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Business challenges of the nascent and mature micro small and medium enterprises (MSMEs): a comparative analysis from India

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Abstract

The study aims to identify the major business challenges of the Indian MSMEs at two different stages of business development, i.e. nascent (while establishing) and mature (operational for at least 5 years) as many MSMEs succumb within their initial years of establishment. Built on a sample of 320 registered MSMEs from Assam, India, it uses a schedule for data collection. The schedule comprises 32 challenges for the nascent MSMEs and 39 challenges for the mature MSMEs. The responses are captured in 5-point Likert scale. The study uses principal component analysis to meaningfully compress data into smaller groups. With the thumb rule of Eigenvalue greater than 1, six challenges for the nascent and seven challenges for the mature MSMEs are extracted as the new principal components (PCs). The six PCs/challenges hence found for the nascent MSMEs are as follows: marketing and infrastructural bottleneck, capital inaccessibility, dearth of entrepreneurial education and training, stringent government policies, paucity of appropriate business support and assistance and limited accessibility to resources. Likewise, the seven PCs/challenges for the mature MSMEs are as follows: inappropriate marketing strategy, capital inaccessibility, paucity of appropriate business support and assistance, limited accessibility to resources, stringent government policies, infrastructural bottleneck and dearth of entrepreneurial education and training. Furthermore, mean scores are calculated for these challenges and comparing the highest mean of all the challenges, and marketing and infrastructural bottleneck with a mean of 29.57 is rated as the most significant challenge for the nascent MSMEs whereas capital inaccessibility (36.39) is the first ranked challenge for the mature MSMEs.

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Authors and Affiliations

  1. Department of Humanities and Social Sciences, Indian Institute of Information Technology Guwahati, Guwahati, Assam, India

    Ankita Sarmah

  2. Department of Economics, Handique Girls’ College, Guwahati, Assam, India

    Bedabrat Saikia

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  1. Ankita Sarmah
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AS collected the primary data and analyzed and interpreted them. AS has also drafted the manuscript. BS was a major contributor in writing the manuscript. All authors read and approved the final manuscript.

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Correspondence to Ankita Sarmah.

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Sarmah, A., Saikia, B. Business challenges of the nascent and mature micro small and medium enterprises (MSMEs): a comparative analysis from India. J Glob Entrepr Res 13, 20 (2023). https://doi.org/10.1007/s40497-023-00364-2

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