Absence of equity capital may pose a serious challenge to development of knowledge-based industries, particularly those that are sought to be promoted by the first-generation entrepreneurs with the requisite expertise and knowledge. Most MSMEs, particularly the knowledge based enterprises, when starting off, have negative cash flows and no collateral and therefore, find it difficult to access debt capital or bank financing.
In the first seven months of 2021, net foreign direct investments increased by 43.1 percent. This is due to positive foreign investor sentiment on the country’s macroeconomic fundamentals and strong growth prospects. The country’s outstanding external debt also remains at a prudent level as its ratio to GDP slightly eased to 26.5 percent in end-June 2021.