Role of Financial Institutions in Promoting Entrepreneurship among Micro, Small and Medium Enterprises (Msmes) n Madurai District

Abstract

Micro, Small and Medium Enterprises (MSMEs) are an important source of employment, income generation and local economic development. Their growth depends considerably on access to adequate and timely financial support. Financial institutions provide credit, working capital, financial assistance and various government-supported schemes that help entrepreneurs establish, operate and expand their businesses. The present study examines the role of financial institutions in promoting entrepreneurship among MSMEs in Madurai District. It focuses on the availability of institutional credit, accessibility of financial services, awareness and utilisation of financial schemes, adequacy of financial assistance and the difficulties faced by entrepreneurs in obtaining loans. The study is based on primary and secondary data. Primary data are collected from selected MSME entrepreneurs in Madurai District, while secondary data are obtained from government reports, institutional publications and other relevant sources. Descriptive and statistical methods are used to analyse the financial support received by entrepreneurs and its contribution to enterprise development. The study examines how institutional finance influences business expansion, investment, employment generation and the sustainability of MSMEs. It also identifies major constraints such as inadequate credit, collateral requirements, complicated procedures, lack of awareness and delays in obtaining financial assistance. Based on the findings, suitable measures are suggested to improve credit access, simplify financial procedures, increase awareness of government schemes and strengthen the support provided by financial institutions. The study may be useful to policymakers, financial institutions and MSME entrepreneurs in promoting sustainable enterprise development in Madurai District.