Review of Professional Management

Bridging the Gap in Financial Inclusion and Empowering Small Businesses: Evidence from North-East India

Ashraf Rehman¹

First Published 2 Dec 2024. https://doi.org/10.1177/09728686241289244

Article Information

Corresponding Author:

Ashraf Rehman, Independent Researcher and Post Graduate Economics Student, Sikkim University, Gangtok, Sikkim 737102, India.
Email: ashrafrehman41@gmail.com

A part of this article entitled ‘Determinants of the Microfinance Institutions: An Empirical Study of the Dimapur District of Nagaland’ was presented at 63rd International Labour Economics Conference of The Indian Society of Labour Economics held at Rajiv Gandhi University, Arunachal Pradesh, during 1–3 March 2023.

¹ Sikkim University, Gangtok, Sikkim, India

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 License (http://www.creativecommons.org/licenses/by-nc/4.0/) which permits non-Commercial use, reproduction and distribution of the work without further permission provided the original work is attributed.

Abstract

This study aims to investigate the significant impact of microcredit on small businesses and entrepreneurs in north-east India. The research employed a primary survey approach, gathering responses from 205 small business owners through purposive sampling. The analysis utilised a probit model to assess the data, highlighting that factors such as the business’s status, participation in awareness programmes by entrepreneurs, operating the business from home and other relevant variables play a crucial role in determining access to microcredit. The findings point out that the businesses experiencing decline are more likely to access credit from microfinance institutions. Also, there is a significant correlation between awareness programmes attended by the entrepreneurs and access to microfinance services. These findings suggest that an increase in the awareness programme participation by entrepreneurs will significantly encourage access to microfinance services.

Keywords

Access to microcredit, financial inclusion, microfinance institutions, small business, small business management, status of business

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