In between the extremes of private equity and microfinance, the common man is still deprived of money to start a simple business
At the annual ritual of Kolkata Book Fair that has become an impeccable part of the Bengali culture, one would often come across dozens of art students, from the city’s fine arts colleges, selling paintings for pittance of Rs.30-Rs.40. Looking at those creative indulgences, many of which might have got tagged as masterpieces if they were to find a place among scores of art galleries which are raking millions now, one would easily conclude that if there were ever a need to find an ideal example of the quintessential slip between the cup and the lip, India is the ideal sojourn for that. India has often been the land of contrast. A land where many a paradoxes co-exists, be it feminism and female foeticide or over-supply of funds, coupled with lack of funds for new entrepreneurs.
In last few years, no other words probably have got as much mileage the way ‘microfinance’ & ‘private equity’ have entered the mental lexicon of upwardly mobile Indians. So while the legendary Md. Yunus has become a household name, the daily bombardment of news of how private equity investors are making strategic investments in Indian companies and how their crucial involvement is helping India Inc., to have a better foothold in global biz, has also become a routine affair. Assocham forecasts that private equity (PE) funding in India is expected to be $48 billion by 2010. Such forecasts are justified as in 2007 itself, the private equity investments in India have been nearly $17 billion, in a year when the total value of cross-border deals involving Indian companies was worth more than $70 billion. Similarly, microfinance also got much impetus, thanks to the incredible feats of Md. Yunus. In a country where about half of its population still don’t have access to banking, advent of microfinance is a boon. So on one hand, there’s advent of global private equity funds like Carlyle, Blackstone, Warburg Pincus, ChrysCapital & Temasek into India, and domestically too there have been sprouting of such equities like IDFC Private Equity, Infinity Venture Capital Fund, UTI Venture Funds & ICICI Venture, on the other hand, many conventional banks like Bank of Baroda, SBI, ICICI, Yes Bank & even ABN AMRO have been foraying into microfinance. Reports state that by 2010, amount of microfinance in India would be about $3 billion.
At the annual ritual of Kolkata Book Fair that has become an impeccable part of the Bengali culture, one would often come across dozens of art students, from the city’s fine arts colleges, selling paintings for pittance of Rs.30-Rs.40. Looking at those creative indulgences, many of which might have got tagged as masterpieces if they were to find a place among scores of art galleries which are raking millions now, one would easily conclude that if there were ever a need to find an ideal example of the quintessential slip between the cup and the lip, India is the ideal sojourn for that. India has often been the land of contrast. A land where many a paradoxes co-exists, be it feminism and female foeticide or over-supply of funds, coupled with lack of funds for new entrepreneurs.
In last few years, no other words probably have got as much mileage the way ‘microfinance’ & ‘private equity’ have entered the mental lexicon of upwardly mobile Indians. So while the legendary Md. Yunus has become a household name, the daily bombardment of news of how private equity investors are making strategic investments in Indian companies and how their crucial involvement is helping India Inc., to have a better foothold in global biz, has also become a routine affair. Assocham forecasts that private equity (PE) funding in India is expected to be $48 billion by 2010. Such forecasts are justified as in 2007 itself, the private equity investments in India have been nearly $17 billion, in a year when the total value of cross-border deals involving Indian companies was worth more than $70 billion. Similarly, microfinance also got much impetus, thanks to the incredible feats of Md. Yunus. In a country where about half of its population still don’t have access to banking, advent of microfinance is a boon. So on one hand, there’s advent of global private equity funds like Carlyle, Blackstone, Warburg Pincus, ChrysCapital & Temasek into India, and domestically too there have been sprouting of such equities like IDFC Private Equity, Infinity Venture Capital Fund, UTI Venture Funds & ICICI Venture, on the other hand, many conventional banks like Bank of Baroda, SBI, ICICI, Yes Bank & even ABN AMRO have been foraying into microfinance. Reports state that by 2010, amount of microfinance in India would be about $3 billion.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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