Enhancing the performance of Indian micro, small and medium enterprises by implementing supply chain finance: challenges emerging from COVID-19 pandemic

Abstract

Purpose: The already scarce financial resources coupled with the current COVID-19 pandemic have created the worst scenario for Indian micro, small and medium enterprises (MSMEs). The application of supply chain finance (SCF) solutions to MSMEs can enhance the performance and growth of the sector. But, the implementation of SCF solutions faces various obstacles which restrict the MSMEs' ability to meet their financial requirements. The purpose of this paper is to explore and prioritize the various important barriers hindering SCF application in Indian MSMEs. Design/methodology/approach: Literature on SCF and MSMEs are critically reviewed and barriers affecting the SCF application in Indian MSMEs are scrutinized with the consultation of the experts. The present study applies intuitionistic fuzzy-analytic hierarchy process (IF-AHP) methodology to prioritize the identified barriers and thereafter, the sensitivity analysis is also done to observe the identified barriers under different situations. Findings: The results of the study have revealed that poor cash flow management and working capital management disruption are acting as the most prioritized barriers of SCF. The external factor of cultural challenges has been prioritized as the minimum-influence factor that has least negative influence on the operations of SCF in MSMEs. Practical implications: The present study bears an important practical and managerial implication to solve real world problems of financial constraints of MSMEs. The managers should emphasize upon the importance smooth flow of cash and working capital management across the supply chains by which better SCF solution can be implemented in MSMEs. Originality/value: The study conducted is an effort to address the barriers of SCF in Indian MSMEs during the COVID-19 pandemic. The implementation of IF-AHP and sensitivity analysis would help managers and policymakers to comprehend and resolve the prioritized barriers and sub-barriers of SCF in the MSMEs.