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Financing preferences and decisions - the case of entrepreneurs of micro, small and medium enterprises

Author

Listed:
  • Vibhuti Mittal
  • T.V. Raman
  • Gurendra Nath Bhardwaj

Abstract

The Indian micro, small and medium enterprises (MSMEs) are dealing with the economic consequences of COVID-19 induced lockdowns and demand crisis. Amidst the uncertain environment, financing difficulties are one of the primary concerns for MSME entrepreneurs. The present study intends to assess the financing preferences and external financing decision of MSME entrepreneurs, along with the severity of financing constraints faced by them. The empirical data has been collected from the MSME entrepreneurs of the National Capital Region of India through a structured questionnaire. The results are interpreted through mean analysis, principal component analysis, and stepwise multiple regression analysis. Key findings suggest that firm entrepreneurs follow pecking order behaviour of financing and display hesitance towards new-age financing alternatives. Moreover, various personal and firm attributes are found to be having influence over the financing decision of MSME entrepreneurs. The study contributes to explaining the financing behaviour of MSMEs in the Indian context.

Suggested Citation

  • Vibhuti Mittal & T.V. Raman & Gurendra Nath Bhardwaj, 2024. "Financing preferences and decisions - the case of entrepreneurs of micro, small and medium enterprises," International Journal of Business Excellence, Inderscience Enterprises Ltd, vol. 32(3), pages 296-319.
    • Handle: RePEc:ids:ijbexc:v:32:y:2024:i:3:p:296-319
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