International Journal of Accounting Research

Abstract

Impact of Global Economic and Financial Crisis on Micro, Small andMedium Enterprises in Tamil Nadu - A longitudinal analysis

Velmurugan P

Global Financial Meltdown (GFM) has become a global phenomenon. It is causing hollowness in the economies around the world. The GFC (Global Financial Crisis) has led to financial crunch all over the developed economies by thereby lowered down the purchasing power of people. This has resulted the developed economies has been slipped into economic recession. The global financial crisis has been affecting the prospects of developing economies, especially the SME sector. The SME units are facing multiple challenges, viz., demand shock, price volatility, high cost of credit, general credit tightening, shortage of trade finance, and protectionist measures in their export markets. In India too, a number of steps have been taken to counter the impact of economic slowdown on the SME sector. MSMEs are the best vehicle to create local demand and consumption and also to fight the global meltdown. Micro, Small, and Medium enterprises are playing a vital role in providing additional employment opportunities and removing regional imbalance in the country. An attempt has been made to analyse the impact of the global financial crisis on the Micro, Small and Medium Enterprises (MSMEs) in Tamil Nadu, state, India. The present study has analysed secondary data during the period from 1990-91 to 2010-11. The study has found that total MSME, investment, production and employment opportunities are affected with negative trend line by the GFC.