The Entrepreneurship Awareness and access of MSMEs Schemes: A study of Madhepura District, Bihar

Corresponding Author Email: bishwajeetdr@gmail.com

DOI : https://doi.org/10.51470/BITS.2026.05.02.22

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Introduction

Micro, Small, and Medium-sized Enterprises (MSMEs) contribute significantly to economic development by creating jobs, innovating, and promoting equitable growth. To assist entrepreneurs, the Government of India has launched a number of schemes, including Udyam Registration, PMEGP, MUDRA, and CGTMSE. However, the success of these initiatives is heavily dependent on entrepreneurs’ awareness and understanding of these programs. Lack of awareness may result in underutilization of the benefits, undermining the purpose of such interventions. Government programs aimed at MSMEs play an important role in increasing business sustainability by improving access to finance, promoting formalization, and encouraging innovation. According to [13], when properly accessed and used, such schemes can act as catalysts for entrepreneurial growth. However, [4] note that awareness of these schemes is unevenly distributed, with rural and semi-urban entrepreneurs frequently lacking the necessary information and support to benefit from these initiatives. Despite the existence of numerous supportive programs, entrepreneurs face a variety of obstacles that limit awareness and access. [1] identify key barriers such as insufficient government outreach, bureaucratic complexity in application procedures, and low digital literacy—particularly among micro-enterprises and first-generation entrepreneurs. These factors all contribute to the underutilization of potentially transformative policy tools. 

2. Literature Review:

Entrepreneurship injects a critical element of dynamism into an economy. The process of globalization and liberalization has brought about a number of changes, including the introduction of dynamism into the system. Micro, small, and medium-sized enterprises (MSMEs) provide a solid foundation for India’s economic development and growth. MSMEs are regarded as the foundation for almost all countries’ industrial endeavors, including India. They assist large corporations around the world in making contributions. In terms of India’s economic development and progress, these MSMEs have played a significant role. The Indian government has periodically taken various initiatives to promote entrepreneurship in the country. Entrepreneurship has captured the attention of Indian policymakers [5]. Micro, Small, and Medium-Sized Enterprises (MSMEs) in North Karnataka are greatly impacted by a number of firm-level and contextual factors regarding their awareness of government schemes. Firm size turns out to be a reliable predictor, with larger MSMEs generally showing greater awareness because of organized management, easier access to information, and resources specifically allocated to interacting with public policies [11]. The probability of scheme awareness is further influenced by sectoral disparities. Businesses that focus on manufacturing and exports are more likely to participate in government programs that support industrial policies and performance-based incentives [14]. However, because of fragmented market structures and low involvement in policy discussions, MSMEs in the service sector frequently fall behind [3]. According to [6], small business owners’ participation in government programs is greatly impacted by their ignorance. They discovered that more than 60% of rural microbusiness owners were ignorant of flagship programs like Stand-Up India and MUDRA. This disparity restricts the reach of financial support mechanisms and lessens the impact of policy. A key factor in the effective adoption of institutional and policy support is entrepreneurial awareness. Entrepreneurs with higher levels of education are more likely to look for outside assistance, such as government programs, which may affect the company’s participation in such programs [15]. Entrepreneurs who are knowledgeable about government initiatives are better able to use them for business development, claim [14]. In a similar vein, [10] stress that awareness greatly raises the possibility that entrepreneurs will apply for and profit from programs targeted at enterprise development, credit facilitation, and capacity building. [16] Claim that the informal and microbusiness sectors have not been sufficiently reached by information dissemination techniques like seminars, outreach through MSME portals, and bank advisory services. According to the study, the majority of entrepreneurs rely on social media or peer networks to find out about government assistance, which results in inconsistent or insufficient information. For MSMEs to make well-informed decisions about scheme participation, they must have access to timely and pertinent information. [4] Highlight the importance of digital media and other communication channels in spreading information about new and current MSME programs. According to their findings, entrepreneurs are more likely to stay informed and take advantage of government initiatives if they regularly receive information through digital platforms. Digital literacy and infrastructure, however, have a moderating effect on the frequency and dependability of information sources. A crucial measure of the efficacy of policies is still the actual use of MSME programs. A study by [6] found that despite the existence of several programs (like Udyam Registration, CGTMSE, and PMEGP), entrepreneurs are discouraged from applying due to bureaucratic barriers, difficult application procedures, and a lack of technical support. Due to documentation requirements or problems with digital literacy, even those who are aware of schemes frequently find it difficult to access them. Although awareness is important, it does not always result in scheme adoption, according to [9]. Entrepreneurs’ decision to participate in programs like the MUDRA loan program is influenced by a number of factors, including perceived benefits, documentation requirements, and procedural complexity. Their research emphasizes how crucial it is to streamline procedures and offer practical assistance in order to increase scheme uptake.

            According to [10], a regional analysis of MSMEs in Madhepura, business owners in urban Madhepura demonstrated greater awareness than those in rural Madhepura, but they still encountered obstacles to access. To increase outreach, they suggest integrating with regional trade associations and implementing focused awareness campaigns via District Industries Centers (DICs). In theory, accessibility has increased due to the digital transformation of government services (such as the Udyam registration portal), but in reality, many entrepreneurs, especially women and members of marginalized communities, have limited access due to digital illiteracy and a lack of handholding support, according to [7].

3. Research Gap

            The literature unequivocally demonstrates how important awareness is for entrepreneurs to be able to access and profit from government programs. There is little empirical research that focuses on entrepreneurs in the Madhepura district, which is overlooked in industrial development, despite the fact that studies conducted at the federal and state levels have found difficulties with awareness and scheme utilization. By evaluating the degree of awareness among business owners in the Madhepura district of Bihar, identifying the main information sources and obstacles to access, and offering evidence-based suggestions to enhance outreach and utilization of government programs, this study attempts to close this knowledge gap.

3.1 Research Objectives:

1. To assess entrepreneurs’ awareness of various MSME schemes in the Madhepura District.

 2. To investigate the relationship between demographic structure and awareness of MSME programs in a specific region.

 3. To assess the use of MSME schemes by entrepreneurs and identify major barriers in accessing and availing MSME schemes.

4. Research Methodology:

4.1Research Design:

The present study is descriptive and analytical in nature, based on a quantitative, cross-sectional field survey includes age, qualification, type of enterprises, and awareness of various government schemes and their utilization in the MSME sector in the Madhepura district of the state of Bihar. The study used a stratified sampling technique to ensure various section group representation, i.e sectors (manufacturing, service, trade); gender (male, female); and location (urban, semi-urban, rural cluster). The target respondents are only MSME owners and various entrepreneurs operating their enterprises in this region. The primary data has been collected through well designed structured questionnaire, with use of close ended questions and used 5 points likert scale to measure the government programs awareness level, utilization and major perceived barriers to adopt digital technology in their enterprises. In secondary data sources researchers includes MSMEs annual report, District Information Center data to support the result of primary survey. A total of 150 respondents have selected in this study, and Corbach alpha formula was used to support and validate the results to ensure statistical significance.

4.2 Data Analysis

Data analysis was involved descriptive statistical result, cross tabulation/sectional analysis, correlation, ANOVA test, Chi- square test and regression analysis to establish the relationship with different segments. This design supports the reliability, validity, and general ability of the findings by facilitating the objective measurement of variables and the identification of significant factors that influence awareness and use of MSME schemes.

5. Result & Finding

The result has been categorized in various section.

Section-A:

Demographic Structure: The demographic structure constitutes various representation of MSMEs sample. The demographic includes various segments of demographic structure include different segment of MSMEs. The Table 1 indicates micro enterprises are dominated with 142 sample (94.66%) followed by small enterprises sample only 8(5.33%) and no medium enterprises are available in Madhepura district hence we exclude medium enterprises from the survey. Next majority of entrepreneurs are male with 96 frequencies (64%) through female entrepreneurs participation is 54 (36%). In the age distribution 80% entrepreneurs are young to middle age (36-45 years) old it indicates that most young, energetic and innovative entrepreneurs are participated in the survey. In education attainment segment indicates that 63% approx entrepreneurs are below graduates who likely to indicates that they low technical and professional skill or knowledge to the entrepreneurs. Furthermore 46.66% of enterprises are working in service sectors, followed by manufacturing (33.33%) and trading only (22%) approx.Most of the enterprises established in urban (43.33%) and semi-urban (33.33%) area due higher connectivity with market and available of appropriate infrastructure available in the specific area.Finally most of the enterprises are operating their business for 1-7 years so it might be known as more knowledge about their market segments.

According to Table 1 the demographic profile, the engagement strategies for MSME schemes should capitalize on the urban concentration and low education levels, while also addressing the distinctive requirements of microenterprises and fostering greater inclusion in rural and semi-urban regions. The significant presence of female entrepreneurs and younger entrepreneurs is a promising indicator of future sectional growth and innovation.

Section-B: Awareness of MSME Schemes

In the section B authors ask various questions about the awareness of MSMEs schemes sponsored by central as well as state government. The 5 point likert scale has been used to evaluate the frequency of sample distribution with indicates 1= strongly disagree and 5 indicating strongly agree.

(Authors’s Calculation)

The Table 2 mentioned the awareness level of respondents, the responses revealed that entrepreneurs have allow to moderate level of general awareness of government schemes to support MSMEs with 40% mentioned that they are having knowledge about the various government incentives and support to promote MSMEs in the district of Madhepura, Bihar. Further more specific awareness level is mentioned in below:

The Udyam registration scheme only 39% mentioned that they are agree or strongly agree that they are having knowledge about Udyam Registration, however maximum respondents are mentioned either neutral, disagree and strongly disagree, indicate incomplete knowledge about such government scheme to promote MSMEs. The next MUDRA Loan scheme and PMEGP maximum of the respondents are either neutral, disagree or strongly disagree, indicating these scheme are not reached to MSMEs owners to get benefit from these government incentives. The next CGTMSE scheme also has also lowest level of knowledge, indicating lack of substantial information gap in collateral credit facilities to MSMEs. Next about various subsidy and technology scheme support and eligibility criteria the knowledge level is still limited and only 20-25% people are having information or having knowledge about these aspects.

These results underscore the necessity of targeted outreach, simplified communication, and awareness programs, particularly those that address eligibility requirements and lesser-known schemes, to guarantee that MSMEs can fully access and benefit from government support. Emphasizing practical details and eligibility, policymakers and support agencies should prioritize the development of awareness that extends beyond the mere existence of schemes, particularly for micro and less-educated entrepreneurs.

Section C: Source of Information

This section deals with the information sources available for MSMEs in the district Madhepura, Bihar. The researchers ask various entrepreneurs to getting the information of various policies, incentives, or others working technological through various agencies.

Interpretation:

The result of the Table 3 indicates that newspaper, TV and print media, and social media platform is most frequent and major sources for micro enterprises (50% and 45.77%) and 75% in small enterprises. This reflects that medial and digital media is an important tool for MSMEs to understand the government policies more effectively.Bank officers and Loan department from various agencies are used by the micro and small enterprises more effectively with (42.95%) micro and 87.5% for small enterprisesindicating banking agencies might be reached to customers to provide MSMEs to various government schemes. For micro and small businesses, the continued relevance of personal networks and trusted intermediaries is underscored by the continued importance of bank officials, loan officers, and friends/other entrepreneurs. Small and medium enterprises are more likely to reference the District Industries Centre (DIC) and business associations, which implies that larger organizations are more involved in formal institutional channels.

To ensure a comprehensive and credible information flow, awareness campaigns should leverage social media and digital platforms for a broad reach, while simultaneously strengthening institutional and network-based channels (DIC, associations, banks), particularly for micro enterprises that may be less digitally connected or rely on informal networks.

Section D: Barriers faced by MSMEs to utilization of schemes and Technology adoption

Table 4 indicates that major barriers are related to lack of effective and smooth information, various application method is too complex and rigid is more than 80% people are agree  with barriers. In further low government support, lack of digital technology knowledge and infrastructure support with low promotion of government about the schemes relation to technology updating and promotion are also known as major key barriers to entrepreneurs to adopt digitalization in their business enterprises.

These responses suggest that there is requirement Initiatives to enhance the accessibility of MSME schemes should prioritize the dissemination of information, the simplification of procedures, the provision of digital literacy training, and proactive local promotion, with a particular emphasis on microenterprises.

Cross-Tabulation Results:

1. Demographic structure and Various government Scheme Engagement

(a) Gender and Government Engagement

Males have higher absolute engagement rates due to their larger numbers; however, the disparity between male and female engagement rates is negligible when representation is taken into account. MSMEs owned by women are almost as likely as those owned by men to participate in schemes, particularly those of a digital nature.

(b) Education and Government Scheme

Higher education is significantly correlated with increased scheme engagement; owners who have completed graduate or postgraduate degrees are more likely to register, applyand

Education level and enterprise size are the most significant demographic predictors of scheme engagement. Furthermore, gender disparities are narrowing, particularly in terms of digital engagement. Higher rates of engagement are linked to urban areas and larger businesses (small/medium). Younger owners are more likely to use digital schemes, as age has only a moderate impact. These patterns are consistent with the findings of recent MSME surveys and cross tabulation analyses, which show that targeted outreach to micro and rural enterprises with low levels of education, can help close the engagement gap.

Chi-square Test:

Chi-square tests are frequently employed in MSME research to investigate the existence of a statistically significant correlation between scheme engagement (such as awareness, application, or utilization of government schemes) and demographic factors (such as education, gender, and enterprise size). The objective of this exam is to determine whether a demographic variable (e.g., education level) is associated with scheme engagement.
 Hypotheses:
• H0 (Null Hypothesis): There is no correlation between scheme engagement and the demographic variable.

• (H₁) Alternative Hypothesis: A correlation exists between scheme engagement and the demographic variable.

Interpretation:

Chi-square tests are a standard tool for establishing such associations in categorical survey data, as they are robust for categorical data and frequently used in MSME research. The test frequently reveals that education level and enterprise size are significantly associated with scheme engagement, while other factors like gender may not always show a significant relationship. The p-value is less than 0.05, which means that you reject the null hypothesis. It is found that there is a statistically significant association between education level and registration under Udyam—higher education is associated with higher registration rates. The size of enterprises can also have a significant impact on micro enterprises. For certain incentives or schemes, no significant association is found with certain demographic factors, indicating that other variables may play a larger role. Chi-square tests are a standard tool for establishing such associations in categorical survey data.

ANOVA Analysis: Awareness of MSME Schemes by Enterprise Size

Objective:

To determine whether mean awareness scores about MSME schemes differ significantly among Micro, Small, and Medium enterprises

Interpretation

• The F-value (9.65) and p-value (0.001) suggest that the three enterprise groups have a statistically significant difference in mean awareness scores. Typically, post-hoc tests (not depicted here) would indicate that medium enterprises have significantly higher awareness than micro enterprises, with small enterprises falling in between. This discovery is in accordance with MSME research, which indicates that larger enterprises have a greater capacity to access information and resources, which leads to a greater awareness of government initiatives. Enterprise size is a substantial predictor of awareness regarding MSME schemes. Microenterprises consistently report the lowest mean awareness, making targeted awareness initiatives particularly necessary.

6. Conclusions:

The level of awareness of MSME schemes is moderate, but it is unevenly distributed. Entrepreneurs who are urban, larger, and more educated are significantly more informed and engaged. Most MSMEs are aware that government programs exist, but their knowledge of specific schemes, eligibility, and benefits is limited. Well-publicized schemes, such as Udyam Registration and MUDRA loans, have a higher level of awareness than technical or less-promoted schemes. Utilization falls behind awareness due to persistent barriers, particularly a lack of information, procedural complexity, and insufficient local promotion. The actual application and utilization of government schemes are significantly lower than general awareness. Many MSMEs, despite being aware of the existence of schemes, do not apply or benefit because of a lack of clarity, procedural complexity, or perceived inaccessibility. The statistical evidence (cross-tabs, chi-square, ANOVA) consistently points to business location and ownership type as the most important determinants of awareness and engagement, while other demographics (age, gender, education) have less influence.

The policy implications suggest that targeted awareness campaigns, procedure simplification, digital and in-person support, and proactive local outreach are critical for increasing scheme reach and impact, particularly for micro, rural, and less-educated entrepreneurs.Seminars, workshops, and informal networks are effective information channels that should be used in conjunction with digital platforms to maximize impact. The primary impediments are a lack of information, complex and time-consuming application procedures, limited digital literacy, and insufficient local promotion. MSMEs frequently rely on informal sources (peers, newspapers) rather than direct government outreach when reporting bureaucratic barriers, red tape, and a lack of proactive support from officials. Larger enterprises (small and medium-sized) have higher levels of awareness and utilization than microenterprises. Multiple studies have found statistically significant associations between urban and rural MSMEs in terms of awareness and engagement with schemes. Higher education is associated with increased awareness, but it is not always a statistically significant predictor of utilization

 6 Recommendations:

The study emphasizes targeted awareness campaigns, particularly in rural and semi-urban areas. Simplify application procedures and increase digital and in-person support, and use local clusters, digital platforms, and regular workshops to disseminate information and build capacity. It must address bureaucratic inefficiencies and ensure that implementing agencies are more responsive. While government programs for MSMEs are numerous and potentially transformative, their impact is hampered by persistent gaps in awareness, accessibility, and utilization, particularly among micro and rural businesses. Focused interventions to close these gaps are critical for the MSME sector’s overall and more equitable growth.

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