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Financial Access and Business Performance of Urban Unorganised Sector Enterprises: A Study of Assam in Northeast India

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  • Prasenjit Bujar Baruah
  • M. P. Bezbaruah

Abstract

The urban unorganised sector has been a dominant characteristic feature of the developing countries providing livelihood to a disproportionately large number of households for prolonged period. However, enterprises in this sector are often stunted by myriads of problems among which meagre access to formal financial services is a crucial constraint, as access to other enabling conditions often hinges upon access to finance. This article is based on a study of such enterprises in the Northeast Indian state of Assam, where access to finance is relatively limited in general. Using inputs from a customised survey, the article explores the extent to which the accessibility of financial services influences the growth and financial performance of the unorganised sector enterprises in Assam. Tools employed include a customised financial access index, a generalised linear model and an ordered LOGIT regression. The results show that the financial performance of the enterprises is not significantly associated with the extent of their financial access, but their growth is critically dependent on it.

Suggested Citation

  • Prasenjit Bujar Baruah & M. P. Bezbaruah, 2020. "Financial Access and Business Performance of Urban Unorganised Sector Enterprises: A Study of Assam in Northeast India," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 29(1), pages 119-147, March.
    • Handle: RePEc:sae:jouent:v:29:y:2020:i:1:p:119-147
    DOI: 10.1177/0971355719893502
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    References listed on IDEAS

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    1. Bhavani, T.A. & Bhanumurthy, N.R., 2012. "Financial Access in Post-Reform India," OUP Catalogue, Oxford University Press, number 9780198076650.
    2. Subika Farazi, 2014. "Informal Firms and Financial Inclusion: Status and Determinants," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 1-28.
    3. Jong-Hee Kim, 2016. "A Study on the Effect of Financial Inclusion on the Relationship Between Income Inequality and Economic Growth," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(2), pages 498-512, February.
    4. Christopher Blattman & Eric P. Green & Julian Jamison & M. Christian Lehmann & Jeannie Annan, 2016. "The Returns to Microenterprise Support among the Ultrapoor: A Field Experiment in Postwar Uganda," American Economic Journal: Applied Economics, American Economic Association, vol. 8(2), pages 35-64, April.
    5. Farazi, Subika, 2014. "Informal firms and financial inclusion : status and determinants," Policy Research Working Paper Series 6778, The World Bank.
    6. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    7. World Bank, 2008. "Finance for All? Policies and Pitfalls in Expanding Access," World Bank Publications - Books, The World Bank Group, number 6905, December.
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    Cited by:

    1. Abraham Abebe & Meketaw Kegne, 2023. "The role of microfinance institutions on women’s entrepreneurship development," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-24, December.

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