AN EMPIRICAL STUDY ON MOTIVATIONAL FACTORS FOR SETTING UP OF MICRO AND SMALL ENTERPRISES IN CHITTOOR DISTRICT OF ANDHRA PRADESH

Abstract

The primary objective of this paper is to explain the factors which have motivated the owners of
Micro and Small Enterprises set up in Chittoor district of Andhra Pradesh and attempts to present the
important differences between 7 categories of motivational factors reported and classified. The present
study hinges upon both primary and secondary data collected. Primary data related to motivational
factors was collected from 195 sample owners of the enterprises comprising 101 micro and 94 small
enterprises operating both in urban and rural areas of Chittoor district, by adopting multi-stage stratified
random sampling method. A detailed questionnaire was designed and canvassed to the sample owners to
record and collect the information on motivational factors. The responses were collected using the 5-
Point Likert Scale to measure the significance and relative importance of these 7 categories of
motivational factors, including the sub-categories. Since there is the paucity of analytical studies on
motivational factors at district level, particularly with reference to Micro and Small enterprises, the
present paper tries to address this research gap.
The paper begins with a brief analysis of the role of MSMEs at global level, contribution to
Indian economy as well as the economy of bifurcated State of Andhra Pradesh, with special reference to
the study area- Chittoor district. By relying on secondary data, an attempt is made to establish the
capital-efficiency in different categories of Micro and Small Enterprises in Chittoor District and infers
that engineering-based enterprises are the most efficient and productive enterprises which are providing
employment to 14 persons on an average with an estimated amount of capital investment of Rs. 9.56
lakhs per enterprise. It is observed that micro and small enterprises in the district are providing
employment to 10 workers on an average with an average investment of Rs. 24.66 lakhs per enterprise
and proved that development of micro and small enterprises can be made one of the strategies for poverty
alleviation in the district.
The paper establishes that Social factors (3.985), Communication factors (3.970) and
Infrastructural factors (3.318) are the major and important factors that have motivated the sample
enterprises in Chittoor district and concludes that though a favorable financial infrastructure is
available in the district, free access to credit was somewhat acted as a detrimental factor to mobilize the
required amount of both fixed and working capital for the sample enterprises.