CHAPTER -II

REVIEW OF LITERATURE

2.1 INTRODUCTION

In recent years several studies related to the growth and development of Micro

Small and Medium Enterprises as the major or one of the objectives have been

undertaken by the Central Governments, States in the country and private agencies

including industries. A brief review of some selected studies with their scope and their

objectives may be useful for understanding the present scenario of MUDRA.

The review of literature plays a vital role providing insight into the research

problem. It helps a researcher to identify the research gap and develop a meaningful

hypothesis. It gives the idea of how the subject of the study could be analyzed. The

researcher reviewed the available literature on Pradhan Mantri Mudra Yojana

(PMMY). Many researchers have made several studies on this topic in different

dimensions. A brief review of such works is presented here.

2.2 REVIEW OF RELATED LITERATURE

Balasubramanyam (2005) suggested that SSIs occupied a strategic place in the

Indian economy in view of its contribution to employment, production and exports.

The implications of globalisation and domestic economic liberalisation for SSIs are

probed. The author recommends policy changes to ensure the sustenance and

competitive growth of small-scale industries.

Murugesan and Sankaran (2005) concluded that in the general perception of

entrepreneurs, the problem relating to raw materials was considered to be serious by

the entrepreneurs and shortage of working capital was the other major problem.

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Khom Raj Kharel (2005) elicited opinions on opportunities and challenges of cottage

and SSIs in Nepal. The author strongly believed that it is necessary to make

industrialization process dynamic and consolidated by developing and expanding

cottage and SSI keeping in mind limited market, level of technical know-how,

transportation and geographical structure of the country. There are greater possibilities

to establish cottage and SSI utilizing the existing local resources due-to geological and

geophysical structure of the country.

Julien Labonne (2006) suggests that SMEs and larger firms differ greatly in the way

they deal with environmental issues. In addition, it appears that there are a greater

number of factors explaining the variations in environmental management,

performance and innovation for SMEs than larger firms.

Victor Garcia-Morales et al., (2006) have analysed the difference among

entrepreneurial learning, innovator and problematic SMEs based on organisational

learning (OL) and organisational innovation (OI) and on capabilities. They developed

a number of testable hypotheses on the influence of capabilities on performance with

in the four different groups of organizations which they have surveyed. The

hypotheses are tested using data from 299 Spanish SMEs. The results show that: (i)

personal mastery, transformational leadership, shared vision, absorptive capability,

teamwork capability, organisational learning (OL) and organisational innovation (OI)

are positively linked and linked to performance in SMEs; (ii) entrepreneurial SMEs

possess a higher level of these capabilities and performance than learning, innovator or

problematic SMEs; (iii) learning SMEs make the above strategic capabilities more

possible than innovator SMEs or problematic SMEs; (iv) innovator SMEs make

strategic capabilities more possible than problematic SMEs; (v) OI is significant and

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positively linked to performance in innovator and entrepreneurial SMEs; and (vi) OL

is significant and positively linked to performance in learning and entrepreneurial

SMEs.

Anand and Murugaiah (2006) opined that the SSIs facilitate the tapping of resources

for productive purpose with mnimum amount of capital investment, which in turn

helps to strengthen the industrial structure of a nation. In India, the SSI sector

contributed significantly to bring down regional imbalances by generating

employment opportunities, output, and exports; fostering entrepreneurship and in

accelerating economic development. It contributes over 50 per cent of the industrial

production in terms of value –addition. This sector accounts for one-third of exports

and employs the largest manpower next to agriculture

Milind Kumar Sharma and Rajat Bhagwat (2007) explore and examine the

Performance measurement system (PMS) developed through four select case studies in

India. Another purpose of the study is to provide preliminary insights into why SMEs

adopt PMS. It also aims to identify critical issues that would contribute to the effective

performance measurement function in Indian SMEs.

Roberty Edwin Chester (2007) found that the important age groups among the

beneficiaries are 35 - 45 years and 25 - 35 years. The number of beneficiaries who are

in the group of less than 25 years and more than 55 years are comparatively less. The

first two important levels of education among the beneficiaries are higher secondary

school level and under graduation. The important sources of inspiration among the

beneficiaries are self employment, leading an independent life and financial crisis. The

important discriminate variable regarding the empowerment among male and female

beneficiaries are behavioural and managerial empowerment. The important constraints

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discriminating the male and female beneficiaries are social and psychological

constraints. The female beneficiaries have more social and psychological constraints

compared to female male beneficiaries. The enterprise involvement and problem

perception among beneficiaries significantly influences the performance of their

enterprises. The expectations among male and female beneficiaries differ in nature.

The profile is variable and the personality traits of the beneficiaries have their own

role in expectation also. The study finally concludes by laying a stress on the need for

different strategies to enrich and empower the existing micro entrepreneurs in the

study area.

Surya Dev and Gitanjali Panda (2007) have focused on the role of SSIs, with

various arguments such as employment, equality, latent resource management,

decentralization etc. Also covered are the pre- and post-liberalization eras of the

development of SMEs.

Srivastav and Syngkon (2007) have analyzed the emerging aspects of SSIs in the

East Khasi Hill district of Meghalaya. The study has revealed that more than one

fourth of them are women entrepreneurs. Besides, the study has showed that the SSIs

are at the preliminary developing stage in the district and are yet to make a significant

contribution to the growth of the economy.

Vidhan Maheswari and Pratishtha (2008) dealt with issues on the future of SSIs in

India in the present era of globalisation and liberalization with the advent of TRIPS.

Also, it specifically focuses on the SSIs with an investment of less than 1 crore and

discusses the importance of SSIs in changing economic environment and its

implications for small industries. It examines the reasons for protecting intellectual

wealth in the present scenario of economic development in India. It analyses the role

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of government in making the small enterprises viable. It also discusses the measures

that are being taken and suggests measures that should be taken to make small

enterprises viable.

Bala Subrahmanya (2008) probes in to the changing structure and importance, inter-

firm influence and economic performance of SMEs in More subcontracting intensive

(MSI) industries as compared to less subcontracting intensive (LSI) industries in the

course of changing subcontracting intensities of Japanese manufacturing during 1976–

2003. The study found that the percentage of subcontracting SMEs has steadily

declined since the early 1980s, but not inter-firm relationship between small, medium

and large firms. What is significant to note is that MSI industries did not suffer relative

to LSI industries when percentage of subcontracting SMEs declined in Japanese

manufacturing.

Madhavi and Sujatha (2009) found that the Indian SMEs are presently incapable of

developing right perspectives. They are organizationally weak compared to global

ones. It is essential to reposition Indian SMEs in some strategic sectors with some

proven comparative advantage. Clusters should be the future strategy for the

development of SMEs. There must be emphasis on brand building of products to

improve their marketability in the national and international markets. During the

present crisis of global market, the Indian SMEs are considered to be the alternatives

to large and high-capacity manufacturing sectors due to their capability of providing

employment and support to the domestic markets.

Sivasankar (2010) states that the State Financial Corporations (SFCs) continue to play

an important role in financing SSI sector. However, the growth rate of in the credit

disbursed by SFCs is low as compared to the growth of production in SSI sector.

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Measures to increase the supply of SFCs credit to SSI will be short-lived and less

efficient as SFCs credit ultimately pass through non-institutional credit channels.

Hence there is a dire need to strengthen the financial credit flow for the speedier

development of SSI as the success of the economy, especially industrial sector can be

ensured through reliable, efficient and effective financial system.

Kalpande, Gupta and Dandekar (2010) have demonstrated the positive impact of

Total Quality Management (TQM) practices on SMESs. They have relied on

manager’s self assessment of performance. They have observed that many SMEs are

ineffective and some are closed down. The main problem of those SMEs seems to be

the low quality of their product and rise of competition in the market. To stand in the

market, it is necessary for SMEs to face new challenges by adopting proper strategy.

SWOT analysis is one of the techniques to undertake a more structural analysis to

formulate the best strategy.

Nazuk Kumar (2011) this study was conducted by the Reserve Bank of India, in

Chandigarh, India. Financial inclusion in India is very poor with 51.4 percent of 89.3

million farmer households being excluded from any source of credit. A cross-country

comparison of India with Sri Lanka, Bangladesh, France, Indonesia and Philippines

has been conducted. A door-to-door survey was carried out in three relatively

prosperous villages in Panchkula district of Haryana, a state where officially the

financial inclusion program has largely been successful. Results show that although

most households have a bank account, these are hardly used. Thus, the financial

inclusion policy, where successfully implemented has addressed access; however

comprehensive financial inclusion, including access to services like credit, savings,

insurance, pension plans, has not been achieved. Thus, right from the policy level the

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aim should be "usage" with better implementation and not mere "access." A different

approach for India has been suggested for tackling this problem.

Santosh, Pandey and Pankaj Kant Dixit (2011) have referred to globalization and

transformation of the world into one huge market. The study provides several things to

several people to remove all trade barriers among countries. Globalization happens

through three channels: trade in goods & services, movement of capital and flow of

finance. The main theme of the paper is to evaluate the performance of SSI, before and

after liberalization. They have computed average annual growth rates to know the

impact of globalization on the performance of SSIs.

Sunil Kr Saikia (2011) has identified various reasons for the slow growth of MSME

sector. Also, he addressed the need to build a proper and effective strategy for the

development of Indian economy through MSME sector by motivating and changing

the mindset and attitude of the local youth to take up various entrepreneurial ventures,

improve the infrastructural facilities by providing continuous R&D efforts and product

innovations.

Saddan Kumar Chattopadhyay (2011) study seeks to examine the extent of financial

inclusion in West Bengal. It is observed from the study that although there has been an

improvement in outreach activity in the banking sector, the achievement is not

significant. An index of financial inclusion (IFI) has been developed in the study using

data on three dimensions of financial inclusion. The study shows that Kolkata district

leads with the highest value of IFI followed by Darjeeling. Only one district, viz.

Kolkata belongs to the high IFI group with IFI value of 0.5 or more and the rest of the

districts belong to the low level of IFI value (i.e., 0-0.3). This implies that the State has

to go a long way in achieving financial inclusion. In order to get a comparable picture,

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state-wise IFI has also been computed and it is found that Kerala tops the list in

financial inclusion followed by Maharashtra and Karnataka. Apart from this

computation, a survey has also been conducted in West Bengal in order to gauge the

financial inclusion in rural Bengal and the results reveal that around 38 per cent of the

beneficiaries feel that they do not have sufficient income to open an account in the

bank. It is also revealed that moneylenders are still a dominant source of rural finance

despite wide presence of banks in rural areas.

Jolanda Hessels (2011) focuses on the relationship between environmental

sustainability and financial performance of SMEs in terms of profit and revenue

development. The results suggest a significant positive association between

environmental sustainability and firm performance.

Archanaa.V.Rao.(2012) summed up, banks need to redesign their business strategies

to incorporate specific plans to promote financial inclusion of low income group

treating it both a business opportunity as well as a corporate social responsibility.

Banks should prepare comprehensive plans to cover all villages, through a mix of

branchless banking and bricks and mortar branch banking. They should speed up

enrolment of beneficiaries and opening of UID-enabled bank accounts which enables

routing of all social benefits to bank accounts electronically as also seamless cash

transfer to the poor, as and when the government replaces the age-old system of

subsidy and public distribution system with cash transfers. It is important that adequate

infrastructure such as digital and physical connectivity, uninterrupted power supply,

etc., is available.

Kumar’s (2012) financial inclusion mission has gained tremendous relevance in an

emerging economy like India. Financial exclusion seems to be more severe in rural

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and backward locations. In this respect, the current analysis is an attempt to explore

the behavior of inclusion/exclusion across varied population groups. The pooled

dataset spanning over the period from 1990 to 2008 for rural and urban regions

separately has been employed. A set of control variables have been included to

disentangle the role of various demographic and institutional factors. Bank group size,

as captured by assets, has a direct influence on the number of operating branches.

Ownership effect also plays a key role in determining the number of branches

operating. Test of convergence has been carried out to examine if lesser branched

regions are catching up with their counterparts with higher branch network. Evidence

of conditional convergence has been found. Finally, structural change has also been

observed in terms of the number of functioning branches. The result is a testimony to

the fact that inclusion policies are actually translating into significant improvement of

branch density.

Ramu (2012) article reviews the growing interest in financial exclusion and inclusion,

define them and demonstrate their existence in developing and developed countries.

This article empirical focus is on whether financial inclusion has been successfully

implemented in four sites in rural South India where banks claimed that financial

inclusion is complete. Although many rural people in South India are financially

included, the concept of financial inclusion is more complex than usually portrayed.

Findings show that social and personal deprivation contributes to financial exclusion

and should be viewed as key barriers to financial inclusion. We also suggest that

financial inclusion is not a monolithic phenomenon and should be studied in a multi-

layered fashion, ranging from having a bank account to making full use of modern

financial instruments.

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Rabindra kumar and Maheshwar Sahu (2012) have concluded that Marketing

occupies an important place in the management, growth and development of MSMEs.

The efficiency of marketing determines the sale volume and profits of MSMEs. Most

of the findings have shown that women entrepreneurs in KBK districts are of first-

generation entrepreneurs. Place of marketing of most of entrepreneurs have direct

impact on annual turnover. Levels of education of women entrepreneurs, economic

background, family type and marital status have direct influence on marketing. Growth

in sales is major indicator of business performance and success because, the

availability of markets for the products reduces the inventory level and reduces the

blockage of working capital for long period, resulting in the growth of business.

Eighty-seven per cent beneficiaries have sold their products in local markets, on the

road sides, door to door selling etc. and remaining 13 per cent through exhibition,

village fairs and so on. A little over 92 per cent of beneficiaries sell their products

directly to beneficiaries and the rest through middlemen.

Vijayalakshmi and Suseela Bharati (2012) report that the role of finance is crucial

for the survival and growth of SMEs. Access to finance allows SMEs to undertake

productive investments, expand business and acquire latest technology. As SMEs have

been the green-field for nurturing entrepreneurial talent, first generation entrepreneurs

should be facilitated by providing access to desired finance through creation of

guarantee funds. Finance should not only be timely but also cost-effective.

Lakshmi Kumar (2012) considered technology as an enabler for financial inclusion

even though it has a more significant role—it has the power to reduce cost

substantially and can reach out to the unbanked in the most effective manner. It is

important to identify which technology has diffused to low-income families and

leverage the same for their benefit. We find that in several underdeveloped African

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countries, changes in regulation and the permeation of the mobile has aided the

substantial growth of financial inclusion. In India, technology assimilation among

microfinance institutions (MFIs) is not all that simple as its immediate benefit is not

clear to them; however, mobile penetration even among the lowest income group is

very high. Since MFIs are so widely spread, they seem the best connected to the

clients for understanding their needs both in terms of financial services as well as non-

financial services. Making them the business correspondent and incentivising them

through mobile technology would be the first step towards financial inclusion.

T.Swetha & DR.K.Venugopal Rao (JULY 2013) in their article entitled as,”

Entrepreneurship In India” the aim of the article is to elucidate the history of

entrepreneurship, its development stages, it also discussed about eminent

entrepreneurs from Indian history to present Era .The data has been collected from

secondary source. Further, this paper depicts the role of women entrepreneurship in

India. Since time in memorial women are contributing a great deal to the development

of any nation across the world. It goes without saying that Indian women

entrepreneurs have significantly contributed to the industrial development of India.

Apart from giving good citizens to the nation, women have also given good

organizations to the nation. The objective is to analyze the future of entrepreneurship

in India-Entrepreneurs need to get up to speed with the latest innovations in business.

Managers, entrepreneurs and other business-driven people simply cannot compete in

today’s market if they do not adopt the right tools. Social media, for instance, is

indispensable to any business, in any industry, as it offers a range of business benefits

both internally, within a company, and externally, between a company and other nodes

of the business.

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Brijesh Patel & Kirit Chavda (July 2013) in their article entitled as,” Rural

Entrepreneurship in India: Challenge and Problems” this paper discussed Rural

entrepreneurship is now a days a major opportunity for the people who migrate from

rural areas or semi - urban areas to Urban areas. On the contrary it is also a fact that

the majority of rural entrepreneurs are facing many problems due to not availability of

primary amenities in rural areas of developing country like India. Lack of education,

financial problems, insufficient technical and conceptual ability it is too difficult for

the rural entrepreneurs to establish industries in the rural areas. This paper makes an

attempt to find out the Problems and Challenges for the potentiality of Rural

Entrepreneurship. It also focuses on the major problems faced by rural entrepreneurs

especially in the fields of Marketing of products, financial amenities and other primary

amenities, i.e. availability of electricity, water supply, transport facilities and required

energy etc.

Rashmi Sree (Aug 2013) in her article entitled as,” Significance of Entrepreneurship

and Tendency of present youth towards Entrepreneurship in India” the study is based

on an exploratory research of 172 young people in India. For undertaking the survey, a

structured questionnaire was prepared which covered different issues relating to the

preference of students for entrepreneurship, motivating factors for entrepreneurship,

reasons for not choosing entrepreneurship, problems faced by the entrepreneurs from

their individual perspective. Secondary data, i.e., through websites, books and journals

were also referred for the preparation of the research paper. This survey and further

research aim at eliciting the thoughts of present youth towards entrepreneurship and

their preferences at the entry level in to entrepreneurship. The overall study shows us

that Indian youth hasn’t completely reached to the expectations of their involvement in

entrepreneurship which is ought to be required in this present scenario.

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Arulmurugan(2013) study deliberates about inter-linkages between socio economic

welfare and financial inclusion. The socio-welfare programs like the NREGP, Direct

Cash transfer, National Old Age Pension Scheme are focused on implementing

financial inclusion. This is primarily because it helps to ensure electronic cash

transfers.

Anupama Sharma (2013) paper highlights the basic features of financial inclusion,

and its need for social and economic development of the society. The study focuses on

the role of financial inclusion, in strengthening the India’s position in relation to other

countries economy. For analysing such facts data for the study has been gathered

through secondary sources including report of RBI, NABARD, books on financial

inclusion and other articles written by eminent authors. After analysing the facts and

figures it concluded that undoubtedly financial inclusion is playing a catalytic role for

the economic and social development of society but still there is a long road ahead to

achieve the desired outcomes. Anupama Sharma, documents the link between risk,

stability, and access to credit markets in an emerging economy. It presents annual

credit loss distributions of Chilean banks for the period 1999-2005, providing the first

empirical evidence of the cyclical pattern of expected losses and unexpected losses of

bank loan portfolios in emerging countries. The paper provides three main

contributions to the debate on bank solvency and access to credit markets. First, it

derives nonparametric estimators of expected losses and unexpected losses, free from

model error and, in particular, from distributional restrictions. Second, it shows how

the distribution of credit losses for portfolios of retail and commercial loans is affected

by the lumpiness of bank loans. Finally, it shows that the shape of credit loss

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distributions helps select appropriate policies to promote broader and sounder access

to bank credit for the poor and the unbanked.

Lalit Sharma & Pankaj Madan (2014) in their article entitled as,” Effect of

individual factors on youth entrepreneurship – a study of Uttarakhand state, India in

this study we have tried to examine the effect of individual factors like intelligence,

past self employment experience, past work experience and educational course of

professional students on their decision to take up entrepreneurship as a career choice.

It is a quantitative study wherein we have taken data of 530 young students studying in

the final year of various professional courses (MBA/PGDM, MCA, B.Tech, and

BHMCT & B.Pharm) of Uttarakhand state of India. The student target population

chosen for this study was in the age group of 20–24 years. The male & female ratio of

this study was 75 & 25 respectively. Data analysis has been done using Cross

tabulation and Chi square test. The results showed that past self-employment

experience has a negative impact on student’s entrepreneurial inclination. No

relationship was seen between the work & experience (typically less than 3 years) and

entrepreneurial inclination. Students scoring high on intelligence were seen to have no

or little entrepreneurial inclination and students who were in MBA/ PGDM, MCA &

BHMCT courses were little better inclined towards entrepreneurship in comparison to

the rest of the courses. This could possibly be attributed to the presence of

Entrepreneurship subject taught in the MBA/PGDM and BHMCT courses and an

additional credit is due to the dot com revolution which has possibly given some boost

to the entrepreneurial inclination of students with technical back ground as it requires

less capital investment in comparison to other ventures. Capital investment has already

been found to be a major perceived barrier among the students of Uttarakhand

(Sharma & Madan, 2013). This research has given us a direction to further explore the

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impact of family, society & culture of Uttarakhand in building entrepreneurial

inclination and also determine the effectiveness of university education system of

Uttarakhand in building entrepreneurial inclination

Ms. Indira kumari (April 2014) in her article entitled as,” A Study on

Entrepreneurship Development Process in India” observed entrepreneurial

development involves equipping a person with the required information and

knowledge used for enterprise building and polishing his entrepreneurial skills. In

these days, entrepreneurial development programmers are treated as an important tool

of industrialization, and a solution of unemployment problem of India. In the present

paper an attempt has been made to study the entrepreneurship development (ED)

process in India and the role of entrepreneurship development programmers in the

economic growth of a nation. The data used for the purpose of study are mainly from

secondary source. The objective of the paper is to study the Entrepreneurship

development process in India and to highlight the role of Entrepreneurship

development programmers in the economic growth of a nation. He overall aims of an

entrepreneurial development programmer is to stimulate a person for adopting

entrepreneurship as a career and to make him able to identify and exploit the

opportunities successfully for new ventures.

Indira Singh (Dec. 2014) in his article entitled as, “Role of Demographic Variables in

the Formation of Entrepreneurial Intention” this study specifically delves upon the

demographic factors that impact the formation of entrepreneurial intention in

management students. This study is drawn upon the widely used intentional paradigm

i.e. the theory of planned behavior (Ajzen, 1991). The theory of planned behavior

suggests three conceptually independent antecedents of entrepreneurial intention. Less

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studied are the demographic variables that also impact intention formation process.

Through the model seven demographic variables (gender, age, prior employment

experience, parental occupation, parental education, income bracket and family

business background) are studied. This study has utilized a quantitative approach. Data

has been collected from 532 management students and SPSS has been used to analyze

data. Entrepreneurial Intention Questionnaire (EIQ) scale as adapted and used in this

study has 38 items. Another 10 items are for collecting personal data of the

respondent. The items have been built as 7- point liker-type scales. Correlation and

multiple regression will be used to determine significant model paths to determine

final model. Also, specifically, it is not clearly known in literature whether

environment or the individual’s personal characteristics drive the student’s career

decision towards entrepreneurial behaviors rather than taking up organizational

employment.

Suneetha and Sankaraiah, (2014) studied the problems of MSMEs and

Entrepreneurs in Kadapa District, the study conducted a survey on 156 enterprises to

study their problems. It was found that 103 enterprises were facing financial problems

and among them 62.8 per cent were micro enterprises. In the study all the divisions of

Kadapa, Jammulamadugu and Rajampet were covered.

Malyadri (2014) made a study titled, “An Economic Appraisal of Entrepreneurship in

Small Scale Industries - A Study on Nellore District”. The economic prosperity of

India mainly depends upon the success of industrial as well as agricultural sectors.

Owing to the limitations of the agricultural sector in contributing 38 adequately to the

economy, the industrial sector, which is affluent with resources, has assumed greater

importance in this regard in our country. Realizing the importance of industrial sector

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to economic development, our planners have aimed at accelerating industrial

development through rapid industrialization by exploitation and effective utilization of

the rich, natural and physical resources our country is endowed with. Moreover, the

planners have also realized that the roles of the people and their abilities have to play

in these stupendous endeavours are supremely important and that any negligence of

the human factor would only enfeeble the economic prosperity of the country.

Consequently, the industrial policies of the government and the successive five-year

plans reiterate the government’s intention to stimulate and promote the human factor

in industrial development. Thus, the entrepreneur has come to assume an important

place and become the nerve-centre of all economic activity. The development of

entrepreneurship, which is a human activity, has become imperative in view of the

economic development and prosperity of our country. The developed as well as the

developing countries today rely much upon speeding up industrialization on which

their economic development depends. In this process, man stands at the centre as

organizer of human and material resources, as worker, as consumer, and as exchange

agent. Of various roles he has to play, his function as an organizer of human and

material resources is the most important one to ensure progress. Without his role, the

resources of production remain stationary and can never be transformed into products

or services

Sathis Modi (2014) in his research journal named as, “Problems and Prospects of

Indian Small Scale Industries”, highlighted that the problems in small scale industries

in India such as; faulty and irregular supply of raw-materials, absence of credit

facilities, absence of organized marketing facilities, old and orthodox designs, high

degree of obsolescence, substantial under-utilization of capacity and unsuitable

locations are affecting the production and marketing of small scale industrial product

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Mehar L (2014) has showed that the financial inclusion in India has increased in the

last few years with new innovations like mobile banking, ultra-small branches etc.,

Mol S.TP (2014) in his paper entitled “Financial Inclusion: Concepts and Overview in

Indian Context” has explained that there are certain problems like financial Illiteracy,

lack of awareness and beneficiaries acquisition is high. Reserve Bank of India has

initiated various initiatives to enhanced financial inclusion. Information and

communication technology offer the opportunity for the banks to enhance financial

inclusion for the people who are unbanked has clarified that there are some issues like

money related Illiteracy, absence of mindfulness and client securing is high. Reserve

Bank of India has started different activities to improved money related consideration.

Information and communication technology offers the opportunities enhancement of

financial inclusion.

Aruna (2015) has done a study titled, “Problems Faced by Micro, Small and Medium

Enterprises with a special reference to Small Entrepreneurs in Visakhapatnam”. The

main objective of the study is to analyze and interpret five major problems faced by

MSMEs in Visakhapatnam. Both primary and secondary data were used in the study.

The study is empirical in nature as it is based on data collected with the help of a

schedule.

The sample size was 50. The data were collected from Visakhapatnam. The

enterprises were selected at random. The enterprises selected were both registered and

unregistered. As per the data collected there are many problems faced by these units,

but in his paper only five major problems are emphasized. Though finance is a major

problem, in analysis it has not been covered because, there are various reasons which

lead to financial problems. All of them could not be covered.

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 Authors has focused that the design of MUDRA Bank will not only cater to the

financial problems of MSMEs but also give moral support to vast pool of young

population to materialize their dreams of becoming an entrepreneur (S. Chandra,

2015)

In this paper author reveals that, MUDRA: Micro Units Development &

Refinance Agency is established to attain development in an inclusive and sustainable

manner by supporting and promoting partner institutions and creating an ecosystem of

growth for micro enterprises sector. This research paper highlights the offerings like

Micro Credit Schemes (MCS), refinancing to RRBs/Cooperative banks and impact of

MUDRA to Indian economy (Seema, 2015).

Verma S. (2015) has explained that the design of MUDRA scheme will not only cater

to the financial problems of MSMEs but also give moral support to a lot of young

population to become an entrepreneur.

Rudrawar, M. A. A., & Uttarwar, V. R. (2016)44 has concluded that the desired

transformation can be achieved from PMMY scheme. If applied properly at the bottom

level, it may act as a game changing idea and may increase, boost and prosper the

Indian economy. It should include less documentation and easily accessible. In coming

few years, MUDRA will be a catalyst for development of employment, GDP and

entrepreneurship at large (Rudrawar, 2016).

Roy, Anup Kumar (2016) has displayed that the small businesses are the foundation

of economic development. A major number of initiatives have been taken in the past

few years in the right direction.

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Poovendhiran Veerapan and Sathis Kumar (2016) in their research paper titled,

"Impact of Industrial policy of Small Scale Industries (SSI) An Exploratory study on

Indian SSI's", identified the following problems in establishing small-scale industries

such as; inadequate credit assistance, more rules and regulations to get a concession,

lack of legal work support, delinking SIDDBI from IDBI and capital limit restricted up

to Rs.5 lakhs only. The authors also suggested that in the performance of the SSI, the

monetary assistance is the prime constraint in running any business. But the

Government financial institutions are putting more hurdles in providing the loan to the

entrepreneurs. This may lead the entrepreneurs to approach the private money lenders

and getting struck up in financial constraints and bankruptcy.

The major traffic jam to the growth of entrepreneurs in the Non-Corporate

Small-scale industries is the lack of financial support to this sector. Majority of this

sector does not have access to formal source of funding. In India, small business units

play a significant role not only in contributing to nation income but also by providing

employment to a large no of people. After identifying the significance of self-

employment people and small business units, government of India launched MUDRA

Yojana to deal with the financial and other constraints. MUDRA Bank will associate

with local coordinators and provide finance to "Last Mile Financiers" of small/micro

businesses (Kumar, 2017).

Dr. J. Venkatesh and MS. R. Lavanya Kumari (2017) has showed that besides the

schemes that are being introduced for the overall growth and development of the

MSME sector, initiatives have been launched which focus solely on entrepreneurs.

The schemes will contribute to the well-being of the individuals engaged in small scale

industries which will positively affect the progress of the whole economy.

36
Prakash Babu and Murugan Ramu (2018) in their study titled, “A Study on

Financial Performance Evaluation of Small-Scale Industry”, this article shows an exact

examination of monetary execution assessment honed by SSIs and its effect. Financial

performance has also to be considered for application of a technology. In this paper, an

endeavor has been made to analyze the financial performance of small-scale industries

in Assam using Data Envelopment analysis method.

Manikandan (2019) made a study titled, “Financial Analysis on the Bank Finances to

Small Scale Industries in Erode District in Tamil Nadu”, revealed that finance is an

important input for an industry. For a small-scale industry, the need for finance is very

essential due to its limited resources. The sources of finance for small scale industries

are of two types-internal and external. The role of commercial banks in the process of

economic development is well recognized. The year 1969 was a major turning point in

Indian financial systems when 14 major banks were nationalized. Different national

and state level institutions operating in the country for meeting the credit requirements

of the SSIs sector include Small Industries Development Bank of India, Commercial

Banks, Regional Rural Banks, Co-operative Banks (State, Central and Primary), State

Financial Corporations/ State Industrial Investment Corporations, State Small

Industries Development Corporation, National Bank for Agriculture and Rural

Development, statutory bodies (KVIC, COIR Board, Handloom Board and Handicraft

Boards), National Small Industries Corporations Limited and the like. The State bank

of India lending to the small-scale industries in Erode district, compared to the public

sector and the priority sector lending. The trend values showed that the target has

increased faster than the actual number of advances. The recovery rate of the SSI

advances is a maximum of 72% in Erode district.

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Vipul Bansal, Vibhuti Mittal & Dr. T.V. Raman (2020) it has done a study titled,

“An Analysis of Performance and Impact of Mudra Yojana On Small Enterprise in

India”. The main objective of the study is to impact of PMMY on small enterprise. It

providing funds to Micro/Small scale businesses and to improve the situation of

unorganized, non-cooperated industries and informal sector in Indian market. It would

create employment opportunities in the rural as well as urban area. Mudra yojana’s

USP is to provide funds to those who find difficulty in raising funds from formal

financial institutions and to provide them funds at the lowest cost irrespective of their

education, skills and gender. MUDRA scheme will not only fulfil the monetary needs

but also the helps in boosting the moral of the new generation entrepreneurs. Mudra

yojana will definitely a positive step taken by the GOI that would take the country

forward in future because it encourages women entrepreneurs as well by refinancing in

their business plans at very low rate of interest so that they can generate income and

contribute a good amount in National Income. Growth in MSME is an also step

towards “Make in India Project” as more domestic industries would leads to more

production of indigenous product which compete in foreign market and create more

foreign income which would improve the value of Rupees which determines the

economic growth.

Taranjeet kaur matharu (2020) has done study titled “An Overview of Pradhan

Mantri Mudra Yojana” The author mainly focus of scheme has been implemented to

provide support to entrepreneurs. MUDRA Scheme will definitively help the Micro,

Small & Medium Enterprises as it involves less documentation to take the loan at

reasonable rate. This scheme will help to reach the small entrepreneurs who are not in

the general banking system. MUDRA will create confidence in the small-scale

38
entrepreneurs and it also boost young, educated or skilled workers to become new

entrepreneurs and to expand business activities.

2.3 RESEARCH GAP

Review of past research studies and literature available relating to the study

have been presented in this chapter. The review facilitated the researcher to have a

comprehensive knowledge of the subject taken for the study. Online journals in the

field of Pradhan Mantri Mudra Yojana (PMMY) were referred to enrich knowledge.

The studies reviewed exhibits that studies pertain to the aspects of Prospects of

Pradhan Mantri Mudra Yojana, Performance, overview and of Micro Unit

Development and Refinancing Agency (MUDRA), problems of MSMEs and

Entrepreneurs, Entrepreneurship Development in Small and Medium Scale Industries,

Problems Faced by Micro, Small and Medium Enterprises with a special reference to

Small Entrepreneurs and Role of Commercial Banks in Financing Small & Medium

Size Enterprises; further, these studies were made with reference to other regions of

the country/the state. It is understood that in the previous studies, the researchers have

not attempted to analyze the perception of MUDRAs towards Bank Finance, Financial

Assistance by Commercial Banks and PMMYs and Factors Perceived by MUDRAs

While Taking Loan from Commercial Banks. Thus, the researcher identified this as

the gap to be filled up and the present study attempts to fill this gap.

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2.4 SUMMARY

The above stated reviews are reviewed by the researcher from various

periodicals magazines, journals, published books, and published research reports in

order to facilitate the study in exact manner. In spite of much information, the required

and relevant literature is highly essential to complete the study successfully.

In this chapter, the researcher has shown the evidence of literatures, which is

related to the study, the researcher has attempted to find out the various gaps in the

earlier literatures and tried to fill up those gaps from the study, which is shown in

detail in the theoretical chapters. This review of literature shows new areas for further

exploring in the in the beneficiaries satisfaction in PMMY scheme.

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