Divakaran, ShanthiMcGinnis, Patrick J.Shariff, Masood2014-04-102014-04-102014-04https://hdl.handle.net/10986/17714This paper discusses the constraints for private equity financing of small and medium enterprises in developing economies. In addition to capital, private equity investors bring knowledge and expertise to the companies in which they invest. Through active participation on the board of directors or in partnership with management, private equity investors equip companies with critical improvements in governance, financial accounting, access to markets, technology, and other drivers of business success. Although private equity investors could help to create, deepen, and expand growth of small and medium enterprises in developing economies, the vast majority of private equity in such markets targets larger or more established enterprises. Technical assistance, when partnered with private equity, can unlock more investor commitments and considerably enhance the ability of small and medium enterprises in emerging markets to raise private equity capital. Technical assistance provides funding that allows private equity funds to extend their reach to smaller companies. Technical assistance can mitigate some level of risk and increase the probability of successful investments by funding targeted operational improvements of investee companies. Dedicated technical assistance facilities financed by third parties, such as development finance institutions, governments, or other parties, have emerged to fill this critical need. The paper discusses the provision of investment capital twinned with technical assistance, which is now more accepted by limited partners and general partners or fund managers and is becoming more of a market model for private equity finance focused on small and medium enterprises.en-USCC BY 3.0 IGOACCESS TO CAPITALACCESS TO INFORMATIONACCESS TO MARKETSACCOUNTINGACCOUNTS RECEIVABLEADVANCED ECONOMIESADVISORY SERVICEAFFORDABILITYALTERNATIVE ASSETALTERNATIVE INVESTMENTSAMOUNT OF CAPITALANGEL INVESTORANGEL INVESTORSASSET CLASSASSET CLASSESBANK FINANCINGBENEFICIARYBUDGETINGBUSINESS ADVISORSBUSINESS ADVISORYBUSINESS OPPORTUNITYBUSINESS OWNERSBUSINESS PLANBUSINESS STRATEGYBUSINESS SUCCESSBUSINESS TRAININGCAPACITY BUILDINGCAPACITY CONSTRAINTCAPACITY CONSTRAINTSCAPITAL FLOWSCAPITAL FUNDCAPITAL INVESTMENTSCAPITAL MARKETSCAPITAL STRUCTURECAPITAL · · · · FUNDCASH FLOWCASH FLOWSCENTRAL BANKCONFLICTS OF INTERESTSCORPORATE DEBTCREDIT GAPCREDITSCUSTOMER BASEDEBT FINANCINGDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT BANKDEVELOPMENT CORPORATIONDEVELOPMENT FINANCEDEVELOPMENT FINANCE INSTITUTIONDEVELOPMENT FINANCE INSTITUTIONSDISBURSEMENTDUE DILIGENCEECONOMIC DEVELOPMENTECONOMIES OF SCALEEMERGING MARKETEMERGING MARKETSENDOWMENTSENTERPRISE ASSISTANCEENTREPRENEURSEQUIPMENTEQUITY CAPITALEQUITY FINANCINGEQUITY FUNDSEQUITY INVESTMENTEQUITY INVESTMENTSEQUITY INVESTORSESCROWESCROW ACCOUNTEXIT MECHANISMSEXPENDITURESEXTERNAL CAPITALFINANCESFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL INSTRUMENTSFINANCIAL INTERMEDIARIESFINANCIAL INVESTORSFINANCIAL LITERACYFINANCIAL MANAGEMENTFINANCIAL MARKETFINANCIAL RESOURCESFINANCIAL SERVICESFINANCIAL STATEMENTSFINANCIAL SUPPORTFINANCIAL SYSTEMSFLOW OF INVESTMENTFUND MANAGEMENTFUND MANAGERFUND MANAGERSFUNDING SOURCESGRACE PERIODGREEN REVOLUTIONGROSS DOMESTIC PRODUCTGROUP OF FIRMSHOLDINGHUMAN CAPITALHUMAN DEVELOPMENTINFORMATION TECHNOLOGYINITIAL PUBLIC OFFERINGINSTITUTIONAL INVESTORSINSURANCEINSURANCE COMPANIESINTERNAL RATE OF RETURNINTERNAL RATES OF RETURNINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL CAPITAL MARKETSINTERNATIONAL DEVELOPMENTINTERNATIONAL FINANCEINTERNATIONAL INVESTMENTINTERNATIONAL INVESTORSINVENTORYINVESTINGINVESTMENT ACTIVITIESINVESTMENT BANKINVESTMENT BANKSINVESTMENT CAPITALINVESTMENT CORPORATIONINVESTMENT FUNDINVESTMENT FUNDSINVESTMENT OPPORTUNITIESINVESTMENT PERIODINVESTMENT PORTFOLIOINVESTMENT PROCESSINVESTMENT PROPOSALSINVESTMENT RISKSINVESTMENT STRATEGYINVESTOR INTERESTINVESTOR RELATIONSIPOJOB CREATIONLEGAL ENVIRONMENTLEGAL SYSTEMSLENDERLEVEL OF RISKLOANLOCAL INVESTORSLONG-TERM DEBTLONG-TERM FINANCELONG-TERM INVESTORLONG-TERM RESOURCESMARKET DEVELOPMENTMARKET ENVIRONMENTMARKET PLAYERSMARKET REGULATORSMARKET RETURNSMATURITYMICRO-ENTERPRISEMICRO-INSURANCEMICROCREDITMICROFINANCEMICROFINANCE INSTITUTIONSMINORITY SHAREHOLDERMINORITY SHAREHOLDER RIGHTSMONETARY FUNDNEW COMPANIESNEW MARKETNEW MARKETSOPERATING COSTSOWNERSHIP STRUCTUREPENSIONPENSION FUNDSPERSONAL SAVINGSPOLITICAL RISKPOOL OF FUNDSPOOLS OF CAPITALPORTFOLIOPORTFOLIO MANAGEMENTPORTFOLIOSPOTENTIAL INVESTMENTPRIVATE BANKSPRIVATE CAPITALPRIVATE EQUITYPRIVATE EQUITY FINANCEPRIVATE FUNDPRIVATE INVESTMENTPRIVATE INVESTORSPRIVATE SECTOR FINANCEPRODUCTIVE INVESTMENTPROFESSIONAL INVESTORSPROFESSIONAL QUALIFICATIONSREAL ESTATERETURNSRISK CAPITALRISK MANAGEMENTRISK PROFILESSECURITIESSEPARATE ASSETSEPARATE ASSET CLASSSHAREHOLDERSSMALL ENTERPRISESOCIAL DEVELOPMENTSSTART-UPSTART-UP CAPITALSTART-UP COSTSSUBORDINATED DEBTSUPPLY CHAINSTECHNICAL ASSISTANCETECHNICAL SUPPORTTRADE CREDITTRANSACTIONTRANSACTION COSTSTRANSPARENCYTRUST FUNDTYPE OF INVESTORUNIONVALUATIONVENTURE CAPITALVENTURE CAPITAL FUNDWORKING CAPITALPrivate Equity and Venture Capital in SMEs in Developing Countries : The Role for Technical Assistance10.1596/1813-9450-6827