Need for Sustainable Financing: Interlinkage Between MSME Sectors Growth and Economic Growth in India

Abstract

Micro, small and medium enterprises did not witness the required growth in India despite their importance in generating job opportunities, alleviating poverty, and contributing to economic growth, given the different types of traditional financing (commercial banks, private financing institutions) have not provided adequate financing led to their growth. The relationship between sustainable financing and the growth of (MSMEs), and GDP growth, has not been well studied. The focus of this study is to see the nexus between sustainable financing and the growth of micro, small and medium enterprises, and economic growth in India. In line with the design study, a sample of 72 MSMEs was selected who have access to sustainable financing in Bangalore. The data has been analyzed to measure the relationships between financing, MSMEs growth, and economic growth using the correlation test and (OLS) method. The results from the analysis of the current study show that sustainable finance is essential for the growth of micro, small, and medium enterprises and economic growth.