Venture /Risk capital is, therefore, often a more appropriate financing instrument for high-growth-potential and start-up SMEs. However, access to this type of financing is often not available to them. In the absence of alternate sources of finance, the SMEs’ reliance on debt finance is very high.
These concerns have been particularly pronounced in regard to China, where commentators have questioned whether China’s rise has come at the expense of growth in its neighbors or provided an extra impetus to growth.