DPIIT in talks with IBA to improve banks’ outreach to start-ups

DPIIT in talks with IBA to improve banks’ outreach to start-ups

Subject: economy

section: national Income

The Department for Promotion of Investments and Internal Trade (DPIIT) is in discussions with the Indian Banks Association (IBA) on ways to get banks to reach out to Indian start-ups to understand their financial requirements and help improve penetration of branches across sectors and cities, said a senior official.

Concept :

About the Startup India Seed Fund Scheme (SISFS):

• Aim: To provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization.
• Launched by: Department for Promotion of Industry and Internal Trade (DPIIT) with an outlay of Rs. 945 Crore.
• Some Eligibility Conditions:
  • A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application.
  • Startups should not have received more than Rs. 10 lakh of monetary support under any other Central or State Government scheme.
• Features:
  • It will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years.
  • An Experts Advisory Committee (EAC), constituted by DPIIT, will be responsible for the overall execution and monitoring of the Scheme.
  • Grants of upto Rs. 5 crore will be provided to the eligible incubators selected by the committee.
  • The selected incubators will provide grants of up to Rs. 20 lakh for validation of proof of concept, or prototype development, or product trials to startups.
  • Investments of up to Rs. 50 lakh will be provided to the startups for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments.
• Expected Benefit:
  • It will help in creating a robust startup ecosystem in Tier 2 and 3 regions, as the smaller towns in India are often not provided with appropriate funding.

The MAARG Portal

• It is by Startup India is a one stop mentorship platform to facilitate mentorship for startups across diverse sectors, functions, stages, geographies, and backgrounds.
• Startups can connect with academicians, industry experts, successful founders, seasoned investors, and other experts to get personalized advice on growth strategy, seek clarity, and get practical advice.

Startup India

• Startup India was introduced in 2016 as a call to innovators, entrepreneurs, and thinkers of the nation to lead from the front in driving India’s sustainable growth and create large scale employment opportunities.
• The entrepreneurial portal had more than 65,000 startups registered.
• Of which, 100 attained the ‘unicorn’ status recently, bringing the total as of date to 90.
• India is ranked third among global startup ecosystems.
• India’s largest online entrepreneurship platform allows startups to network, access free tools & resources and participate in programs & challenges.

About IBA

• It is a representative body of management of banking in India operating in India or an association of Indian banks and financial institutions based in Mumbai.
• It was formed in 1946 for development, coordination and strengthening of Indian banking, and assist the member banks in various ways including implementation of new systems and adoption of standards among the members
• Public Sector Banks, Private Sector Banks, Foreign Banks having offices in India, Co-operative Banks, Regional Rural Banks and All India Financial Institution are its member.
• IBA currently represents 237 banking companies operating in India.