Finance for Industrial Development.

Abstract

case in some other fields of economic activity such as, for example, mining or agriculture. To a large extent this arises from the fact that in the industrial sphere it is generally possible to assess the potential results of contemplated projects with greater accuracy than in most other sectors of the economy. The intelligent entrepreneur would, for instance, undertake a survey of the potential or existing level of demand for the article which he plans to produce, he would determine the cost of raw materials and the sources of supply, the cost of power, the availability of labour of the right caliber, the cost of premises, marketing costs, and so on. In the majority of instances these factors can be accurately gauged. From this data the industrialist is able to determine the price at which he would have to sell his product in order to yield an acceptable margin of profit and to demonstrate whether or not he will be able to compete successfully with other manufacturers or comparable imported goods. Armed with this information he is in a position to make serious approaches to the various available sources of finance and to persuade them of the feasibility of his project, provided always that he can also satisfy them that he will have the necessary expertise and equipment to deliver a good quality article. In the agricultural, mining and even in the commercial fields the unknown and, therefore, the risk factors, which are almost invariably of material importance, are more numerous and all too often there are some unanswered questions which tend to make investors hesitate.