DETERMINANTS OF WORKING CAPITAL CHALLENGES AND ADAPTIVE STRATEGIES OF MSMES: A MICRO-LEVEL STUDY IN NORTH BENGAL

Abstract

Abstract: Despite their economic significance, MSMEs often struggle with inefficient working capital management due to both internal inefficiencies and external financial constraints. This study explores the key determinants of working capital challenges among MSMEs in Siliguri and Jalpaiguri, focusing on factors such as delayed receivables, inventory mismanagement, financial literacy, and limited access to institutional finance. Using a primary data-driven methodology, the study collects data from MSME owners through structured questionnaires and in-depth interviews. The analysis employs descriptive techniques, regression analysis, and qualitative coding to identify patterns and underlying causes. Additionally, the study evaluates coping mechanisms adopted by firms, including informal financing, supplier credit, and digital financing platforms like TReDS. The findings are expected to highlight that while MSMEs adopt various short-term coping strategies, structural issues such as low financial literacy and limited formal credit access persist. The study will offer practical recommendations for improving financial awareness, strengthening institutional support, and promoting digital financial solutions to enhance working capital efficiency. Keywords: MSMEs, Working Capital Management, Financial Literacy, Inventory Management, Delayed Receivables, Access to Finance, Adaptive Strategies, Digital Financing, TReDS, North Bengal, Siliguri, Jalpaiguri