Micro, Small and Medium Enterprises (MSMEs) are crucial for the economic growth and stability of any country and play a vital role especially for developing countries as they facilitate economic activity and provide employment, thus contributing to poverty reduction. In the Indian context, with over 30% contribution to GDP and employing more than 11.1 crore people (the second largest after agriculture), the MSME can be considered as the backbone of national economy.
One of the prime challenges faced by the sector today is lack of adequate and timely access to finance. Over 78% of MSMEs rely on self-financing to meet their credit requirements.
It is beyond doubt that MSME sector has to reflect on strong ethical corporate governance practices and financial reporting procedures to overcome the problems of access to funding, availability of skilled labor and technology, infrastructure and raw materials etc.