Indian Bank signs MOU with IISc's SID for funding startups, MSMEs
State-owned Indian Bank on Friday said it has entered into an MOU with Society for Innovation and Development (SID), an initiative of the Indian Institute of Science, for extending exclusive credit facility to startups and MSMEs.
This initiative is a part of Indian Bank's scheme Ind Spring Board for financing Startups and will empower Startups and MSMEs to realise their research efforts powered by financial support from the Bank and backed by incubation facilities offered by SID, it said in a release.
The Bank will extend loans of up to Rs 50 crore to these startups for their working capital requirements or for the purchase of machinery, equipment etc, it added.
Stating that SID is the forerunner in setting up joint R&D with industries and supporting startup incubation, the bank said that it provides support to the MSME sector by providing joint research and development arrangements, as well as technical and financial support for incubation and acceleration of high-end technology products under its department named TIME2 (Technology Innovation for Midsized Enterprises).
Under the MOU, SID will identify the startups and MSMEs based on their credentials and past experience, and will refer the list of such members who require financial assistance to the Bank, it added.
In another development, State-owned Indian Bank in collaboration with IIT-Madras Incubation Cell (IITMIC) launched an initiative for funding startups in October 2020.
Under the initiative — IND Spring Board — IITMIC will refer startups with proven technology and established cash flows to the bank and also extend advisory to the bank on the business model.
The lender will extend loans of up to Rs 50 crore to these startups for their working capital requirements or purchase of machinery and equipment, among others.
The bank's Managing Director and CEO Padmaja Chunduru said it is a known fact that banks find it difficult to fund startups as they do not meet the requirements under traditional models of financing.
(Disclaimer: Additional background information has been added to this PTI copy for context)