Researchers worldwide have noted that SMEs confront serious financial management challenges that jeopardise their viability. How to finance their ventures is an issue that Indian SMEs are facing. Their personal funds and short-term debt play a major role in the current funding scenario. To comprehend the financial behaviour of Indian SMEs (especially those in the consumer goods industry), this study focuses on firm-specific determinants influencing the capital structure. Stagnant growth and the annual increase in sick units are the main reasons for selecting a given industry; more crucially, the financial behaviour of a particular SME business has not been examined more frequently. Panel data regression is used to assess the effect of firm-specific determinants on the capital structure of the setup for the period 2006-2017. The sample consists of 244 active non-financial functioning enterprises. Based on their operational demands, entrepreneurs select the inappropriate financing ratio, according to the findings.
Prasad et al. (Thu,) studied this question.