In a move that could make acquiring finance easier for upcoming Indian film-makers, the Commonwealth Business Council (CBC), a London- headquartered trade body, is establishing a Rs66-88 crore film fund with multinational backing for mid-sized film productions in India.
The fund, backed by banks from the UK, South Africa, India, and Singapore, will bring relief to a particular variety of film-makers who have found it difficult to acquire funds for their projects in an industry largely dependant upon formulas and maintaining the status quo. “We will bring the comfort of adequate corporate-governance standards which will ensure these smaller film-makers get funds for promising projects,” says Sanmit Ahuja, director of investments and trade finance, CBC.
In a recent interview with Mint, director-producer Pritish Nandy said: “We don’t get serious, affordable money from banks. Investors look at us with puckered eyebrows.” In fact, the high rates of interest charged by informal lenders for film-funding is one of the reasons smaller film-makers don’t spend enough on marketing. Currently, Exim Bank in India offers loans to films which have a large portion of export earnings. Some other pubic sector banks too have dabbled in film-funding, but this has been restricted to top- tier names like Yash Raj Films.
Sanmit says, “We’ve already got commitments of $15-20 million, and more will be signed on.” The advantages of foreign funding dedicated to small film-makers will be evident immediately. According to Ahuja, there will be no curbs on where the film is based, loans will be cheaper, and the fund will offer international rates.The CBC is also planning to arrange equity funding for films which it will support. An entertainment report by KPMG, the accounting firm, stated that the Indian film industry was “almost solely reliant on private and largely individual financing at extremely high interest rates,” but that film financing from “organised sources is on the rise.” In 2004, it said, “around 100 films availed of organised funding of Rs7 billion.”