Modelling the Determinants of Access to Finance and Entrepreneurial Intention

Evidence from Young Entrepreneurs in Gurugram

Abstract

This study examines the challenges faced by young entrepreneurs (aged 17–22) in accessing seed funding in India, with a particular focus on the role of government support, financial readiness, and structural constraints. It aims to evaluate whether existing policy interventions effectively improve access to finance and reduce funding barriers for this demographic. The study adopts a quantitative research design using primary data collected through a structured questionnaire administered via snowball sampling. Data from young entrepreneurs in Gurgaon, India were analyzed using Structural Equation Modeling (SEM) to examine the relationships between government support, entrepreneurial ability, financial readiness, access to finance, funding barriers, and entrepreneurial intention. The results indicate that young entrepreneurs face significant diffi-culties in accessing seed funding from formal financial institutions. Government support and entrepreneurial ability positively influence access to finance, while financial readiness significantly reduces perceived funding barriers. Access to finance has a strong positive effect on entrepreneurial intention, whereas funding barriers negatively impact entrepreneurial intention. These findings highlight that both institutional support and individual preparedness play a critical role in shaping entrepreneurial outcomes. The study is limited by its reliance on non-probability sampling and self-reported data, which may affect generalizability. Future research may incorporate longitudinal designs and comparative analysis across regions or age groups. The findings suggest that policymakers should en-hance awareness and accessibility of government schemes, while financial insti-tutions should adopt alternative credit assessment mechanisms to support young entrepreneurs. Improving financial readiness through education and training can further reduce funding barriers. Improving access to finance for young entrepreneurs can promote innovation, reduce youth unemployment, and contribute to inclusive eco-nomic development. This study contributes to the literature by focusing specif-ically on young entrepreneurs, an underexplored demographic, and by integrating government support, financial readiness, and behavioral factors into a unified em-pirical framework using SEM.