Using ICT to help MSMEs prosper- a qualitative analysis of mobile based financial training in Bangalore
Student name: Ms Kanika Joshi
Guide: Dr Sukanya Das
Year of completion: 2016
Host Organisation: Institute of Financial Management and Research
Supervisor (Host Organisation): Mr John Victor Arunkumar
Abstract: Micro, Small and Medium Enterprises (MSMEs) have over 26 million formal and
informal firms, employing more than 69 million people, who account for 40% of
total exports and 45% of total manufacturing output. They are a crucial source for
employment and socio-economic development of the nation but, even with a lot of
skills MSME owners often miss out in terms of opportunities. It has been identified
that Micro entrepreneurs in developing countries face complex financial decisions
in their personal or business finances. To overcome challenges, thinking of
innovative and scalable ways using mobile based platforms for financial literacy
advice and consulting might be an efficient way to deliver such training.
Technological development is a catalyst not only for growth among India’s MSMEs,
but for the growth of the Indian economy as a whole. Drawing an inspiration from a
similar study on small businesses in Dominican Republic and the successful rule-ofthumb
training run there, this investigation will try to identify if lack of financial
training is a limiting factor to growth of MSMEs and if ICT based training can help
them overcome this stress. This study examines the treatment group of a randomized
evaluation on MSMEs for business advice by IFMR-Janalakshmi-Ideas42 being
conducted in the capital of Karnataka, Bangalore. There is a gap in the literature in
terms of the qualitative aspects of such trainings; thus, the data was collected
through personal inquiry and semi structured interviews, thereafter responses of 31
businesses was analysed with the help of survey data. The empirical results suggest
financial literacy is a major challenge that MSMEs face and explores ICT based
trainings provided to MSMEs which have shown mixed results in the literature
present. It concludes by providing indication through qualitative aspects that
providing such trainings can help MSMEs prosper.
Keywords: financial literacy, MSMEs, ICT based training, Bangalore
