“Financing Constraints for MSME Sector”.

ABSTRACT

MSMEs are defined in different ways in different parts of the world. In some countries, they are defined in terms of assets, while few countries use employment as a parameter for defining MSMEs. The MSME sector is responsible for about 40 per cent of the exports and 45 per cent of the total manufacturing output of the country. Today, it accounts for nearly 35% of the gross value of output in the manufacturing sector and over 40% of the total exports from the country. The MSME sector has grown rapidly over the years. The growth rates during the various plan periods have been very impressive. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural and backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of National Income and wealth. Though, the contribution of MSMEs in any economy cannot be overlooked but MSMEs face several constraints and barriers. The main constraint that MSMEs face today is getting timely access to finance. The researcher tries to analyze the various constraints that the MSMEs are facing today. The paper has been prepared on the basis of available literatures. The present research paper reveals that there is a substantial amount of gap in the overall finance for the MSME sector.