Title: Financing of small scale enterprises (SSEs): a survey of literature

Authors: Sushma Rani Verma, B.S. Bodla

Addresses: JFM, ICFAI National College, P.O. Magali, Vill. Harikot, The. & Distt. Hisar-125001, Haryana, India. ' Department of Management Studies, Kurukshetra University, Kurukshetra-132119, Haryana, India

Abstract: Finance is one of the factors occupying an important place in all types of economic activities. The growth of any industry largely depends upon the availability of adequate finance in proper time. Financing of small scale enterprises is that critical aspect which gains special attention of banks and other financial institutions. It is included in priory sector lending. This paper presents views of different authors about the financing of small scale industries and also brings out the financial problems faced by these units after the phase of liberalisation. Much of the studies pointed out that the small firms, which in turn are facing more problems than large firms. In the liberalised era, the priorities earlier enjoyed by small scale industries have vanished. Many researchers showed the applicability of pecking order theory in the financing decision of small firms. There is a great scope of research in this field, especially in the Indian context because the SSE occupies a unique position in the Indian economy for its contribution towards value addition, employment generation, and the expansion of entrepreneurial base and also for the diversification of the industrial sector.

Keywords: capital structure; financing; pecking order theory; small scale enterprises; SSEs; small and medium-sized enterprises; SMEs; SSE finance; SME finance; India.

DOI: 10.1504/IJVCM.2009.031770

International Journal of Value Chain Management, 2009 Vol.3 No.4, pp.411 - 430

Published online: 23 Feb 2010 *

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