FINANCIAL INCLUSION AND ENTREPRENEURSHIP: A STUDY OF MICRO ENTERPRISES IN AIZAWL DISTRICT, MIZORAM

Abstract

This paper emphasizes the need of active cooperation between banks and micro entrepreneurs for the promotion of entrepreneurship which depend mostly on private money lenders, relatives and friends to meet their credit needs. The present study is based on a sample study of 406 micro entrepreneurs covering rural and urban areas of Aizawl district, Mizoram. It was observed that the biggest problems faced by the entrepreneurs with regard to finance was reluctance by financial institutions to extent credit. It was found that only 8.4% of the entrepreneurs have access to banks for their credit needs. The rural marginal people who needs credit for production and consumption depends on costly informal loan from money lenders. The paper suggests that for reaching out the majority of the micro entrepreneurs, too much official formalities should be done away and simplification on application procedure is needed. It was also suggested that the need for better coordination and mutual trust and faith between commercial banks and the entrepreneurs.