A STUDY ON SCOPE OF EXTERNAL EQUITY FINANCE IN MSME UNITS IN INDIA.

The Micro, Small and Medium Enterprises are back bone of the India. They contribute the significant amount to the GDP. They are located equally in both urban and rural areas and it provides high employment. So the governments also taking many actions to the growth of the MSME sector. Even though, the MSMEs in India are still struggle to survive, most of the MSME run loss or very smaller profit. The key issue of the MSME sector is funding. They cannot be able to raise as much funds from public for meet out their requirements. The MSMEs are mainly depend on the debt from other sources rather than banks. Now the MSMEs have many alternative sources to raise the funds. In that sources the external equity is one of the important sources to raise the investment. They have own advantage while considering other sources of finance. It is one of the less used sources of finance by the MSMEs. It is most suitable finance source to the MSMEs. The equity finance will help to avoid some of the major drawbackslike repayment, fixed interest payment of the MSMEs for raising and using of funds.