Credit Constraints among Unincorporated Enterprises in India: An Empirical Investigation Using Unit-Level ASUSE Data

Shivani Badola () and Sacchidananda Mukherjee
Additional contact information
Shivani Badola: Institute for Studies in Industrial Development

Working Papers from National Institute of Public Finance and Policy

Abstract: Credit constraints often hinder investment in unincorporated enterprises, limiting innovation and overall performance, including reduced productivity and output, and slower growth. In this paper, we assess credit constraints on unincorporated enterprises using NSSO’s unit-level data from the Annual Survey of Unincorporated Enterprises 2022-23. Identifying the factors and determinants of credit constraints is crucial for informing policy recommendations. Based on sources of outstanding loans and survey responses, we classify enterprises into three categories: fully constrained, partially constrained, and not constrained. We find that manufacturing enterprises face more credit constraints than those engaged in trading and services. Furthermore, the study indicates that female entrepreneurs and those belonging to SC/ST or OBC castes face comparatively greater credit constraints than others. Other factors, such as region (rural vs. urban), size (annual turnover and asset value), GST registration status, price-cost margin, etc., are strong determinants of credit constraints or access to credit.

Keywords: Unincorporated Enterprises; Credit Constraints; Manufacturing; Multinomial logit model; India (search for similar items in EconPapers)
JEL-codes: C35 E51 G20 L60 (search for similar items in EconPapers)
Date: 2026-06
Note: Working Paper 449, 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.nipfp.org.in/media/documents/WP_449_2026.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:npf:wpaper:26/449

Access Statistics for this paper

More papers in Working Papers from National Institute of Public Finance and Policy
Bibliographic data for series maintained by S.Siva Chidambaram ( this e-mail address is bad, please contact ).