Volume : 1, Issue : 1, June - 2012

Facilitation of Collateral Free Loan to Improve Financial Linkages For Start Up & Growth � A Case Study

D M Parikh

Abstract :

Access to finance is one of the basic requirement for start up or growth for any enterprise. Financial inclusion and right kind of provision of finance leads to economic development of any country. Project is one kind of intervention to wealth creation for an enterprise and driver of growth for the country. Ideally project finance decision is to be taken on cash flow generation from the project and not the availability of collateral from the entrepreneurs which is the practice prevalent today. The new approach calls for change in paradigm in lending. Facilitation process by empanelled Business Development Service Provider can effectively ing this change in paradigm in lending. This process will also address other key gaps and will develop as well as strengthen financial linkages if systematically implemented. This case study elaborate the facilitation process undertaken to effect paradigm shift in introducing collateral free loan to improve financial linkages in Chennai Leather & leather Products Cluster & its outcome. The study also proposes the role of BDS clinic for sustaining the approach.