By Ragavi R
Small and Medium-sized Enterprises (SMEs) provide about 60 per cent of the overall employment globally and contribute about 50 per cent to the Gross Value Added. An effective funding environment is necessary for the growth of these companies. Today, SMEs are moving from the traditional ways of funding and are more concentrated in equity and other alternative ways of investments. Equity investments such as direct listing offers and Dutch auction plan have gained attention over the years. Further, alternatives such as crowdfunding and peer to peer lending are also gaining importance. However, the choice of the type of funding becomes very important since it determines the development of the company.
Ragavi R was Research Intern at Centre for Public Policy Research. Views expressed by the author is personal and need not reflect or represent the views of Centre for Public Policy Research.