DMPQ-Explain the following term: a) Merchant Banks b) Venture capital fund c) Viability gap fund d) Value capture financing

Merchant Banks:      A bank dealing in commercial loans and investment. They manage and underwrite new issues, provide consultancy and corporate advisory services for corporate clients on raising finds and other financial aspects.

b) Venture Capital Fund: Usually the financial institutions are hesitant to finance new products because the profitability of new products is uncertain and involve risks. So, to finance such products, separate type of financial companies who venture to finance them are established. They are called Venture capital companies. They provide capital to companies that produce new products based on innovations and to new industries.

c) Viability gap fund: A form of finance to grant support to the projects that are economically justified but not are financially viable. The funding majorly comes from Public expenditure.

d) Value capture financing: Value capture as practiced widely is based on the principle that private land and buildings benefit from public investment in infrastructure and policy decisions of government. Appropriate VCF tools can be deployed to capture a part of the increment in value of land and buildings.

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