Financing of ICT/I...

Financing of ICT/ICTE SME: The Supply Side

Financing Technology Entrepreneurs and SMEs in Developing Countries: Challenges and Opportunities
Excerpted from infoDev's study of Financing Technology Entrepreneurs and SMEs in Developing Countries: Challenges and Opportunities.

There are a variety of available approaches to supplying financing. This excerpt provides an explanation of many of these schemes, including:

  1. Equity financing - While India boasts a strong venture capital market, many less developed countries lack the funds to finance early-stage firms.
  2. Quasi-equity financing - In situations where the SME's potential for capital appreciation is negligible, a suite of hybrid financing options exist that can be tailored to fit individual businesses.
  3. Debt financing - Although many observers believe traditional loans are inappropriate for ICT/ICTE firms, the absence of equity financing in many countries make debt financing the only formal option for many.
  4. IFI/donor schemes - In recent years, international financial institutions (IFI), most notably the International Finance Corporation, have made efforts to facilitate access to finance for ICT/ICTE businesses.  

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