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Mediating effect of utilisation in the relation between loan services from PSBs and capital formation of MSMEs: a study of Purba and Paschim Medinipur districts of West Bengal

Author

Listed:
  • Sajijul Islam

    (Hijli College
    Vidyasagar University)

  • Debdas Ganguly

    (EIILM, Kolkata
    Haldia Institute of Technology)

Abstract

The micro, small, and medium enterprises (MSMEs) have been acknowledged as the engine of economic growth and for promoting equitable progress all over the world. Let there be any category of countries, the existence of MSMEs is predictable. The MSME sector is playing a pivotal role majorly in employment generation at low capital cost. Purpose In this background, the present study is chosen to explore the factors considered under the utility of loan services provided by the public sector banks. With this, the authors have tried to establish a relation between the factors under the utility of loan, utilisation of fund, and capital formation in the MSMEs. Design/methodology To achieve the aforesaid objectives analysis is done on the basis of primary data. The primary data has been collected from 271 respondents. The respondents are the entrepreneurs of the two selected districts of the present study. In the study, the researchers have applied exploratory factor analysis, confirmatory analysis, multiple regressions, and path analysis of the structural model. The researchers have made a deliberate attempt to build a model on the relation between utility of loan service (ULS), utilisation of fund (UF), and capital formation (CF) across the enterprises. Findings The model of the present study exposes that loan services provided by public sector banks are influencing to utilise the fund effectively by the entrepreneurs but not directly influencing in the formation of capital.

Suggested Citation

  • Sajijul Islam & Debdas Ganguly, 2019. "Mediating effect of utilisation in the relation between loan services from PSBs and capital formation of MSMEs: a study of Purba and Paschim Medinipur districts of West Bengal," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-16, December.
    • Handle: RePEc:spr:jglont:v:9:y:2019:i:1:d:10.1186_s40497-019-0181-3
    DOI: 10.1186/s40497-019-0181-3
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    References listed on IDEAS

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    1. Lee Cronbach, 1951. "Coefficient alpha and the internal structure of tests," Psychometrika, Springer;The Psychometric Society, vol. 16(3), pages 297-334, September.
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    Cited by:

    1. Muliadi Muliadi & Dio Caisar Darma & Jati Kasuma, 2020. "MSMEs as mediation in the effects of investment credit, interest rates, and labor on economic growth: Evidence from Indonesia," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 9(2), pages 01-12, April.

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