Reasons for Soft Capital Rationing

Reasons for Soft Capital Rationing

Reasons for soft capital rationing may be limited management skill, big opportunities, quality is priority.

1.    Management Skill

First reason for soft capital rationing may be limited skills of management to handle the multiple financing. It means that management is afraid of handling too many projects.

2.    Big opportunities

Second reason for soft capital rationing that management is interested in big wealth maximization opportunities. This may be a case for a reputable organization.

3.    Quality is priority

Third reason for soft capital rationing may be the quality focus. For many multinational and international companies quality is priority. Therefore they are more interested in quality than quantity.