Impacts of Financial Access of Urban Informal Enterprises: Evidence from Assam of Northeast India

Despite the presence of the informal sector in developing countries around the globe as a source of livelihood for a disproportionately large number of households, a myriad of problems often held back the enterprises in the sector. Among these problems, meagre access to financial services is the most disabling, as access to other enabling conditions often hinges on access to finance. This paper examines, drawing inputs from a sample survey, the issues related to the financial accessibility of the urban informal enterprises in Assam. Furthermore, the paper looks at the economic contributions of these enterprises in terms of gross value added, using a customized financial access index and logistic and linear regressions. Analysis shows that enterprises with registration have better access to financial services. The economic contribution of the sample enterprises is not significantly related to the extent of their access to financial services.