Q.A small-scale unit's difficulty in raising adequate finance is most commonly attributed to:
(A) Its inability to offer the collateral/security formal lenders require, and its lack of access to capital markets available to large companies
(B) A legal prohibition on small units from ever borrowing money
(C) Small units never needing any external finance at all
(D) Government rules that specifically forbid banks from lending to small units

Small units struggle for finance mainly because they lack acceptable collateral and cannot raise capital through shares/debentures the way a large company can.

Small units face genuine, structural obstacles to raising finance: they typically lack the collateral/security formal lenders want, and — unlike a large public company — cannot raise capital by issuing shares or debentures on the capital market, often leaving them dependent on costlier informal-sector borrowing.

Option-by-option analysis:

• (A) Correct — this is exactly the standard explanation for SSI's finance problem.
• (B) Incorrect — there is no such legal prohibition; small units CAN and do borrow. …

Avoid answers that claim small units are legally barred from finance — the correct reasoning is about PRACTICAL acce …