Enhancing Access to Finance for Technology Entrepreneurs : Analysis of Highly Innovative, High Growth Start-Ups in Vietnam, Cambodia, and Nepal
The first part of the study provides contextual background to the financing gaps and associated barriers, which restrict access to finance for HI start-ups. These barriers are driven by both supply and demand sides of the financing equation. Supply...
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| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/ http://hdl.handle.net/10986/20811 |
| Summary: | The first part of the study provides
contextual background to the financing gaps and associated
barriers, which restrict access to finance for HI start-ups.
These barriers are driven by both supply and demand sides of
the financing equation. Supply side barriers include: high
transaction costs associated with financing; high levels of
credit risk associated with HI start-ups; high collateral
required by financial institutions; non-conducive legal and
regulatory environments for investment in HI start-ups; lack
of start-up expertise and dedicated resources by financiers;
and finance products that are not tailored to HI start-ups
needs and circumstances. Demand side barriers include:
reliance by HI start-ups on informal financing sources; lack
of awareness on the process to apply for funding from formal
financing sources; low levels of financial literacy by HI
start-ups; and the fear of losing control by involving
external investors. This section also contains a broad
overview of the country frameworks governing the start-up
sector, together with some of the initiatives relating to
access to finance. The second part of the study covers the
fieldwork undertaken in Vietnam, Cambodia, and Nepal. The
fieldwork gathered views from investee firms (irrespective
of whether they were successful in raising finance or not),
investors, and other stakeholders. The fieldwork was aimed
at understanding the severity of the financing gap for HI
start-ups, the stage(s) of financing impacted by lack of
access to finance, and the sources of financing for HI
start-ups. Lastly, financing catalyst recommendations
address non-financing impediments, which if overcome will
have a positive impact on access to finance. |
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