Abstract:
This paper investigates the role of Insurance in the development of MSMEs in India. Micro, Small and
Medium Enterprises (MSMEs) have been accepted as a crucial component of an economy irrespective of the
phase of development it is in. It is estimated that more than 95% of the enterprises across the world are
MSMEs, employing around 60% people in the private sector. In India MSME sector contributed 28.77% in
GDP in 2016-17 with 63 million enterprises and employment of 110 million people. Despite its size, MSMEs
cumulatively act as foundation of a stable economy and plays a significant role in the sustainable economic
growth of a nation. However, the inherent features of MSMEs including limited financial and managerial
capability cause them to face financial and strategic risks. Sustainability of the MSMEs can be supported by
eliminating the credit gap and ensuring enhanced access to finance. The provision of financial support by
financial intermediaries like banks can be augmented with proper risk management by the MSMEs with the
help of Insurance Sector. The study concludes that insurance can play a significant role in the development of
MSMEs by providing them adequate risk protection and thus enhancing their access to finance.
Description:
Thirteenth Biennial Conference on Entrepreneurship/ Edited by Sasi Misra, Sunil Shukla, Ganapathi Batthini
