Indian Bank ties up with IIT-Madras to lend up to Rs 50 crore to start-ups

Topics Indian Bank | IIT Madras | Startups

Padmaja Chunduru, MD & CEO, Indian Bank along with Executive Directors M K Bhattacharya, V V Shenoy and K Ramachandran at the launch of Ind Spring Board
Indian Bank has collaborated with IIT Madras Incubation cell to launch 'IND Spring Board', an initiative for funding start-ups.  The Bank will extend loans of up to Rs 50 crore to these start-ups for their working capital requirements or purchase of machinery and equipment.

Padmaja Chunduru, MD & CEO, Indian Bank said that it is a known fact that banks are finding it difficult to fund start-ups, as they do not meet the requirements under traditional models of financing.

Start-up typically have a high technology business model, in which cash flow visibility is low, credit history is sparse, and the burn rate and chances of failure are high, making the process of due diligence for assessing viability by banks difficult. As a result, this segment has been almost completely funded by Seed Capital, or private equity from India and abroad. Both the government of India and RBI have been constantly bringing in enablers to help this ecosystem.

Indian Bank has stepped in to bridge this gap in funding through this collaboration with IITMIC. Under the MOU, IITMIC will refer start ups with proven technology and established cash flows to the bank and also extend advisory to bank on the business model.

She added, "we believe will be the spring board for start ups to realise their ambitions. We see this collaboration as a perfect fit both for the Bank and IITMIC. She also recalled that the Bank has recently launched MSME Prerana programme to empower MSME entrepreneurs through skill development and capacity building workshops in local languages" .

Ashok Jhunjhunwala, Co- Chairman, IIT Madras-Incubation Cell praised the efforts taken by the Indian Bank Team in finalising the agreement/MOU very quickly. For start-ups working capital is a bottleneck, since they don’t have collateral and the entrepreneurs are also not in a position to provide personal guarantee. By launching  “IND Spring Board” , Indian Bank has proved that it certainly cares for these entrepreneurs. This is a proud moment for the whole country.

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