1Research Scholar, DoS in Commerce, University of Mysore, Manasagangotri, Mysore, India
2Associate Professor, DoS in Commerce, University of Mysore, Manasagangotri, Mysore, India
Online published on 21 November, 2017.
Small scale industries are facing innumerable problems in different areas of operation such as marketing, production, human resource and mainly in the area of finance; obtaining credit from financial institutions is a complex one. When conventional (institutional finance) credit markets get tight, an entrepreneur provoked to find unconventional (informal) ways and means to obtain finance, such as, peer lending, personal savings, friends, family, credit card etc., to obtain finance for overcome financial problems and for bring the business into the path of success. Here, Researcher has been made an attempt to examine empirically; with the objectives mentioned bellow.
Objective: 1. To review the challenges for SSI's to access finance from conventional financial sources.
2. To investigate factors stimulating SSI's towards unconventional financial sources.
Findings: Small Scale Industries are extensively depending on unconventional sources of finance for fulfilling their financial needs, because, the institutional financial sources limitations, such as documentation, red-tapism, procedure, collateral security, government employee security, corruption and so on. And motivated towards unconventional financial sources to obtain finance by motives such as, know each other, Convenience, Only option, Quick service, and low interest.
Suggestion: conventional financial sources have to liberalize their lending norms and they have to sanction loans to SSIs very quickly, very importantly they have to rectify their lacunas and try to correct them.
Conventional finance, Unconventional Finance, Small Scale Industries
