SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation and Infrastructure
Institutions: Department for Promotion of Industry and Internal Trade (DPIIT) | Ministry of Finance
The World Intellectual Property Organization (WIPO) has published a new report “Moving IP Finance from the Margins to the Mainstream” showing how businesses could borrow and raise money using their ideas (intellectual property (IP) assets) - not just their buildings or machines. Today, most companies, especially startups and small businesses, rely on their creativity, brands, and technology rather than factories or land. In fact, such intangible capital was worth an estimated USD 80 trillion in 2024, making up more than 90% of the value of big companies in the S&P 500.
Yet banks and investors are still hesitant to treat these assets as real security. The report notes that SMEs face hurdles because lenders prefer hard collateral. Rules like Basel III - global banking regulations designed to keep banks safe-make it expensive for banks to lend against assets like patents or trademarks. Also, valuing IP is tricky, secondary markets are weak, and transaction costs are high.
Countries are experimenting with fixes: China’s IP-backed loans crossed USD 118 billion in 2023, Korea provides subsidies and insurance, Singapore set up an Intangibles Disclosure Framework to make company IP more visible, and UK banks have started IP-based lending programs. WIPO itself is pushing pilot projects, expert groups, and training to reduce risk and help lenders trust IP as collateral.
For India, this debate ties directly to Startup India, Digital India, and the RDI Scheme. If India builds its own IP finance ecosystem - valuation standards, insurance mechanisms, disclosure norms - it could help innovation-driven SMEs get loans without mortgaging property or personal assets.
What is WIPO? → The World Intellectual Property Organization (WIPO) is a specialized UN agency that sets global rules for patents, trademarks, and other intellectual property. It also helps governments and businesses use IP to support innovation and growth.
What is Intangible Capital? → Intangible capital means assets you can’t touch but that create real business value — like patents, brands, software, or designs. These often matter more than physical assets in today’s economy.
What is Basel III? → Basel III is a set of international banking rules that tell banks how much reserve capital they must keep. Because these rules favor physical collateral, loans backed only by intangibles like patents often get priced like risky unsecured loans, making them costly for borrowers.
What is IP Finance? → IP finance is when companies use intellectual property (patents, trademarks, copyrights, designs) as collateral to get loans, attract investors, or bundle into financial products. It helps idea-rich but asset-light businesses access growth capital.
Follow the full report here: WIPO Report