Microfinance, Cold-Storage Infrastructure, and Market Linkages as Determinants of Profitability in Perishable Agricultural Enterprises: Evidence from Karnataka, India

Abstract

Small-scale perishable agriculture businesses in Karnataka, India, still lose a considerable amount of production because of post-harvest spoiling problems, lack of capacity to store products in cold storage, and market fragmentation. The aim of this study is to examine the correlation among the profitability performance of 450 agriculture entrepreneurs who produce products that are easily perishable to the following: access to microfinance, availability of cold storage infrastructure, quality of market linkages, entrepreneurial training, access to government subsidy, and risk-management. Out of five districts, namely Hassan, Mandya, Chickballapur, Kolar, and Ramanagara, the entrepreneurs were selected. The researcher used Pearson’s correlation, ordinary least squares multiple linear regression, one-way analysis of variance, and two-way analysis of variance and analyzed cross-sectional data obtained from primary surveys carried out from January to March 2026. The positive relation between all the six main variables and the profitability performance index is statistically justified at the significance level of p < 0.05. The whole model accounts for 73.1% of the variation in profitability performance (R² = 0.731, adjusted R² = 0.726, F(9, 440) = 133.19, p < 0.001). The interaction between the two factors is not significant, indicating that the variables have additive rather than synergistic effects on the data; the most powerful standardized predictor is quality of market-linkage (β = 0.469), followed by access to microfinance (β = 0.346) and infrastructure of cold-storage (β = 0.331). This study is subject to self-reporting and is cross-sectional; therefore, conclusions about relations and not causes or effects are made. Future research should apply quasi-experimental methods, such as difference-in-differences that leverage staggered introduction of microfinance and cold-chain services, adopt objective accounting variables, validate constructs at the item-level, and utilize panel designs to replicate such linkages and associations under stronger causal identification and in more Indian states.