(i) Problem of Raw materials.
(ii) Problem of Finance.
(iii) Problem in Marketing.
(iv) Problems of under-utilisation of capacity.
(v) Other Problems-in adequate availability of credit facility, deficient managerial and technical skills.

SHGs in Tamil Nadu:
In Tamil Nadu, Tamil Nadu Corporation for Development of Women Limited (TNCDW) was established in the year 1983 with the prime objective of socio-economic development and empowerment of rural women. The Government of TamilNadu spearheaded the Self Help Group concept in the country by forming SHGs in Dharmapuri district with the assistance of International Fund for Agricultural Development (IFAD) in September 1989. The success of the IFAD project paved way for the now popularly called "Mahalir Thittam" project, which was launched during 1997-98 with the State Government funding and was progressively extended to all the 30 districts. The SHG movement has now emerged as a powerful and vibrant movement illuminating the lives of many poor women in the state.

The Government ofIndia has launched MUDRA Bank with a capital amount of 20,000 crore, and credit guarantee corpus of 3,000 crore, to help Micro Small and Medium Enterprises (MSMEs) and startups to resolve problems relating to financing. MUDRA Bank refinances micro-Finance Institutions through a Pradhan Mantri Mudra Yojana (PMMY).

National Bank for Agricultural and Rural Development (NABARD) has defined Self Help Group as "a homogenous group of rural poor voluntarily formed to save whatever amount they can conveniently save out of their earnings and mutually agree to contribute to a common fund of the group to be lent to the members for meeting their productive and emergent credit needs".

Functions of Self Help Groups:
(i) Developing and enhancing the decision-making capacity of members.
(ii) Increasing general awareness on literacy among members.
(iii) Equipping the poor with basic skills for understanding monetary transactions.
(iv) Maintaining books and registers to ensure Proper Accounts.
(v) Submitting the Accounts for Annual Audit by a Qualified Auditor.
(vi) Providing necessary training in the chosen field.
(vii) Deciding the loan amount to be sanctioned to the group members.

1. The motto of every group members should be "saving first - credit latter"
2. Self Help Group is homogeneous in terms of economic status.
3. The ideal size of a Self Help Group ranges between 10 and 20 members.
4. The groups need not be registered.
5. Groups are non-political, voluntary associations and follow a democratic culture. Each group should have only one member from one single family.
6. A group is to be formed with only men or only with women.
7. Self Help Group holds weekly meetings mostly during non-working hours, and full attendance is made mandatory for better participation.
8. The groups have transparency among themselves and they have collective accountability in respect of financial transactions.
9. Every group provides a platform to its members for exchange of their views and ideas freely.

There are many Banks and Financial institutions which provide financial assistance to Micro Small and Medium Enterprises and start-ups
A. Commercial Banks
1. Public sector .banks (e.g) State Bank of India, Indian Bank, Indian Overseas Bank Canara Bank
2. Private sector banks (e.g) ICICI, Axis Bank, City Union Bank, HDFC, Karurvasya Bank, Tamilnadu Mercantile Bank
B. Regional Rural bank
1. Pandian Rural bank,
2. Pallavan Rural Bank,
3. Vallalar Rural Bank.
C. Co operative Banks
TNSC Bank, District Central Co operative Banks
D. Micro Finance Institutions
(e.g). MUDRA Bank
E. Non Banking Finance Institutions
1. National Small Industries Corporation Ltd (NSIC)
2. Small Industries Development Bank of India (SIDBI)

a) Employment Potential:
1. MSMEs generate more employment opportunities than large business concerns.
2. They are mostly labour intensive, thus providing more employment opportunities to a large number of people in our country.
b) Low production cost:
(1) MSME's do not require skilled laborers or professionals to run the organization or professionals to run the organization.
(2) These units are more cost efficient than large scale units, thus facilitates production of goods at low cost.
c) Low investment:
(1) MSMEs do not require a huge capital to start the unit. It can employ locally available resources within the reach of the owner.
(2) These industries facilitate the growth of local entrepreneurs and self-employed professionals in small towns and villages.
d)Quick Decision making:
(1) MSME's need not hire professional managers to run the management on a day-to-day basis.
(2) In most cases, owner himself manages the Enterprises.
(3) Hence, decision-making becomes easy and effective.
e) Supplementary Role:
(1) MSME's play a complementary role to serve as a feeder to large-scale industries.
(2) They supply accessories, spare parts and components to large-scale industries.
f) Establishment of Socialistic pattern of Society :
(1) MSME sector contributes towards the establishment of a socialistic pattern of society by reducing the concentration of Income and Wealth.
(2) It helps to achieve equitable distribution of wealth.
g) Balanced Regional Development:
(1) By encouraging MSMEs in industrially backward areas of India, balanced development can be achieved in all regions.
h) These industries facilitate the growth of local entrepreneurs. Promotion of self employment and self Reliance spirit:
1. MSMEs help to a great deal in developing a class of entrepreneurs.
2. It promotes self employment and a spirit of self reliance in the society
3. It contributes an increase in per capita income or economic development.
i) Higher - contribution to manufacturing and Export:
(1) MSMEs contributes 45% to the total manufacturing output and 40% to the exports from the country.
(2) It helps in earning precious foreign exchange in various countries across the world.

Definition :
MSME is a sector that empowers entrepreneur's which provide employment opportunities to the people of India. It is classified into two classes.
1. Manufacturing Enterprises:
They refer to the enterprises engaged in the manufacturing or production of goods pertaining to any industry specified in the first schedule to the Industries (Development and Regulation) Act, 1951. The manufacturing enterprises are defined in the terms of investment in plant and machinery.
2. Service Enterprises:
They refer to the enterprises engaged in providing or rendering of services. The limit of investment in plant and machinery/equipment for manufacturing/Service Enterprises is notified as under.

The Government of India has launched MUDRA Bank with a capital amount of Rs.20,000 crore, and credit guarantee corpus of Rs.3,000 crore, to help Micro Small and Medium Enterprises (MSMEs) and startups to resolve problems relating to financing.

(i) Manufacturing industries
(ii) Feeder industries
(iii) Servicing industries
(iv) Ancillary to large industries
(v) Mining (or) quarrying

Micro Units Development Refinance Agency Bank.

Micro enterprises are engaged in low scale activities such as clay pot making, fruits and vegetable vendors, transport (three wheeler tempos and autos), repair shops, cottage industries, small industries, handlooms, handicraft works etc.