Entrepreneurial Finance Essay Example | Topics and Well Written Essays - 3500 words

Entrepreneurial Finance - Essay Example The SMEs are mostly started by youngsters with vision and drive, and in many cases, the businesses started at a modest level could grow as a big business empire. The failure stories may be mainly due to lack of financial support at the initial stages or lack of experience in running the business. The community of SME promoters needs to be encouraged and supported by the government for the balanced economic development in the country. Apart from the financial assistance, they need to be provided with necessary training in the aspects such as financial matters and marketing for running the business efficiently. The recommendations made in the paper seeks to address these lacunae through a government sponsored and structured institutional backing for SMEs to support them financially. With regard to training, the associations for SMEs need to be formed, if it not already existing in a particular case, and strengthened to render training facilities to the promoters or employees of the SME s in various areas which include financial management, marketing, quality control methods and R&D relating to various businesses Introduction The niche areas in various businesses offer immense scope in the context of SMEs for specialization, growth and development with limited competition because the projects with limited or localized demand and limited investment outlay are not suitable for the growth of big corporate companies. This is one of the reasons why corporate companies concentrate on retail, telecom, food processing, housing and infrastructure where the volume could be scaled up and the growth prospects for the big companies are compatible with the level of investment. Therefore, in the absence of acute competition and the need for only limited investment outlay and labor requirement, superior level of personalized service and specialist experience in the chosen field have been the prime drivers of the growth of the SMEs over the period of time. Hussain, Milman & Matlay (2006 p. 586) states â€Å"In recent years, policy makers in the UK have attempted to address the apparent market failure to supply adequate and specific finance for SMEs†. The efforts should be based on continuous review and radical restructuring of the domestic economy in the backdrop of liberalization and globalization. Background The small and medium enterprises play a significant role in the economic development of a country. World Business Council for Sustainable Development states that the SMEs can play a much bigger role in developing national economies, alleviating poverty, participating in the global economy and partnering with larger corporations. For an economic growth to be sustainable in the long run, the growth must be balanced encompassing all the sections of the society. There are certain misgivings about the growth and development of SMEs promoted and run by ethnic minority people. Financing in respect of SMEs depends on various factors, but aligning the fin ancial needs of the ethnic minority SMEs with the mainstream national growth and development is very important for a peaceful prosperity. Objectives The objective is to identify the causes for the disparity in financing to small and medium projects promoted by the ethnic minority people, analyze the causes leading to this problem and recommend solutions to overcome these problems.