Recourse to various financing sources depends upon the growth stage of the enterprise, the quantum of funds required, the maturity of the financial market and the policy environment. The Fourth Census of MSME sector revealed that only 5.18% of the units (both registered and unregistered) had availed of finance through institutional sources. While 2.05% had finance from non-institutional sources, the majority of units i.e.
92.77%, had no finance or depended on self finance. This suggests that despite best efforts, the credit flow to MSMEs from the institutional sources is not commensurate with the economic activity undertaken by the MSMEs. Banks, on their part, lend a reasonable share of their credit to MSEs.