10 .Development Finance Flashcards
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What is financing development projects?
It is the process of securing capital to fund projects that drive economic, social, or infrastructure development. (Lesson 10, p.1)
What are examples of development projects?
Infrastructure developments (roads, bridges, energy plants), social projects (healthcare, education, housing). (Lesson 10, p.1)
What are the key elements of financing development projects?
- Sources of funding, 2. Capital planning, 3. Risk management, 4. Financial structuring. (Lesson 10, p.1)
Who are angel investors?
Individuals who provide financial backing to startups in exchange for equity or convertible debt. (Lesson 10, p.2)
What are the characteristics of angel investors?
- High risk tolerance, 2. Invest in early-stage companies, 3. Offer mentorship, 4. Seek high returns. (Lesson 10, p.2)
How can startups engage angel investors?
- Prepare a strong business plan, 2. Build a pitch deck, 3. Leverage investor networks, 4. Demonstrate traction. (Lesson 10, p.2)
What are major angel investor networks in Kenya?
- Kenya Angel Investors Network (KAIN), 2. Nairobi Angels, 3. Kiboko Angels, 4. Africa 54. (Lesson 10, p.3)
Who are High Net-Worth Individuals (HNWIs)?
Individuals with investable assets of at least $1 million, often investing in diverse assets. (Lesson 10, p.4)
What are key investment preferences of HNWIs?
- Diversified portfolios, 2. Private equity, 3. Impact investing, 4. Wealth preservation. (Lesson 10, p.4)
How do private equity firms finance projects?
They invest in businesses for a share of equity, often providing capital for growth and expansion. (Lesson 10, p.5)
What are the benefits of private equity financing?
- No debt obligations, 2. Strategic guidance, 3. Access to industry networks, 4. Flexible terms. (Lesson 10, p.5)
What is venture capital (VC)?
A type of private equity financing provided to startups and early-stage companies with high growth potential. (Lesson 10, p.6)
What are common stages of venture capital funding?
- Seed Funding, 2. Series A, 3. Series B, 4. Growth Capital. (Lesson 10, p.6)
What is the role of venture capital firms?
They pool investment funds to support high-potential startups in return for equity. (Lesson 10, p.6)
What is debt financing?
Raising capital through borrowing that must be repaid with interest over a specified period. (Lesson 10, p.7)
What are the main types of debt financing?
- Bank Loans, 2. Project Bonds, 3. Development Bank Loans, 4. Mezzanine Financing. (Lesson 10, p.7)
What are the benefits of debt financing?
- Retain ownership, 2. Tax benefits, 3. Predictable repayment schedules, 4. Access to large capital. (Lesson 10, p.7)
What are the risks of debt financing?
- Fixed repayment obligations, 2. Interest rate fluctuations, 3. Collateral requirements, 4. Financial strain. (Lesson 10, p.7)
What are grants in project financing?
Non-repayable funds given for specific purposes such as education, research, or social programs. (Lesson 10, p.8)
What are subsidies in development financing?
Financial support provided by governments to reduce production costs and support specific industries. (Lesson 10, p.8)
What are common types of grants?
- Research Grants, 2. Business Grants, 3. Educational Grants, 4. Nonprofit Grants. (Lesson 10, p.8)
What are common types of subsidies?
- Agricultural subsidies, 2. Energy subsidies, 3. Housing subsidies, 4. Export subsidies. (Lesson 10, p.8)
How do governments support development projects?
- Providing grants and subsidies, 2. Issuing development bonds, 3. Guaranteeing project loans. (Lesson 10, p.8)
Why is financing development projects important?
It enables infrastructure growth, social improvement, economic expansion, and sustainability. (Lesson 10, p.8)
