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

Authors: Vibhuti Mittal; T.V. Raman; Gurendra Nath Bhardwaj

Addresses: Amity Business School, Amity University, F-3 Block, Amity University Campus, Sector-125, Noida 201-313, Gautam Budh Nagar, U.P., India ' Birla Institute of Management Technology (BIMTECH), Greater Noida, India ' NIIT University, NH 8, Delhi Jaipur Highway, Neemrana, Rajasthan – 301705, India

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.

Keywords: entrepreneurial finance; MSME financing; financing behaviour; external financing decision; financing preferences.

DOI: 10.1504/IJBEX.2024.137254

International Journal of Business Excellence, 2024 Vol.32 No.3, pp.296 - 319

Received: 06 Jun 2020
Accepted: 14 Feb 2021

Published online: 08 Mar 2024 *

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