Factors Perceived by Entrepreneurs While Taking Loan from Commercial Banks - A Study with Special Reference to Small Scale Industrial Units in Kanyakumari District

Neelakandan*
Magalir Micro Capital Private Limited, Tirunelveli, India.
Periodicity:September - December'2023
DOI : https://doi.org/10.26634/jecom.3.3.20218

Abstract

The aim of the study was to determine the factors that are perceived as important by small-scale industries when taking loans from commercial banks and to find out the preferences of small-scale industries regarding sources of capital to be used in the future. The primary data were collected through a pre-tested and structured questionnaire. The survey was conducted on 295 units, but only 250 units provided a full response. Therefore, the analysis is based on the responses from these 250 respondents. The findings indicated nine factors that are considered very important by small-scale firms when they apply for loans. To fulfill their working and fixed capital requirements, small-scale firms need an adequate amount of finance within a specific period of time. Extensive documentation and complicated procedures generally delay the sanctioning of loans, resulting in loss of production and sales for small firms. Due to these reasons, small-scale firms consider own funds as the most preferred source of finance. Therefore, there is a need to strengthen the relationship between banks and borrowers in such a way that relationship lending is given importance along with transaction-based lending.

Keywords

Small Scale Industries, Entrepreneurs, Preference and Factors.

How to Cite this Article?

Neelakandan. (2023). Factors Perceived by Entrepreneurs While Taking Loan from Commercial Banks - A Study with Special Reference to Small Scale Industrial Units in Kanyakumari District. i-manager’s Journal on Economics & Commerce, 3(3), 16-24. https://doi.org/10.26634/jecom.3.3.20218

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