Financial Companies in India

Posted by Marketfinanc Financ on August 23rd, 2017

For an entrepreneurial enthusiast, business is what makes his world go round! Even more so if that entrepreneur happens to live in a developing nation such as India. Micro, Small and Medium Enterprises (MSMEs) are mushrooming in the subcontinent and becoming part and parcel of the ever expanding business ecosystem in the country. The majority of India’s work force is employed by small business owners and most of these small businesses need some sort of startup funding in order to get their business up and running. These small businesses create many job opportunities for an overpopulated country struggling to make a living so it is imperative that these business are given either a startup loan, access to equity funding by institutions (be it government or private organizations) and/or by angel investors. This investment ethos needs to become an integral part of the startup ecosystem so as to enable the management of small businesses or micro businesses to create employment and contribute significantly to the growth of the Indian economy. Investing in the future of the Indian economy is highly co-related to investing in the future of small business owners.

Angel investors in India are a leading source of funding early stage ventures and small businesses in India. Mainly comprised of prominent members of society with significant industry and sector knowledge, angel investors have acted in the capacity of ‘funder’ but also, and equally important, in the capacity of ‘mentor’ for many upcoming entrepreneurs in India. Angel funding, for the uninitiated, is the process of funding small, medium or micro businesses by wealthy individuals in return for a potentially significant return on investment. These investors have gotten together to form networks in order to enable diversification on investments and also, to be able to provide enterprises with a wealth of knowledge in addition to the capital that they crucially provide. In rural areas, this type of funding tends to be even more restrictive in nature just because of the lack of access to investors. As a result, there is a considerable drive that is pushing the limits of technology in order to create an atmosphere of finical inclusion. In the past, there have been a few success stories of entrepreneurs in rural areas being successful in attaining capital; however, there is still a lot of work that needs to be done to truly ensure financial inclusion across geographic divides. 

The main problem continues to be that small businesses owners find it difficult to obtain cheap access to startup loans, small business loans or for that matter, equity funding despite multiple attempts by the government to fill this void. Capital is the blood infusion that every business needs in order to sustain a healthy existence. In the west, small businesses have an ecosystem that they can tap into in order to avail a small business loan either from the government or from the private sector. However, in India, the reality of this situation is quite bleak. If these companies apply for a loan directly to a bank in the private and public sector, they are met by a large amount of inefficiencies, significant red tape and strict credit guidelines that make it virtually impossible to secure the funding they require in a timely fashion. To solve this problem, there seems to be a spurt of finance companies in India who are looking to facilitate business loans and equity funding for small, medium or micro businesses in India. On such financial technology company is Market Finance and has had considerable success in funding business across the length and breadth of the Indian subcontinent. The primary reason for their success has come purely due to their ability to use technology in tandem with their access to financial institutions such as Banks, NBFCs, retail investors and angel investors giving MSMEs access to capital in a cheap and efficient manner.  Part of their value proposition is to be able to provide MSMEs with a one stop access to all their financial needs. This includes business loans, equity funding and insurance as well. Market Finance is also pioneering a bill discounting product that will allow not only the banks and NBFCs to discount bills and invoices, but also retail investors thus significantly bringing down interest rates.

So in conclusion, to start a small business funding is key. MSMEs in India must explore a variety of financial products in order to ascertain what might be best suited for their needs.

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