While Rs 45 lakh crore would be the total credit demand for the micro, small and medium enterprises (MSME) sector over the medium term, about Rs 5.15 lakh crore needs to be mobilised to address the near-term requirement, noted an ASSOCHAM-Crisil joint study.

"Finance related issues pose the biggest challenge among the host of other factors hindering growth of MSMEs in the country - infrastructure, government policy, marketing, technology and others," highlighted an ASSOCHAM-Crisil joint study titled ‘Emerging enterprises.'

"Fund raising is a constant issue for MSME sector while key concerns such as information asymmetries, lack of collateral, low risk appetite of lenders and lack of knowledge of players also act as road blocks," it said.

MSMEs also experience cash-flow problems due to slow moving or excessive stock, which gives rise to poor stock or inventory management, too generous credit terms, cash watered on unprofitable products or services, and unnecessary expenditure (money spent on buildings, houses, luxury cars) as well as drawings.

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