The biggest challenge to majority of business investors is lack
of adequate business funding to support the expansion and operation of
their business. Despite much advertisement of TUF loan, it remains a
dare to land friendly funding especially for small and medium businesses
with unreliable incomes. The problem is further fueled by high cost of
living, which has lowered the disposable income for most individuals and
thus, reducing the amounts people are willing to save. Reduced
individual savings has affected TUFS ability to offer TUF loan
adequately to meet the higher market demands. On the other hand,
businesses have been highly hit by the rising cost of materials and
operations reducing their profits to extremely low levels.
The
effects of high cost of living on the businesses subject them to loss
making, which activates their need for subsidy and TUF loan. On TUFS,
the higher subsidy demand lowers their ability to offer higher TUF loan
at low interest rates further escalating the inability of small business
ability to find capital subsidy. The TUFS were constituted by the
government of India to facilitate small and medium business find
revenues to support their activities. TUF scheme adds business with
funding options. However, it is essential to understand that the TUF
loan options in some occasions make selection daunting.