Determinants of Access to Finance by MSMEs in Andhra Pradesh

Micro, small and medium enterprises (MSMEs) are still an interesting academic and policy-related subject to study and understand the dynamics of the small business. There are a couple of studies which investigate the determinates of MSMEs growth by adopting personal approach (ownership characteristics) and managerial approach (managerial characteristics/strategy related). The present article is aimed to explore the several challenges faced by the MSMEs in order to have access of financial resources where the finance is said to be the oxygen of any organisation. The variables considered for the study are size of the business, type of ownership of the business and type of business. The study is restricted to only Guntur and Krishna districts of Andhra Pradesh, India. To attain the objectives of the study, we intend to make use of primary and secondary data. Data purifier tests are being used in the study to know the suitability of the data for analysis. The linear assumption, normality assumption, multicollinearity assumption and homoscedasticity assumption are used under regression analysis. The results indicate that there is a strong relationship between size of the business and accessibility of the firm. It means that the size of the business has a positive impact over the availability of financial resources for the business. The moderate impact could be found between type of ownership and accessibility of financial resources whilst the same pattern exhibited in between type of business and availability of financial resources. It could be concluded that the size of the firm provide leverage for the accessibility of financial resources, and thereby this intact acts an insulator for the growth of MSMEs in a great extent comparatively the rest of the two.