Sectoral Preferences, Enterprise Viability, and Loan Repayment Performance Under PMEGP: A Mixed Methods Study from Jammu and Kashmir, India (Asian Development Policy Review)

Summary

• Quantitative data were collected from 361 beneficiaries, comprising 145 manufacturing, 213 service and 3 trading enterprises.p.1
• Qualitative evidence came from 48 key informants, including 30 bank officials and 18 officials from implementing and supporting institutions.p.1
• 59% of enterprises were in the service sector, followed by manufacturing (40.17%) and trading (0.83%).p.9
• 132 of 145 manufacturing accounts (91.03%) were standard, compared with 153 of 213 service accounts (71.83%).p.14
• Among service enterprises, 15.49% of accounts were sub-standard, 7.51% doubtful and 5.16% loss.p.14

Key insights

1. The service sector dominates PMEGP enterprises, suggesting beneficiaries prefer businesses that require less investment and offer easier market entry.p.9
2. Only three beneficiaries (0.83%) belonged to the trading sector, so conclusions on trading should be interpreted with caution.p.9
3. The sectoral preference scale had 13 items and a Cronbach's alpha of 0.74 across a sample of 361.p.10
4. The Kaiser-Meyer-Olkin measure was 0.742, showing the data were suitable for factor analysis.p.10
5. Manufacturing enterprises showed comparatively stronger repayment performance than service enterprises despite being a smaller share of the sample.p.11
6. Of the 361 beneficiary accounts, 288 were classified as standard and 73 fell into the sub-standard, doubtful or loss categories.p.11
7. Market-related considerations were the most significant factor influencing enterprise choice among PMEGP beneficiaries.p.13
8. The chi-square association between sector and repayment classification is statistically significant, but it is not causal.p.14