A Study on the Effectiveness of Government Credit Initiative in Promoting Business Development in Bihar

Abstract

This study looks into how well government loan programs in Bihar, India, support the development and expansion of entrepreneurship. Four goals guide the research: assessing entrepreneurs' awareness and accessibility of government credit programs; analysing their influence on business growth; comparing the performance of beneficiaries and non-beneficiaries; and analysing beneficiary satisfaction and utilization challenges.  264 entrepreneurs participated in a quantitative survey, and data were analysed using partial least squares structural equation modelling (PLS-SEM), chi-square tests, t-tests, and descriptive statistics. The results show that although there is a moderate level of awareness regarding government loan programs, recipients report more growth and financial stability than non-recipients. But issues including lack of follow-up support, limited outreach, procedural delays, continue to be major problems. The report emphasizes that although loan programs are essential for fostering entrepreneurial success, their full potential is constrained by gaps in outreach and implementation. The results add to body of knowledge on financial inclusion and the growth of SME’s and offer policy suggestions for improving the availability, sufficiency, and the application of government lending programs.