Assertion : Venture capital has been used as a tool for economic development in a variety of developing regions.
Reasoning : Venture capital plays a role in facilitating access to finance for small and medium enterprises (SMEs), which in most cases would not quality for receiving bank loans
Answer & explanation
Correct answer: option 1
As an industry, Venture Capital has originated in the United States, and American firms have traditionally been the largest participants in venture deals. Venture capital has been used as a tool for economic development in a variety of developing regions. In many of these regions, with less developed financial sectors, venture capital plays a role in facilitating access to finance for small and medium enterprises (SMEs), which in most cases would not quality for receiving bank loans.