Government must take steps to promote flow of funding to Micro, Small and Medium Enterprises (MSMEs) in order to ensure growth in the sector, a survey shows.
According to a Ficci-Grant Thornton survey, inadequate credit facility is one of the factors that thwart the expansion plant of majority of companies in the sector.
Therefore, there is a need for a greater role of the government in terms of regulatory compliance and easier access to finance, the survey titled 'Integrating MSMEs with the Global Value-Chain' points out.
The survey, which covered over 100 MSMEs across the country, shows inadequate credit availability, lack of marketing coupled with regulatory hurdles have hindered plans of MSMEs to establish their base abroad.
Almost 90 per cent of respondents of the survey said they are looking to expand their business in the future but are bogged down because of a number of factors including inadequate credit facility, lack of marketing techniques, regulatory hurdles and difficulty in establishing contacts with the global players.
The MSME sector contributes over 8 per cent to the country's Gross Domestic Product (GDP) and accounts for 36 per cent to exports, it said.
Its share in the manufacturing sector is 45 per cent. There are around 3.6 crore such enterprises, employing over 8 crore people.