The impact of digital banking on the growth of Micro, Small and Medium Enterprises (MSMEs) in India: a case study
Abstract
Purpose: The purpose of this paper is to formulate a multiple regression model by considering those factors which are positively affecting the growth of Micro, Small and Medium Enterprises (MSMEs) in India. Methodology: The data used in this study are primary in nature which are collected through questionnaire method. The questionnaire involves the nature and size of business and opinion of the owners and managers of 454 MSMEs in Katihar district, a semi-urban area of Bihar in India, regarding the various favourable factors of digital banking on a Likert scale of 1 to 10. Findings: The findings of the study suggest the various favourable factors of digital banking with significant coefficients i.e. Level of Easiness in accepting payments, Level of Easiness in making payments, Level of Easiness in Managing the expenditure of Business, Level of Time Saving, and Level of Check on Misappropriation or Theft of Cash are contributing towards the growth of MSMEs in India. Research Implications: This research will be helpful to the bank managers and policy makers to encourage the MSMEs of semi-urban areas to use digital banking by stressing on only significant favourable factors and also to take necessary steps so that the MSMEs could reap the full benefits of digital banking. The study could give a new insight regarding the extent of contribution of digital banking towards the growth of MSMEs in rural and semi-urban area.
Keyword : MSMEs, digital banking, e-banking, multiple regression, customer, business
How to Cite
Meher, B. K., Hawaldar, I. T., Mohapatra, L., Spulbar, C., Birau, R., & Rebegea, C. (2021). The impact of digital banking on the growth of Micro, Small and Medium Enterprises (MSMEs) in India: a case study. Business: Theory and Practice, 22(1), 18-28. https://doi.org/10.3846/btp.2021.12856
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Nguyen, T. D., Nguyen, T. Q., Nguyen, T. V., & Tran, T. D. (2019). Intention to use M–banking: the role of E–WOM. In Advances in Intelligent Systems and Computing, 940, 215–229. Springer. https://doi.org/10.1007/978-3-030-16657-1_20
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Pinto, P., Hawaldar, I. T., Quadras, J. M., & Joseph, N. R. (2017a). Capital structure and financial performance of banks. International Journal of Applied Business and Economic Research, 15(23), 303–312.
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Spulbar, C., & Nițoi, M. (2012). Comparative analysis of banking systems (Sisteme bancare comparate) (526 p.). Sitech Publishing House Craiova.
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Spulbar, C., & Niţoi, M. (2013). Monetary policy transmission mechanism in Romania over the period 2001 to 2012: a BVAR analysis. Scientific Annals of the “AlexandruIoanCuza” University of Iasi, Economic Sciences Section, 60(2), 387–398. https://doi.org/10.2478/aicue-2013-0018
Templeton, G. F. (2011). A two-step approach for transforming continuous variables to normal: implications and recommendations for IS research. Communications of the Association for Information Systems, 28(4), 41–58. https://doi.org/10.17705/1CAIS.02804
Vishnuvardhan, B., Manjula, B., & Naik, R. L. (2020). A study of digital banking: Security issues and challenges. In Advances in Intelligent Systems and Computing, 1090, 163–185. Hyderabad. https://doi.org/10.1007/978-981-15-1480-7_14
Aliyu, A. (2012). The impact of electronic banking on customer service delivery in the Malaysian banking industry: using Sand Cone model. TIJ’s Research Journal of Science & IT Management, 1(11), 11–22. http://www.theinternationaljournal.org/ojs/index.php?journal=rjitsm&page=article&op=view&path%5B% 5D=1235
Alkhowaiter, W. (2020). Digital payment and banking adoption research in Gulf countries: A systematic literature review. International Journal of Information Management, 53. https://doi.org/10.1016/j.ijinfomgt.2020.102102
Askari, F. (2018). MSME Registration Under UdyogAadhaar Reached 48 Lakh. https://smestreet.in/editorial/msme-registration-under-udyog-aadhaar-reached-48-lakh/
Chawla, D., & Joshi, H. (2019). Consumer attitude and intention to adopt mobile wallet in India – An empirical study. International Journal of Bank Marketing, 37(7), 1590–1618. https://doi.org/10.1108/IJBM-09-2018-0256
Dhanya, B. K., & Velmurugan, V. P. (2020). Perception towards the problems of e-banking among the new users at Thiruvananthapuram District. Journal of Critical Reviews, 7(1), 474–477. https://doi.org/10.31838/jcr.07.01.93
Farida, M. N., & Subroto, W. T. (2019). Effect of mobile banking and online shopping on consumer behavior. International Journal of Educational Research Review, 4(2), 154−161. https://doi.org/10.24331/ijere.517977
Hawaldar, I. T., Spulbar, C., Lokesha, Birau, R., & Rebegea, C. (2020). Analyzing non-performing assets in agricultural loans: a case study of India. Revue des Sciences Politiques, 65, 42–53.
Hawaldar, I. T., Lokesha, Kumar, K. A., Pinto, P., & Sison, S. M. (2017). Performance analysis of commercial banks in the kingdom of Bahrain (2001–2015). International Journal of Economics and Financial Issues, 7(3), 729–737.
Jauhari, S., Indapurkar, K., Maheswari, D., & Raj, M. (2018). A study of the impact of youth towards digital financial instruments in the wake of demonetization of 2016 in India. Shodhaytan – AISECT University Journal, 5(9), 83–100.
Koroleva, E. V., & Kudryavtseva, T. (2019). Factors influencing digital bank performance. In Digital Science 2019 – Advances in Intelligent Systems and Computing, 1114, 325–333. Springer. https://doi.org/10.1007/978-3-030-37737-3_29
Kumar, A. (2017). Demonetization and cashless banking transactions in India. International Journal of New Innovations in Engineering and Technology, 7(3), 30–36.
Lokesha, & Hawaldar, I. T. (2018). Impact of factors on the utilization of agricultural credit of banks: an analysis from the borrowers’ perspective. Banks and Bank Systems, 14(1), 181–192. https://doi.org/10.21511/bbs.14(1).2019.16
Lokesha, Hawaldar, I. T., & Ishwara, P. (2017). An evaluation of pre-and post-sanction process in agriculture credit by banks. International Journal of Economic Research, 14(14), 151–165.
Mararo, M. W., & Ngahu, S. (2017, October). Influence of mobile money services on the growth of SME in Nakuru Town Kenya. IOSR Journal of Humanities and Social Science, 22(10), 64–72.
Mbah, S., & Obiezekwem, J. (2019). Electronic banking and performance of small and medium scale enterprises in Anambra State, Nigeria. International Journal of Business and Management, 14(6), 173–180. https://doi.org/10.5539/ijbm.v14n6p173
Mehdiabadi, A., Tabatabeinasab, M., Spulbar, C., Karbassi Yazdi, A., & Birau, R. (2020). Are we ready for the challenge of Banks 4.0? Designing a roadmap for banking systems in Industry 4.0. International Journal of Financial Studies, Special Issue “The Financial Industry 4.0”, 8(2), 32. https://doi.org/10.3390/ijfs8020032
Meher, B. K., & Gupta, A. K. (2020a). Factors adversely affecting the usage of digital banking by MSMEs in India (a case study of Katihar District in Bihar). Journal of Xidian University, 14(3), 1692–1701. https://doi.org/10.37896/jxu14.3/171
Meher, B. K., & Gupta, A. K. (2020b). Substantial effect of digital banking in the growth of MSMEs in India (a case study of Katihar District in Bihar). Studies in Indian Places Names, 40(56), 940–957.
Muchiri, J. W. (2018). Effect of mobile banking adoption on the performance of small and medium enterprises in Nairobi County. International Journal of Economics, Business and Management, 2(4), 445–486.
Nazaritehrani, A., & Mashali, B. (2020). Development of Ebanking channels and market share in developing countries. Financial Innovation, 6(12), 1–19. https://doi.org/10.1186/s40854-020-0171-z
Neog, N. (2019). Usage of digital banking services by rural population: A study in Sivasagar district of Assam. International Journal of Scientific and Technology Research, 8(12), 3301–3304.
Nguyen, O. T. (2020). Factors affecting the intention to use digital banking in Vietnam. Journal of Asian Finance, Economics and Business, 7(3), 303–310. https://doi.org/10.13106/jafeb.2020.vol7.no3.303
Nguyen, T. D., Nguyen, T. Q., Nguyen, T. V., & Tran, T. D. (2019). Intention to use M–banking: the role of E–WOM. In Advances in Intelligent Systems and Computing, 940, 215–229. Springer. https://doi.org/10.1007/978-3-030-16657-1_20
Patra, N., & Ray, N. (2015). Customer perception of the quality of online banking services (with special reference to SBI and ICICI): A study on chaos and a complexity perspective. In Chaos, Complexity and Leadership (p. 291). Springer.
Pinto, P., Hawaldar, I. T., Quadras, J. M., & Joseph, N. R. (2017a). Capital structure and financial performance of banks. International Journal of Applied Business and Economic Research, 15(23), 303–312.
Pinto, P., Hawaldar, I. T., Rahiman, H. U., & Rajesh, T. M. (2017b). An evaluation of financial performance of commercial banks. International Journal of Applied Business and Economic Research, 15(22), 605–618.
Spulbar, C., & Birau, R. (2019). Emerging research on monetary policy, banking, and financial markets (322 p.). IGI Global USA (formerly Idea Group Inc.). https://doi.org/10.4018/978-1-5225-9269-3
Spulbar, C., & Nițoi, M. (2012). Comparative analysis of banking systems (Sisteme bancare comparate) (526 p.). Sitech Publishing House Craiova.
Spulbar, C., Niţoi, M., & Stanciu, C. (2012). Monetary policy analysis in Romania: A Bayesian VAR approach. African Journal of Business Management, 6(36), 9957–9968. https://doi.org/10.5897/AJBM11.1150
Spulbar, C., & Niţoi, M. (2013). Monetary policy transmission mechanism in Romania over the period 2001 to 2012: a BVAR analysis. Scientific Annals of the “AlexandruIoanCuza” University of Iasi, Economic Sciences Section, 60(2), 387–398. https://doi.org/10.2478/aicue-2013-0018
Templeton, G. F. (2011). A two-step approach for transforming continuous variables to normal: implications and recommendations for IS research. Communications of the Association for Information Systems, 28(4), 41–58. https://doi.org/10.17705/1CAIS.02804
Vishnuvardhan, B., Manjula, B., & Naik, R. L. (2020). A study of digital banking: Security issues and challenges. In Advances in Intelligent Systems and Computing, 1090, 163–185. Hyderabad. https://doi.org/10.1007/978-981-15-1480-7_14