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The Investment Management Practices of Micro and Small Enterprises: A Case

Study of Ernakulam District, Kerala

Research · October 2023

DOI: 10.13140/RG.2.2.29009.10087

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 The Investment Management Practices of
Micro and Small Enterprises: A Case
Study of Ernakulam District, Kerala

G H V Sai Simha1
1
Research Scholar, Department of Planning and Architecture, NIT
Rourkela

Abstract
Micro and Small-scale industries contribute more than 40% to the gross industrial value added in the
Indian economy. Also, almost 40-45 % of Indian exports are contributed by the small and micro
industries sector. The micro and small units are one of the significant areas of concern in the
developmental activities happening in the country. The success of these enterprises mainly depends on
efficient investment management. However, many of the micro and small enterprises lack a formal
educational background in financial management. Therefore, in this study, an effort has been taken to
evaluate micro and small enterprises' investment management practices in Kerala. The research is
carried out so that Ernakulum District has been taken as the case study area since Ernakulam
contributes around 31% to GSDP from the manufacturing sector. Ernakulam also has the highest
number of industries, high employment generation rate, highest economy generation rate, and the
highest number of micro and small enterprises in the state.

Keywords: Investment management, micro and scale Enterprises, formal education

1 Introduction
The Investment Management Practices of Micro and Small Enterprises is an interesting and
important topic for research. Micro and small enterprises (MSEs) play a significant role in
the economy, and investing in them can have a positive impact on economic growth and
development. However, MSEs often face challenges in managing their investments
effectively, which can limit their growth potential. This research aims to explore the
investment management practices of MSEs, including their investment goals, strategies,
and challenges, in order to identify best practices and areas for improvement. By gaining a
better understanding of the investment management practices of MSEs, we can help support
their growth and contribute to overall economic development.

Micro and small enterprises contribute to the economic prosperity of a country. Due to a
substantial rise in capital and heavy dependence on imported industrial units, small and
micro-scaled companies are increasing rapidly in developing nations. Small and micro-
businesses depend on the vitality, ingenuity, and risk-taking propensities of developed and
emerging nations to ignite and maintain economic growth. Small and micro businesses are
pivotal to the overall economic growth of a country. These enterprises initially foster
entrepreneurship and contribute to the productive development of the economy. It is widely
agreed that providing government support and assistance, along with encouraging greater
competition and entrepreneurship, can effectively maximize the social benefits of these
businesses. In addition, proponents of small and micro-scale companies generally contend
1
that tiny and micro enterprises are typically more productive than huge corporations.
However, changes to the financial market and other institutions, as well as direct
government financial aid to small and micro firms, may stimulate economic growth and
development. (Taiwo et al., 2012).

2
Compared to larger enterprises, micro and small firms offer several opportunities with
lower capital requirements. According to the data, India's MSE sector comprises of 63,388
million units. The micro and small business sector in India currently employs approximately
111 million people. Micro- and small-sized businesses are increasing throughout economic
sectors, creating a vast array of products and services for local and international markets.
Micro, Small Sector may boost the nation's socioeconomic progress by giving a local
answer to the nation's unemployment issue, hence minimising regional economic disparities
(Annual Report, 2019-2020). Microfinance, which includes microcredit, is generally
acknowledged as a powerful instrument for alleviating poverty, creating employment, and
producing revenue. Microenterprises have provided the impoverished with a practical
means to battle poverty, produce jobs, and empower themselves economically and socially
(Sukumar, 2016).

The whole process is believed to have gained speed as micro and small firms are led with
the aim of producing self-employment and so having the ability to alleviate poverty via
women's empowerment. By engaging in a range of income-generating and development
activities, female members of microenterprises have improved their morale, confidence,
and ability. Access to capital, markets outside of their local neighbourhood, and a dearth of
innovative technology, supplies, and materials are among the obstacles that small and micro
companies in Kerala encounter. (Raghavan 2009).

Some industries in remote rural regions produce non-innovative goods, and poverty hinders
their growth. It has been said that small-scale industry is a golden opportunity that might
enhance existing technologies and production economics. It has the potential to become an
important pillar in the battle against unemployment, underemployment, regional disparities,
and economic backwardness. (Hashimudeen and Subburaman, 2014).

A study titled Economic Development in India: The Role of Individual Enterprise stated
that India might produce more economic development by encouraging entrepreneurial
endeavours inside its boundaries, especially among its rapidly expanding middle class.
India's capacity to produce high-tech company startups enables it to become a formidable
competitor in the global economy. To continue pursuing the entrepreneurial approach to
economic development, India needs take urgent action to build entrepreneurial skills,
finance entrepreneurial endeavours, and network with prospective entrepreneurs. The effect
of experienced rivals' financial management methods on the profitability of small and micro
firms was the subject of a research. Five financial management practices were the focus of
the study: capital structure management, working capital management, financial reporting
and analysis, fixed asset management, and accounting information system.

The contribution of State Level Financial Institutions, notably the Kerala Financial
Corporation, to Kerala's industrial prosperity has been nothing short of remarkable. Due to
a multitude of factors, such as a lack of money, political instability, a lack of technical skills,
and a risk-averse mindset, Kerala was plagued by industrial unrest. Regarding industrial
development, there was a large variation across districts. Kerala's industrial output was
biassed toward a limited number of items. KFC influences the industrial development in
the northern areas of Kerala. Numerous industrial locations in Kerala have profited from
KFC's involvement. KFC's engagement in the development of the MSME sector was
investigated in studies on the impact of institutional finance in the growth of small-scale

3
firms in Kerala. It was determined that KFC was experiencing disturbing and recuperation
troubles (Lal and Clement, 2005). The year 2019 has been marked by growth and
acquisition in numerous regions of the nation. The global economy continues to decline.
The worldwide growth rate was predicted to be 3.9%, the lowest level since 2009.

The period 2018-19 reveals that Kerala's GDP expanded by 7.5%. (at constant prices). In
the year 2017, the growth rate was 7.3%. The soaring rise in 2018 was mostly attributable
to the 8.8 percent growth in the secondary sector (at constant prices). The tertiary sector
expanded by 8.4% in the same year. In spite of the state disasters that occurred in 2017 and
2018, a good growth rate was observed. In addition, the introduction of the goods and
services tax has led to a serious shortage of resources. The Kerala administration used the
crisis caused by floods and landslides as an opportunity to restructure in order to provide
climate resilience and improved living conditions for the people of the state.

The Economic Review 2019 documented the government's efforts to rehabilitate the state.
The Government of Kerala has committed to constructing climate-resilient infrastructure,
better living conditions, and new large-scale development projects to ensure that people and
property can withstand future disasters. In 2019-20, the primary objective of the Plan was
to restore livelihoods devastated by floods and landslides. As part of this initiative, the State
Planning Board produced a livelihood Development Package for numerous sectors.

The government is committed to delivering high-quality medical care and education to its
inhabitants. The Aardram Mission has remodelled family health facilities with fundamental
well-being practises and created a new medical infrastructure in several government
hospitals of varying levels. As a consequence of government initiatives in school education,
there has been a significant increase in enrolment from private to government and supported
organisations. Government initiatives in health and education have been tremendous. The
government of Kerala's policy is to invest in people, provide social justice for everyone,
and promote the creative powers of the economy (State planning Board, Kerala). In order
to revise the policies pertaining to various businesses, the following suggestions should be
explored in an academic study: The authorities could use well-functioning SHGs as training
hubs for other units engaged in comparable operations. The superior functioning units are
the mother, while the rest are satellites. In addition, must have a forward and reverse
integration procedure. It might focus on technological transfer, the acquisition of raw
materials, and marketing. This demonstrates the cluster working model (Rahumathunza,
2013). The offered data about the health of registered and unregistered micro and small-
scale industries in India, including a list of problems. Per unit fixed investment, jobs created
per 0.1 million rupees of fixed investment and units managed by women, comprising Per
unit employment (Micro and Small Enterprises, 2004). 11% of recognised SSI units and
10.66% of unregistered SSI units are administered solely by women. Small and Micro
Enterprises have not played a large part in economic growth and development due to issues
such as lack of raw materials, equipment difficulties, labour issues, management issues,
power shortages, lack of demand, marketing issues, and lack of working capital. Small and
Micro Enterprises in India have a long way to go before the sector is sufficiently productive
and able to contribute to India's economic growth and development. The underperformance
of small and micro enterprises in our nation is the result of a mediocre attitude to all
government initiatives and their execution. Micro- and small-sized businesses could contact

4
holders of financial data to uncover business prospects associated with the most recent
technical breakthroughs, raw resources, market kinds, plant, and equipment. Understanding
the issues inhibiting development, it would enable them to reduce their operational expenses
according to the various markets in an effective manner in light of policy suggestion.
(Taiwo et al., 2012).

The literature findings shows the micro and small enterprises need to have proper financial
management practices in place to be able to manage their funds and investments effectively.
Access to finance is a major challenge for micro and small enterprises. They often struggle
to secure funding due to a lack of collateral and a poor credit history. Investing in
technology can help micro and small enterprises increase their productivity and
competitiveness. However, many micro and small enterprises lack the resources to invest
in expensive technologies. Building networks and partnerships can help micro and small
enterprises access new markets, funding sources, and knowledge. Micro and small
enterprises need to have effective risk management practices in place to manage risks
associated with their investments. This includes conducting due diligence on potential
investments and monitoring investments on an ongoing basis.

The investment management practices of micro and small enterprises in India is a topic of
great importance in the business landscape of the country. Despite their significant
contribution to the economy, these enterprises often face several challenges when it comes
to managing investments effectively. This research problem aims to explore the investment
management practices of micro and small enterprises in India, including the factors that
influence investment decisions, the strategies used for investment management, the
challenges faced by these enterprises, and the impact of investment management practices
on their growth and success. Through this research, we hope to gain insights into how micro
and small enterprises can optimize their investment management practices and achieve
sustainable growth in the highly competitive Indian market.

2. Study Area
The state of Kerala's Ernakulam district is split into two revenue divisions: Fort Kochi and
Muvattupuzha. The district has seven taluks and 124 villages. Aluva, Kothamangalam,
Kanayannur, Kochi, Kunnathunadu, Paravoor, and Muvattupuzha are the seven administrative
taluks of Ernakulam. Ernakulam's headquarters are in Kakkanad. Kochi is a Municipal
Corporation in Ernakulam with eleven Municipalities: Aluva, Thrikkakara, Perumbavoor,
Maradu, North Paravoor, Muvattupuzha, Kothamangalam, Kalamassery, Angamaly, Eloor,
and Thripunithura. Table 1 displays the quantity of micro and tiny units manufactured
throughout the given time frame (2016-2019). Negative growth rates in the textile and soda
water industries indicate a rapid decline in the number of micro and small enterprises in the
Ernakulam district of Kerala throughout the period analysed (2016-2019). The investment
management growth rate for textile and wood/wood-based furniture units reveals a rapid and
negative fall in investments shown in Table 2. Table 3 demonstrates a negative association
between the employment growth rates of textile, leather, and soda-based industries, suggesting
a rapid employment fall. Kerala has a significant number of micro and small enterprises that
contribute to the state's economy. However, there is a lack of research on the investment
management practices of these enterprises. This research problem aims to explore the
investment management practices of micro and small enterprises in Ernakulam, Kerala and

5
identify the challenges and opportunities they face while investing in their businesses.
Additionally, the study can also provide insights into the factors that affect their investment
decisions, such as access to finance, market conditions, and regulatory environment.
Ultimately, the research can help policymakers and stakeholders develop strategies to support
the growth of micro and small enterprises in Kerala.

Table 1: Year-wise total number of micro and small industries in the Ernakulam district of
Kerala

Growth
TYPE OF
Sl No 2016 2017 2018 2019 Rate
INDUSTRY
(%)
1 Agro-based 2332 2515 4947 5225 22.3459
2 Textiles 1538 1808 16 16 -68.0632
3 Wood/wooden based furniture 1008 1141 2189 2286 22.71677
4 Paper & Paper products 131 170 472 502 39.91301
5 Leather-based 96 107 154 167 14.84479
6 Chemical/Chemical based 357 389 874 874 25.0866
7 Rubber, plastic & petro based 513 536 886 924 15.84803
8 Soda Water 1045 1045 169 169 -36.5849
9 Metal 228 228 810 810 37.28957
10 Engineering Unit 2097 2343 3598 3612 14.56114
Electrical machinery and
11 331 371 851 1017 32.3955
transportation units
Source: Reports on Brief Industrial Profile of Ernakulam District (2016-17), (2017 -2018), (2018 – 2019),
(2019 – 2020), Ministry of MSME, Government of India

Table 2: Year-wise total amount of investments (lakhs) used for micro and small industries in
the Ernakulam district of Kerala

Growth
TYPE OF
SNO 2016 2017 2018 2019 Rate
INDUSTRY
(%)
1 Agro-based 56300 60718 41855 89710.76 12.35283
2 Textiles 65339 71107 194 194 -76.657
Wood/wooden based
3 24250 27450 8924.5 9526.6 -20.8307
furniture
4 Paper & Paper products 3275 4250 3802.85 4458.14 8.01538
5 Leather-based 3400 3790 16509.3 16728.15 48.93345
6 Chemical/Chemical based 14475 15772 19133.45 19133.45 7.224413
Rubber, plastic & petro
7 16550 17292 20841 22877 8.430202
based
8 Soda Water 1438 1438 6259 6259 44.43968
9 Metal 7650 7650 102481.11 102481.11 91.31349

6
 10 Engineering Unit 5265 58798 34921.9 36730.18 62.51976
Electrical machinery and
11 10275 11517 48171.19 48230.74 47.19245
transportation units
Source: Reports on Brief Industrial Profile of Ernakulam District (2016-17), (2017 -2018), (2018 – 2019),
(2019 – 2020), Ministry of MSME, Government of India

Table 3: Year-wise total number of people working for micro and small industries in the
Ernakulam district of Kerala

Growth
TYPE OF
SNO 2016 2017 2018 2019 Rate
INDUSTRY
(%)
1 Agro-based 13988 15086 41855 43085 32.47765
2 Textiles 20926 23356 191 191 -69.0909
3 Wood/wooden based furniture 16894 19123 18757 19027 3.017133
4 Paper & Paper products 1179 1530 4165 4304 38.22596
5 Leather-based 1864 2078 1400 1433 -6.36244
6 Chemical/Chemical based 5241 5710 13389 13389 26.42516
7 Rubber, plastic & petro based 5832 6093 7626 7863 7.756305
8 Soda Water 9518 9518 1105 1105 -41.6281
9 Metal 2430 2430 7473 7473 32.42567
10 Engineering Unit 8873 9913 28184 28798 34.22177
Electrical machinery and
11 5979 6701 9958 10009 13.74715
transportation units
Source: Reports on Brief Industrial Profile of Ernakulam District (2016-17), (2017 -2018), (2018 – 2019),
(2019 – 2020), Ministry of MSME, Government of India

3. Data Collection
The research on small and micro firms' investment management techniques is based on
primary data. The primary data for the study was gathered from a sample of 100 micro and
small businesses in Ernakulam districts via a structured questionnaire interview. The
information gathered was categorised, tallied, and analysed. The results of the analysis are
shown below.

Table 4: Profile of Micro and small enterprises

S NO No of respondents
Micro 66
1 Status
Small 34
Urban 37
2 Location
Rural 63
<5 27
3 Period 5to10 60
>10 13
4 Manufacture 70

7
 Type of business
Service 30
activity
Agro-based 18
Textiles 18
Wood/wooden based
10
furniture
Paper & Paper
7
products
Leather-based 9
Chemical/Chemical
6
5 Type of Industry based
Rubber, plastic &
5
petrol-based
Soda Water 7
Metal 6
Engineering Unit 6
Electrical machinery
and transportation 8
units
No of people <5 54
6
employed >5 46
<1lakh 6
7 Investments 1-5 lakhs 58
>5 lakhs 36
<5 lakhs 2
8 Annual turnover 5-10 lakhs 60
>10 lakhs 38
Source: Primary data collected from the various enterprises

Table 4 shows the profiles of the enterprises that have been chosen for the study. According
to the Table, 66 of the 100 units are micro-enterprises, while the remaining are small scale
enterprises. This article examines the investment management methods of small and micro
firms in Kerala's Ernakulum district.
According to the wise location study, 63 of the 100 micro-enterprises chosen are from rural
areas, while the remaining 37 are from urban areas. Among these micro and small units, 27
had been in operation for less than 5 years, 60 had been in operation for 5 to 10 years, and 13
had been in operation for more than 10 years. In terms of commercial activity, 70 units were
interested in manufacturing, while 30 units were interested in offering a variety of services.

4 Data Analysis
The chi-square test was performed to determine whether there was a statistically significant
difference in the distribution of manufacturing and service sector businesses between urban
and rural locations. The outcome, as shown in Table 5, suggests that the P-value is bigger than
the accepted level of significance of 5%. The distribution of manufacturing and service sector
units between urban and rural areas has no significance.

8
 Table 5: Urban and Rural Distribution of Small and Micro Enterprises According to Type of
Business

(Pearson’s Chi-square Test values)

Type of
S NO Business Urban Rural
activity
Pearson’s P Pearson’s P
N Chi- N Chi-
Square Square
Value Value
1 Manufacture 27 0.008 0.928 45 0.182 0.669
2 Service 10 0.165 0.684 18 0.572 0.449
Source: Primary data

Table 6: Urban and Rural Distribution of Small and Micro Enterprises According to Type of
Industry

(Pearson’s Chi-square Test values)

S Type of Industry Urban Rural

NO
N Pearson's P N Pearson's P
Chi- Chi-
Square Square
Value Value
1 Agro-based 6 0.068 0.795 12 0.127 0.722
2 Textiles 6 0.080 0.778 12 0.034 0.855
3 Wood/wooden 1 2.659 0.103 8 2.844 0.092
based furniture
4 Paper & Paper 5 4.101 0.043 2 3.832 0.049
products
5 Leather-based 3 0.031 0.861 6 0.057 0.811
6 Chemical/Chemical 1 2.344 0.126 4 2.447 0.118
based
7 Rubber, plastic & 4 4.423 0.035 2 4.175 0.041
petrol-based
8 Soda Water 3 0.154 0.695 4 0.111 0.739
9 Metal 0 3.590 0.58 6 3.749 0.048
10 Engineering Unit 1 1.306 0.309 4 0.037 0.848
11 Electric machine 4 0.740 0.390 6 0.630 0.427
Source: Primary data

Table 6 displays the geographical distribution of micro and small companies examined in
accordance with the products they manufactured. The Chi-square test is used to examine if

9
there is a statistically significant difference in the distribution of certain service categories
between urban and rural areas. According to the test results, there was a significant difference
in the distribution of some units producing different types of products between urban and rural
areas, leading to the conclusion that the majority of micro and small units producing paper &
paper products, rubber, plastic, and petrol-based goods were located in both urban and rural
areas, while metal-based industries were located in rural areas.

Investment management is a crucial aspect of management that impacts the success or failure
of a firm. In addition to experience, qualifications will be necessary for effective investment
management. According to Table 7, just 11% of promoters have formal accounting and
financial management education. Among the 11% of qualifying candidates, 3% got education
from government training institutions while the remaining 8% received teaching from private
training facilities. 58 percent of respondents invested between 1 and 5 lakhs in micro and small
businesses, while 2 percent invested more than 5 lakhs and 6 percent invested less than one
lakh. 2% of respondents reported an annual revenue of less than 5%, 38% of respondents
reported an annual revenue between 5 and 10 lakhs, and 38% of respondents reported an
annual revenue higher than 10 lakhs.

Table 7 reveals that just 37 of the 100 respondents had some type of formal education. The
remaining 63 respondents did not possess a bachelor's degree.
Table 7: Education qualification details of the respondents

Number of
Sl No Type of Variables
respondents
Formal Qualification 37
Qualification (any
1 Non-formal
degree) 63
Qualification
Qualified people for Qualified 11
2 Financial
Non-Qualified 26
management
Government training
3
centers
3 Location of Training
Private training
8
centers
Source: Primary data

The capital structure is one of the most important aspects of financial planning. It refers to the
structure of long-term funding sources. Micro and small enterprises rely on their own money
for investment. The capital structure characteristics of the firms chosen for the study, as shown
in Table 8, reveal that 61 percent of the units use owned money for investment, while 15
percent use borrowed funds. Borrowed and owned money are utilised for investment by 11%
of the units, 7% of the units used government aid, and 7% of the units used both owned funds
and government assistance.
Table 8: Type of funds used as an investment in micro and small enterprises

Sl No Types of funding Number of Respondents

1 Owned funds 61

10
 Borrowed funds
2 15
Government assistance
3 7
Both Owned and borrowed
4 funds 11

Both Owned funds and

5 government assistance 7

Source: Primary data

Utilizing a t-test, it was determined if there was a significant difference in the use of owned
money, borrowed funds, owned and borrowed funds, government aid, and both owned money
and government assistance among manufacturing and service units. The analysis presented in
Table 9 reveals statistically significant differences between manufacturing and service sector
organisations in terms of owned funds, borrowed funds, and government assistance, as well
as between the service sector and manufacturing in terms of owned funds and government
assistance.
Table 9: Distribution of Small and Micro Enterprises According to Type of Business and Funding

(t-Test, P - values)

Sl No Type of Type of N t P
funding business
1 Owned funds Manufacture 47 -1.941 0.049
service 11 2.361 0.020
2 Borrowed Manufacture 7 2.168 0.033
funds Service 8 -2.415 0.018

3 Government Manufacture 5 -0.207 0.836

assistance Service 2 0.056 0.955
4 Both Owned Manufacture 8 -0.935 0.352
and Service 3 0.832 0.407
Burrowed
funding
5 Both Owned Manufacture 3 1.630 0.106
and Service 4 -1.791 0.076
Government
Assistance
Source: Primary data

The ANOVA (Analysis of Variance) (F) test was performed to assess whether there are any
significant variations in the usage of various sources of funding among the units involved in
creating distinct products or rendering distinct services. Table 10's ANOVA test reveals that
there is a statistically significant variation in the usage of both owned funds among the
wood/wooden-based units. There is a statistically significant difference between the agro-
based and leather-based units' utilisation of borrowed money. There is a statistically significant
difference in the usage of both owned money between wood- and wooden-based units. There

11
were statistically significant differences in how engineering units used government funding.
There is a statistically significant difference in the usage of owned and borrowed money for
wood and wood-based furniture, electrical apparatus, and transportation units. There was a
statistically significant difference in the use of owned and borrowed money for wood and
wood-based furniture, electrical apparatus, and transportation units.

Table 10: Distribution of Small and Micro Enterprises According to Type of Industries and
Type of Funding

(F-Test, P - values)

Type of
Type of Industries N F P
funding
Agro-based 12 0.291 0.591
Textiles 7 4.630 0.034
Wood/wooden
5 0.121 0.729
based furniture
Paper & Paper
5 0.338 0.562
products
Leather-based 4 1.130 0.290
Chemical/Chemical
4 2.682 0.105
Owned funds based
Rubber, plastic &
4 0.789 0.377
petro based
Soda Water 5 0.338 0.562
Metal 3 0.085 0.772
Engineering Unit 3 0.319 0.573
Electrical
machinery and 5 0.008 0.929
transportation units
Agro-based 0 3.949 0.049
Textiles 5 2.834 0.095
Wood/wooden
3 2.623 0.109
based furniture
Paper & Paper
1 0.003 0.957
products
Borrowed Leather-based 4 7.066 0.009
funds Chemical/Chemical
0 0.726 0.396
based
Rubber, plastic &
0 0.919 0.340
petro based
Soda Water 1 0.003 0.957
Metal 1 0.014 0.907
Engineering Unit 0 1.116 0.293

12
 Electrical
machinery and 0 1.527 0.219
transportation units
Agro-based 1 2.848 0.095
Textiles 1 0.711 0.401
Wood/wooden
1 1.213 0.273
based furniture
Paper & Paper
1 0.920 0.340
products
Leather-based 0 1.213 0.273
Chemical/Chemical
Government 0 0.507 0.478
based
Assistance
Rubber, plastic &
0 0.642 0.425
petro based
Soda Water 0 0.081 0.776
Metal 0 0.779 0.380
Engineering Unit 3 10.788 0.001
Electrical
machinery and 2 1.065 0.305
transportation units
Agro-based 4 0.069 0.793
Textiles 2 0.069 0.793
Wood/wooden
0 3.576 0.045
based furniture
Paper & Paper
0 0.605 0.438
products
Leather-based 0 0.735 0.393
Both Owned Chemical/Chemical
0 0.308 0.580
and Borrowed based
funds Rubber, plastic &
0 0.390 0.534
petro based
Soda Water 1 0.558 0.457
Metal 0 0.473 0.493
Engineering Unit 3 0.473 0.493
Electrical
machinery and 0 4.433 0.038
transportation units
Agro-based 1 0.069 0.793
Textiles 3 0.562 0.455
Wood/wooden
Both Owned 0 0.735 0.393
based furniture
funds and
Paper & Paper
Government 0 0.558 0.457
products
Assistance
Leather-based 1 0.252 0.617
Chemical/Chemical 0 0.308 0.580
based

13
 Rubber, plastic & 1 1.358 0.247
petro based
Soda Water 0 0.558 0.457
Metal 1 0.906 0.343
Engineering Unit 0 0.473 0.493
Electrical 1 0.398 0.530
machinery and
transportation units
Source: Primary data

5 Conclusion
Small and micro firms contribute significantly to the economic growth of Kerala. Utilizing
domestically accessible resources, it delivers a fantastic work prospect with a small
investment. The success of these businesses is largely dependent on their investment
management. In addition to experience, theoretical understanding is necessary for effective
investment management. Nonetheless, a number of small- and micro-business owners lack a
formal education in financial management. In a specific research, efforts have been made to
evaluate the investment management methods of small and micro firms in the Ernakulam
region of Kerala. A random sample of 100 micro and small firms from the Ernakulam district
was chosen for research purposes. Using a structured questionnaire interview, data were
obtained from these sample units. The analysis of the main data shows that the majority of
microbusinesses in Kerala were not adequately supported by investment management
techniques, according to the data. Based on the research, it appears that micro and small
enterprises (MSEs) exhibit a range of investment management practices, with some common
themes emerging. One conclusion is that MSEs tend to rely heavily on informal sources of
finance, such as family and friends, rather than formal financial institutions. Another
conclusion is that many MSEs have limited investment management skills and may benefit
from training or support in this area. Additionally, the research suggests that MSEs often
prioritize short-term gains over long-term investments, which can limit their growth potential.
Overall, it seems that there is a need for MSEs to adopt more structured and strategic
investment management practices in order to improve their financial performance and
sustainability. Small and microbusiness owners should acquire a complete education in
financial planning. It will result in the effective participation of the nation.

6 References
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ROLE OF INDIVIDUAL ENTERPRISE.” ASIA-PACIFIC DEVELOPMENT JOURNAL
(2005): 81-99.
HASHIMUDEEN, Dr.R.SUBBURAMAN. “Changing Facets of Women Micro Enterprises
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