International Journal of Scientific Development and Research - IJSDR
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Issue: July 2021

Volume 6 | Issue 7

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Paper Title: Bank financing for MSME: Boon or Bane
Authors Name: Smruti S Jog
Unique Id: IJSDR2106006
Published In: Volume 6 Issue 6, June-2021
Abstract: Micro small and Medium enterprises are very important part of the Indian economy because they are responsible for generating employment for rural market and are helpful for the economic development as they account for 40% of India’s exports and 45% of total manufacturing output. Not only banks but Non banking financial institutions as well extend credit to the credible companies but over a period of time it has become more and more difficult for these companies to avail loans due to their complicated financial condition. These companies are not able to fulfill the intricate requisites that are necessary to avail loan from a formal source of finance like banks. That’s why companies look for finance to informal sources like private lenders and have to bear huge interest rates and suffer financially. The company’s in recent times are facing the risk of going bankrupt in spite of repetitive boost by the government, and most of the company’s are struggling to make their ends meet, while the major aim of any entrepreneur is to grow and not just survive. This research attempts to find out the impact of bank finance on financial performance of the companies who have availed bank finance over the period of five years through advanced tools like Piotroski Score and to understand whether the companies are caught in debt trap through credit scores and to find out the probability that they might go bankrupt in the future through Altman Z score, and suggest appropriate funding opportunities that the bankrupt companies can explore. Most of the companies have been found to have poor Altman Z score which comes under red or grey zone. There are many other sources of finance that the company can consider for raising funds rather than band financing for debt restructuring.
Keywords: Piotroski score, Altman Z score, MSME, Debt restructuring, Fundraising.
Cite Article: "Bank financing for MSME: Boon or Bane ", International Journal of Science & Engineering Development Research (www.ijsdr.org), ISSN:2455-2631, Vol.6, Issue 6, page no.36 - 42, June-2021, Available :http://www.ijsdr.org/papers/IJSDR2106006.pdf
Downloads: 00025284
Publication Details: Published Paper ID: IJSDR2106006
Registration ID:193375
Published In: Volume 6 Issue 6, June-2021
DOI (Digital Object Identifier):
Page No: 36 - 42
Publisher: IJSDR | www.ijsdr.org
ISSN Number: 2455-2631

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