Introduction Micro-, small-and medium-sized enterprises (MSMEs) are at the forefront of economic policies adopted by developing countries and hence play a crucial role in their social and industrial development. MSMEs are considered to be engines of growth and each country has adopted some policy instrument to assist these enterprises (Peres and Stumpo 2000: 1655). MSMEs are playing an increasingly important role, too, in the process of export-led industrialization in the developing world. Despite the inherent disadvantages of MSMEs arising from rm size and a lack of industrial experience, they have the potential to become a signi cant driver of manufactured export growth in the developing world (Moreno 1997: 732; Noland 1997: 101; Damaskopoulos and Evgeniou 2003: 144; Lal 2004: 516). MSMEs are credited with generating the highest rates of employment growth, and also account for a major share of industrial production and exports. In the context of India, it is estimated that, in terms of value, the sector accounts for about 45 percent of the manufacturing output and 40 percent of the total exports of the country (Government of India 2011). The sector is estimated to employ about 59 million people in more than 26 million units throughout the country.