reputation of being ‘safe Credit Risk’ in the organised financial market. The present paper studies the loan repayment behavior of MSME and its relationship with credit sufficiency. A descriptive analysis was done to permit the study to make use of both quantitative and qualitative data collection techniques and data analysis procedures. In all, 112 enterprises were chosen for the research. Evidence from the analysis shows that for 52 per cent of micro, small and medium enterprises the amount financed was insufficient.

Top

Keywords

Credit, collateral security, Loan repayment, Borrowers, working capital, safe Credit Risk’.

Top