For our term paper, the two countries we decided to focus on are Brazil and India. We chose these two countries as they are both exciting, emerging economies with lots of potential for growth. However, they are also very different in terms of institutional structures and the challenges that they present for multinationals trying to do business there. India, a country located in South Asia is the world seventh largest country and the second most populous country after China, with a population of over 1.2 billion people. India has both a prime minister and a president. India is a union of states. It is officially classified as a Sovereign, Socialist, Democratic Republic with a parliamentary system of government. The Republic is governed in terms of the Constitution of India. India is also one of the world’s fastest growing economies and they have the world’s third largest purchasing power parity and are the world’s tenth largest economy. Brazil is the largest country in South America and has a population of over 193 million people. Brazil is a federal presidential constitutional republic, based on representative democracy. The federal government has three independent branches: executive, legislative, and judicial. Like India, Brazil is also a very rapidly growing economy and along with India, Russia and China make up the BRIC countries. Brazil is rated the world’s sixth largest economy and have the world’s seventh largest purchasing power parity. As far as institutional structures are concerned we are going to examine both financial institutions and government agencies in the two countries. Financial institutions in India have been the source of long-term funds for the economy, they also provide assistance for small and medium enterprises (SMEs) as well as certain industries. The country’s financial institutions can be categorized into All India institutions and State level institutions. They can provide loans at the national level with reasonable rates of interest. Some of the financial institutions that have been set up at the national level include the All India Development Banks, which provide credit not only to large and medium enterprises but also help with the promotion and development of small enterprises. Some examples of these include the Industrial Development Bank of India, Industrial Finance Corporation of India Ltd, Small Industries Development Bank of India and the Industrial Investment Bank of India. Specialized Financial Institutions are those institutions, which have been set up to serve the growing financial needs of commerce and trade in areas of venture capital, credit rating and leasing. Some agencies of note include the IFCI Venture Capital Funds Ltd, ICICI Venture Funds Ltd and the Tourism Finance Corporation India Ltd. Investment Institutions cater to the needs of small savers and investors. Their assets are deployed mainly in marketable securities. Examples include the Life Insurance Corporation of India, Unit Trust of India and the General Insurance Corporation of India. Financial institutions set up at the state level help promote investment and industrial development in their respective states. State Level Institutions consist of State Financial Corporations and State Industrial Development Corporations. State Level Institutions play a major role in the development of SMEs through loans, guarantees, discount bills of exchanges etc. State Industrial Development Corporations are set up to promote industrial development in their respective states and provide financial assistance to small entrepreneurs. One major difference is the lack of funding available for SMEs in Brazil compared to India. That is, in Brazil ‘judicial enforcement of other security interests (such as classic mortgages) and unsecured claims is still complex and slow, increasing the cost of financing, especially for SMEs’. However, Brazil’s financial institutions are nevertheless