MUMBAI: Better institutional financing would require a higher degree of professional management, better collaterals and tighter budgetary and time frame control from filmmakers.

Bankers who addressed the plenary session on financing of the media and entertainment industry on the third day of FRAMES 2003 were categorical that debt financing on a greater scale in Indian film projects would only be possible if they were assured of predictable cash flows, security and legal covenants and reasonable risk adjusted returns.

IDBI executive director A K Doda said that while the bank has disbursed loans worth over Rs 10 million thus far to filmmakers for over 20 projects in the last few years, all the films have recovered their money, with two films even being declared hits. This was an encouraging trend, Doda said, adding that IDBI has done away with the practice of asking for collatarels, preferring to put its trust in bankable producers.

However, neither Doda nor veteran filmmakers Yash Chopra, who made an impassioned plea for finance for young filmmakers' projects, could assure that an intermediate channelising agency could clear such projects and help banks take a decision on financing young, independant filmmakers.

ICICI executive director Kalpana Morparia was the only panelist who declared that her bank had financed not only film projects but also television serials. TV channels have received funding from ICICI against advertising receivables, based on past track record and viewership figures, and future projects could also benefit of finance against their software libraries, Morparia pointed out.

Merchandising and endorsements have also emerged as streams of additional revenue for films, making it easier for banks to venture in debt financing for filmmakers, she said. An organised structure of film companies, professional management and a focused approach was all that was needed for banks to evaluate film projects, she added.

While David Elms, head of KPMG corporate finance said Indian filmmakers' ability to raise finance could not escape being impacted by the global scenario, which has been bleak at best in the last two years, Bank of India chairman and MD K V Krishnamurthy also called for a professional approach among filmmakers. Rabo's Alexander Gelderman was the one who pointed out that filmmakers have to be evaluated with certain laxity as to their business sense, as otherwise they would have been businessmen as well.

The session: Financing of the Media and Entetainment Industry

Moderator: Bobby Bedi
Panelists: IDBI executive director A K Doda, Bank of India chairman K V Krishnamurthy, ICICI executive director Kalpana Morparia, KPMG partner David Elms, TiE president Shridhar Iyengar, Rabo International head of media and entertainment Alexander Gelderman, ABN Amro executive director, telecom and media Vijay Chopra