Financial inclusion in micro, small and medium enterprises in Goa

Abstract

Financial inclusion is the delivery of banking services at affordable costs to vast sections of disadvantaged and low income group. It is widely believed that financial inclusion provides formal identity, access to payments system and deposit insurance, and many other financial services. (Swamy Vigneswara, 2011). India is fast moving towards becoming a developed country. History proves that the Micro, Small and Medium Enterprises have always been given the required thrust; however, with regard to the capital needs of these small units, there has been a gap between the needs and the available resources (Lokhande M, 2011). Small enterprises in India have come up in an unplanned, uncontrolled and haphazard manner – Solomon, 2012. A major drawback relating to MSME is the absence of a wide range of financing and other services that are needed to raise money and sustain. Due to lack of financing options, the sector is unable to capture opportunities and compete. To increase the flow of loans to the micro, small and medium enterprises (MSME), there has to be a study of the factors affecting financial inclusion in the MSME sector. This will bring out the leveraging synergies between the banks/financial institution and the MSMEs so that loans can flow smoothly to the MSME customers. The aim of this paper is to identify the factors affecting accessibility, availability and usage of financial services by Goan MSMEs, thus gauging the depth of financial inclusion. A first level exploratory survey across Goan MSMEs with sample pertaining to enterprises in backward as well as developed areas of Goa has been conducted. Outcomes have thus been listed with emergent conclusions.