A NOVEL PROCESS OF OPTIMIZING USAGE OF FORMAL FINANCIAL SERVICES OF MICRO AND SMALL INDUSTRIES

Abstract

The present invention relates to a novel process to optimize the usage of formal financial services of micro and small industries, which typically operate with limited investment. The process comprises identification of four key parameters essential for enhancing formal financial usage: affordability of financial services, awareness of financial services, accessibility to financial services, fostering a positive attitude towards the usage of financial services; and assessment of each parameter which carries equal weightage. The process further calculates the collective score from the above parameters. The collective scores from these parameters reflect the performance of micro and small industries regarding their use of financial services and highlight areas for improvement. This assessment is crucial for enhancing the quality of production and distribution processes. The scores related to "financial usage" will indicate the degree of financial inclusion within these industries. The measurement model aims to optimize the usage of formal financial services of micro and small industries, which typically operate with limited investment. As a result, the individuals involved often lack usage of formal financial services, with instances of wages being paid in cash. This model provides a path to increase the utilization of formal financial services within these industries.

Specification

Description:Field of the Invention
The present invention relates to the technical field of financial assessment methodologies, more particular to a novel process to optimize the usage of formal financial services of micro and small industries, which typically operate with limited investment.
Background of the Invention
For a sustainable growth of a country, it is imperative to bring every industry into a formal financial system. The micro and small industries are not very much connected to formal financial system (Collard et. Al, 2001; Ibor et al, 2017). The process will help industries adopt and utilize formal financial services and come in the purview of formal financial system.
Drawings
Fig.1 illustrates the Process for quantifying financial usage in micro and small Industries. The process comprises identification of four key parameters essential for enhancing formal financial usage: affordability of financial services, awareness of financial services, accessibility to financial services, fostering a positive attitude towards the usage of financial services; and assessment of each parameter which carries equal weightage.
Detailed Description of the Invention
The following description includes the preferred best mode of one embodiment of the present invention. It will be clear from this description of the invention that the invention is not limited to these illustrated embodiments but that the invention also includes a variety of modifications and embodiments thereto. Therefore, the present description should be seen as illustrative and not limiting. While the invention is susceptible to various modifications and alternative constructions, it should be understood, that there is no intention to limit the invention to the specific form disclosed, but, on the contrary, the invention is to cover all modifications, alternative constructions, and equivalents falling within the spirit and scope of the invention as defined in the claims.
In any embodiment described herein, the open-ended terms "comprising," "comprises," and the like (which are synonymous with "including," "having" and "characterized by") may be replaced by the respective partially closed phrases "consisting essentially of," consists essentially of," and the like or the respective closed phrases "consisting of," "consists of, the like. As used herein, the singular forms "a", "an", and "the" designate both the singular and the plural, unless expressly stated to designate the singular only.
The micro enterprises includes an investment limit of ?1 crore and a turnover limit of ?5 crores, while the threshold for small enterprise has been set at an investment limit of ?10 crores and a turnover limit of ?50 crores.( https://msme.gov.in/faqs/q1-what-definition-msme)
The present invention developed a process to measure financial usage of micro and small INDUSTIRES and tested through SMART-PLS.
The process will quantify the financial usage practices of industries. Such quantification is not discussed much in literature.
The process comprises identification of four key parameters essential for enhancing formal financial usage: affordability of financial services, awareness of financial services, accessibility to financial services, fostering a positive attitude towards the usage of financial services; and assessment of each parameter which carries equal weightage. The process further calculates the collective score from the above parameters. The collective scores from these parameters reflect the performance of micro and small industries regarding their use of financial services and highlight areas for improvement.
Advantages of the present model:
1. The measurement model will quantify financial usage practices of the micro and small industries.
2. Government can use this measurement for providing licenses.
3. The areas of improvement will be more visible with elaborate parameters on financial usage for the industries.
, Claims:1. A novel process to optimize the usage of formal financial services of micro and small industries, comprises of:
• identification of four key parameters essential for enhancing formal financial usage: affordability of financial services,
• awareness of financial services, accessibility to financial services,
• fostering a positive attitude towards the usage of financial services; and
• assessment of each parameter which carries equal weightage.
Wherein
• process further calculates the collective score from the above parameters.
2. The novel process to optimize the usage of formal financial services of micro and small industries as claimed in the claim 1, wherein collective scores from these parameters reflect the performance of micro and small industries regarding their use of financial services and highlight areas for improvement.
3. The novel process to optimize the usage of formal financial services of micro and small industries as claimed in the claim 1, wherein scores related to "financial usage" will indicate the degree of financial inclusion within these industries.

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