Resource Mobilization — Entrepreneurship STD 11 Commerce — Question

When an entrepreneur raises capital through bank or financial institution, then if he has to contribute some percentage of the total borrowed/ released amount by the bank or institution on behalf of the entrepreneur as margin money.

• It is the contribution by the borrower/ entrepreneur towards the cost of the project for which is applied for.
• No bank or financial institution will ready to finance the project unless margin money is contributed.
• No collateral security is required at the time of margin money contribution.
• It may vary from 15-25% according to type of business and institution.