Mediating effect of utilisation in the relation between loan services from PSBs and capital formation of MSMEs: a study of Purba and Paschim Medinipur districts of West Bengal

Sajijul Islam () and Debdas Ganguly ()
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Sajijul Islam: Hijli College
Debdas Ganguly: EIILM, Kolkata

Journal of Global Entrepreneurship Research, 2019, vol. 9, issue 1, 1-16

Abstract: Abstract The micro, small, and medium enterprises (MSMEs) have been acknowledged as the engine of economic growth and for promoting equitable progress all over the world. Let there be any category of countries, the existence of MSMEs is predictable. The MSME sector is playing a pivotal role majorly in employment generation at low capital cost. Purpose In this background, the present study is chosen to explore the factors considered under the utility of loan services provided by the public sector banks. With this, the authors have tried to establish a relation between the factors under the utility of loan, utilisation of fund, and capital formation in the MSMEs. Design/methodology To achieve the aforesaid objectives analysis is done on the basis of primary data. The primary data has been collected from 271 respondents. The respondents are the entrepreneurs of the two selected districts of the present study. In the study, the researchers have applied exploratory factor analysis, confirmatory analysis, multiple regressions, and path analysis of the structural model. The researchers have made a deliberate attempt to build a model on the relation between utility of loan service (ULS), utilisation of fund (UF), and capital formation (CF) across the enterprises. Findings The model of the present study exposes that loan services provided by public sector banks are influencing to utilise the fund effectively by the entrepreneurs but not directly influencing in the formation of capital.

Keywords: Public sector banks; Utility of loan service; Utilisation of fund; Capital formation; MSMEs; G21; G24; H81; L26; L31; L32 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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DOI: 10.1186/s40497-019-0181-3

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