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Impact of Credit Accessibility on the Earnings of Self-employed Businesses in India

Indrajit Bairagya, Tulika Bhattacharya and Manojit Bhattacharjee

Journal of Asian Economics, 2020, vol. 69, issue C

Abstract: The study assesses the impact of credit accessibility on the earnings of self-employed small businesses in India. Using unincorporated non-agricultural enterprises survey data provided by National Survey Sample Organisation (NSSO) on the Indian economy for the year 2015-16, the paper shows that access to credit augments earnings of self-employed businesses. The paper also separately shows the impact of credit availed from formal and informal lending agencies on self-employment earnings. Interestingly, we observe that both these lending agencies have a positive impact, even though the terms and conditions are not favourable in the informal market. Based on our findings we suggest for creation of informal-formal credit linkage programme akin to that of SHG bank linkage programme in which enterprises that do not possess accessibility to formal sources due to absence of collateral can also get formal credits through informal lenders at favourable terms and conditions.

Keywords: Access to finance; Self-employment; Earnings (search for similar items in EconPapers)
JEL-codes: G21 L26 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:69:y:2020:i:c:s1049007820300828

DOI: 10.1016/j.asieco.2020.101202

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