New York: Google.org, the philanthropic arm of Google Inc., has teamed up with the Soros Economic Development Fund and Omidyar Network to fund a $17 million company that will invest in small- and medium-size business in India.The Small to Medium Enterprise Investment Co. would fill the gap between loans offered by microfinance institutions and those of large commercial banks and private equity funds.
I've never really understood development practitioners' obsession with small businesses. Small businesses have woeful loan repayment rates (see the graph below from the Mckinsey Institute report Accelerating India's Growth through Financial System Reform), contribute well more than their fair share of pollution, and, in my personal opinion, tend to be far more discriminatory in their hiring practices than larger companies. Sure, they employ more people, on a per rupee profit basis, than larger companies, but my guess is that that is just due to the fact that their small size allows them to fly under the radar of bureaucrats charged with enforcing labour laws.
3 comments:
New York: Google.org, the philanthropic arm of Google Inc., has teamed up with the Soros Economic Development Fund and Omidyar Network to fund a $17 million company that will invest in small- and medium-size business in India.
With reference to the above paragraph, it's really good news for all the small and medium scale business entrepreneurs, as it’s definitely going to help many in business growth and also add on to the Indian economy.
So, all the more reason for people like Google.org to fund these SMEs, tie clean mechanism practises to funding and above all, give some incentive to move up the value chain.
Discriminatory employment practices? Almost invariably these people take only their relatives or at the most people of the same castes with recommendation from their close relatives as employees. This does change when they operate in more urban areas; still they take in candidates with strong reference from their friends irrespective of castes. Operating at very high interest rates, with very little market reach, this is one way of risk management for them.
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