New Delhi: Small Industries Development Bank of India (SIDBI) has joined hands with Franchise India to provide financial support to emerging and established franchisors in India.
The tie-up is expected to enable SIDBI create a sustainable and robust financing model for the franchise industry, N.K.Maini, Deputy Managing Director, SIDBI, told Business Line here.
The SIDBI-Franchise India programme has been instituted as a funding initiative to make the franchising model of business less daunting for aspiring entrepreneurs.
Currently, financing is very difficult as the franchisees are often not able to provide any collateral, it was pointed out.
“We are now looking to devise a product that is based not essentially on the collateral but on the cash flows,” Maini said, adding that efforts were only in the pilot stage and the product could be firmed up in the next six months.
Maini said that franchise industry in India is expected to grow by leaps and bounds.
From 1.4 per cent of GDP at present, the franchise industry is likely to account for 4 per cent of GDP by 2017, says a recent report by KPMG.
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