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Favourable Financial Regime

Timely access to finance is key to running a successful enterprise. In order to popularise cleaner technologies, a favourable financial regime, which will enable entrepreneurs to easily avail financial support in terms of loans, incentives and subsidies, must be set up. Dedicated funds for cleaner production technologies will facilitate the transformation in the brick sector.

One of the major barriers to accelerated adoption of sustainable brick production practices is the availability of easy finance for capital investments. Although technology and practice based solutions are available for the brick sector, the entrepreneurs are hesitant to adopt them as they are very capital intensive.

The major stakeholders for accelerated financial delivery are financial institutions, banks and entrepreneurs. Small business units in the brick sector are perceived to be ‘risky’ by banks, lenders and other financial institutions, because they are known to be rural and temporary in nature.


Bricks used in construction



In India, it takes up to two years to secure loans in the brick sector, not to mention the effort and transaction costs involved. Lack of awareness, among the bank staff, means that the financial institutions treat a traditional brick kiln and an eco-friendly as one and the same. Banks need lender creditability and proper documentation whereas entrepreneurs favour fast tracking of finance so that they can start business at an early date. At present, entrepreneurs do not feel encouraged to avail existing schemes due to cumbersome procedures, complex formalities, excessive delays in sanctioning of bank loans and obtaining clearances. Moreover, there is a lack of knowledge amongst entrepreneurs on the various formalities to own and acquire finance for SME’s.

There is an immediate need to change this perception amongst financial institutions and banks. Government financial institutions need to create the path to change. A few steps that can be taken to encourage this transformation include:

•   Introducing performance incentives to promote cleaner production technologies

•   Earmarking dedicated funds for cleaner production technologies

•   Single window system for availing funds for cleaner production technologies

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