Government Scheme Awareness and Its Impact on the Performance and Survival of MSMEs: Evidence from Mysuru District

Abstract

Micro, Small, and Medium Enterprises (MSMEs) are supported by an extensive architecture of Central and State Government schemes designed to ease access to credit, collateral relief, and market participation. However, the extent to which target enterprises are actually aware of, and utilize, these schemes — and whether utilization translates into measurable business outcomes — remains uncertain at the district level. The present study examines the awareness, accessibility, and utilization of Central and State Government schemes among MSMEs in Mysuru, and the impact of core financial schemes on overall MSME performance and survival. The study adopts a quantitative, empirical research design based on primary data collected through a structured questionnaire administered to 200 MSMEs in Mysuru. Awareness and utilization were measured on a 5-point scale (1 = Not Aware to 5 = Actively Utilizing) across eight Central and State schemes, and overall performance and survival was measured as a composite of four self-reported business outcome items. The findings show that awareness and utilization remain low overall: the highest-rated schemes — the Pradhan Mantri MUDRA Yojana (PMMY, mean = 1.51), the Prime Minister's Employment Generation Programme (PMEGP, mean = 1.35), and the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE, mean = 1.34) — all remained closer to “Not Aware” than to any stage of active use, and between 64% and 97% of respondents reported no awareness of any individual scheme. A multiple regression of the four core financial schemes on overall performance and survival was statistically significant (R² = .428, F(4,195) = 36.419, p < .001), with PMMY (β = .402, p < .001) and CGTMSE (β = .442, p < .001) each showing a significant positive relationship with performance, while the Chief Minister's Employment Generation Programme (CMEGP) showed a significant negative relationship (β = −.244, p = .001) and PMEGP showed no significant relationship (β = .047, p = .477). Overall, the study shows that despite decades of scheme proliferation, awareness remains the primary bottleneck to MSME scheme access in Mysuru, and that utilization of the schemes MSMEs do know about is a significant, though uneven, predictor of business performance and survival.