SBI will provide funds to startup companies, making this special plan
Startup companies have to raise equity funds to run their business and promoters have to sell their stake. Debt funds are not available for this sector, as these companies remain in loss in the initial years. SBI Managing Director (International Banking, Technology and Subsidiaries) Ashwini Kumar Tiwari said at the annual general meeting of The Bengal Chamber, “We have to struggle to finance startups. The rules allow loans only to profitable companies. He said that the bank is doing equity funding through subsidiary SBI Ventures.
State Bank of India has said that the startup is working on a way to provide loans to companies, as the current rules allow banks to lend only to profitable companies. A senior bank official said that startup entities have to raise equity funds to run their business and promoters have to sell their stake. Debt funds are not available for this sector, as these companies remain in loss in the initial years. Prime Minister Narendra Modi launched the Startup India initiative in January 2016. Since then, the number of government-approved startups has grown 85 times. This number was 504 in 2016 which reached 42,733 in 2020.
On the economy, Tiwari said that despite the strong improvement in the country's growth, it will remain below 2019 due to the pandemic. With the help of this fund, the government is preparing to start a startup revolution in the country. Funds will be used to promote innovation, support the idea and implement it for business.
Most of the fund will be used more in two-tier and three-tier cities of the country because the government's special attention is on these cities. The government's priority is to develop these cities. Such cities do not have their own resources and are deprived of the rest of the funds. Along with this, innovators of rural areas will also be able to start their business with the help of this fund. DPIIT has done a lot of work in this direction and constantly releases new ideas to promote startups. The focus of the government is more on the fact that people should work on giving more jobs or employment than getting jobs so that it can help more people. To give employment, some work will have to be started and this will be done only when government funds can be easily available. In view of this demand, the entire base of startups in the country is being prepared.
