Equity- and Debt-Based Financing

The importance of entrepreneurial activity to local and national economies has been established. In order for entrepreneurs to utilize their talents and flourish, they need access to appropriate levels of financial capital. New ventures need significant amounts of capital to purchase necessary equipment and supplies. However, entrepreneurs in developing countries have limited access to these precious resources.

The modes of financing have significant implications for entrepreneurs. The availability of financing for new ventures varies across countries. Underdeveloped capital markets pose significant challenges to new ventures in developing countries. Financial intermediaries play more prominent roles for new ventures in the developed countries than in developing countries. Generally, debt financing is not an option for people who live in rural areas and whose livelihoods depend on agricultural output ...