A Qualitative study on Access to finance challenges faced by MSMEs Entrepreneurs

Abstract

Purpose- The MSMEs (Micro Small and Medium Enterprises) counter numerous financial obstacles concerning access to financing. The study therefore intends to examine the difficulties of access to finance by the MSMEs.

Design/methodology/approach- Employing the qualitative approach, a total of 25 in-depth interviews with MSMEs entrepreneur were carried out. Data were analyzed using and NVivo 14 and JMP software.

Findings- The analysis extracted 7 unique themes, namely delay sanctioning loan, collateral requirement, Limited credit history, high interest rates, stringent documentation requirements, Limited financial literacy, working capital. The results claimed that these themes can assist in access to finance to MSMEs entrepreneurs. However, access to finance often leads to improving firm performance.

Originality- The paper is original and brings out some valuable findings that will assist the policymakers in India should finding ways to minimize financial barriers, so MSMEs can access finance easily, regardless of their attributes and life cycle stage to bridge the credit gap.