K.P. Singh and Kishori Pradad Management of Working Capital in Small Enterprises in Bihar: An Empirical Study

The small scale industries are the backbone of Indian economy with their manifold combinations. The incidence of sickness is very high in small scale enterprises and the major causes of their sickness can be attributed to shortage as well as mismanagement of working capital. The universe of the study constituted the small enterprises in the state of Bihar. The paper is based on the exploratory nature of work where mainly primary data were used. The variables namely (i) the organizational groups, (ii) age groups and (iii) investment groups have been taken for the study. The study reveals that a large number of entrepreneurs are not aware of the bases to be used for determining the requirement of working capital. The main sources of financing the requirement of working capital is the ownership capital followed by bank loans, made exists and loans from friends and relation. The procure loans from banks is a cumbersome process in Bihar with huge expenditure en entertaining bank officials and time consuming process in employing with too many formalities required. The overall picture of working capital financing of small scale enterprises in Bihar is depressing and disappointing.