Dearth of Film Financiers Puts Tollywood Producers in Crisis

Tollywood is facing one of its most pressing challenges—a severe shortage of film financiers, which is casting a shadow over the industry's sustainability.

Veteran producer Lagadapati Sridhar has raised concerns about the lack of accessible financing avenues, calling it a major hurdle for filmmakers today.

“Financing is key for any industry to thrive. Unfortunately, the Telugu film industry isn’t as lucky,” Sridhar states. “I personally tried securing funding for one of my projects and discovered that only two active financiers remain. Most others have shut shop.”

According to him, private financiers who still operate charge steep interest rates—anywhere between 18% to 24% per annum—and they typically support only big-star ventures.

“Getting funds without collateral is nearly impossible. Only the top 5 to 6 heroes manage to secure financing, and even they benefit from OTT advances and Hindi distribution rights,” he explains.

To counter the crisis, some producers are turning to Mumbai-based corporate houses and major music labels like T-Series, Saregama, and Pen Studios. While this has helped to some extent, Sridhar notes these companies are very selective, choosing only high-profile, pan-India projects with major stars. “They are playing it safe. Mid-range and small films are left out of this funding net,” he adds.

A few producers with personal wealth—between ₹10 to ₹20 crore—continue to invest in films, often to launch or promote their own family members.

However, for most others, the cash crunch is becoming unbearable. “Some invest for instant popularity. If their films succeed, they stay; otherwise, they disappear,” Sridhar observes.

Sridhar also comments on the rising trend of Non-Resident Indians (NRIs) investing in Tollywood, labeling some of it as "movie tourism."

He warns, “Many NRIs, misled by the glamour of cinema, over-invest without understanding the ground realities. While their intent might be good, their lack of control and overspending is artificially inflating remuneration, which hurts regular producers.”

With banks and financial institutions demanding collateral for loans, many producers are left with no option but to borrow from private lenders—some reportedly charging 36% or 48%, especially from financiers in areas like Cuddapah.

“It’s unsustainable,” Sridhar quips, urging state governments to step in. “Subsidies and financial incentives are essential. Over 70% of cine workers across 24 crafts are currently jobless. Financial support is not just important—it’s a necessity,” he concludes.