Difficulty of Funding for India’s Entrepreneurs

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Today India appears to be poised for phenomenal growth and this could be well

observed at the start of the new millennium. India is becoming a priority destination for different foreign investors and venture capitalists. Today’s knowledge-based economy of India is considered as a fertile ground for the upcoming entrepreneurs. As a result, the Indian businesses are now adapting the

global competitive environment. But previously, this was not the case; most of the early entrepreneurs had to face hindrances in the path of their success due to

various reasons such as inadequate opportunities, scarcity of capital, lack of technology and many other factors.

India is a conservative nation and most of the people prefer regular monthly pay

rather than embarking on any business venture on their own. In India, people do

have innovative ideas but translating these ideas into business enterprises involves many risks which they find difficult to tackle. This has led to an overall

cautious mindset amongst the upcoming entrepreneurs. Even if an individual makes up his mind to start up an enterprise, he fails to get proper motivation, financial backup as well as proper sources for funding. The most common difficulties faced by Indian entrepreneurs are non-availability of good credit schemes and complexities in acquiring long or short-term loans. Also the Indian banks show lack of interest in entrepreneurial projects and put hindrances in processing the funding request applications. These constraints make an entrepreneur feel handicapped in initiating any kind of business venture.

The reasons behind the difficulties of funding comprise of the communication gap

between venture capitalists or finance agencies and entrepreneurs. Absence of good credit schemes as well as improper presentation skills also contribute to the

difficulties of funding faced by Indian entrepreneurs. Many banks also fail to offer

enduring loans for start up units. Most of the time, investors and finance companies do not thoroughly understand the entrepreneurs’ newly introduced concepts. It would help if the funding agencies and venture capitalists kept themselves abreast with newly developing technologies and their possible profitable uses.

However, the difficulties of funding can be solved by different entrepreneurship practices. The important aspect for entrepreneurship is the attitude to make the entrepreneur-investor partnership based on mutual trust. In this, one partner possesses the innovative idea and skills necessary for implementing an enterprise, whereas the other partner has capital required for execution. This kind of partnership can contribute to paramount success of an enterprise. The finance companies, funding agencies as well as banks should develop certain processes to asses the feasibility of any new business venture and based on this they should facilitate loans for good proposals. These investors, funding agencies and banks should also try and introduce credit schemes that are favorable for entrepreneurs and add to the economic development of the country.

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