“Microfinance Bank, A panacea for SME’s sickness” A Case of Gulbarga District, Karnataka

Mallikarjun Tippanna Bali, Dr. Pralhad P. Rathod



This study investigated the impact of microfinance on SMEs growth in Gulbarga District, Karnataka. The population of the study consists of the SMEs in Gulbarga. However, the study was restricted to Gulbarga metropolis. Purposive sampling technique was used to select the participating SMEs. Simple random sampling technique was used to select a total of 25 SME operators that constituted our sample size. Pearson correlation coefficient and multiple regression analysis were used to analyze the data. The outcome from this study showed that financial services obtained from Microfinance Banks (MFBs) have positive significant impact on SMEs growth in Gulbarga. The results also revealed that duration of loan has positive impact on SMEs growth but not statistically significant. The results also showed that high interest rate, collateral security and frequency of loan repayment can cripple the expansion of SMEs in Gulbarga. The paper recommended that MFBs should lighten the condition for borrowing and increase the duration of their customers’ loan and also spread the repayment over a long period of time.

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ISSN : 2251-1547