Page 19 - Banking Finance September 2023

ARTICLE

STARTUP

FINANCING:

OPPORTUNITIES

AND CHALLENGES

FOR BANKS

ith the growing of economy and fast paced Banks have now opened up to the possibility that going
W undergone many changes. As the financial revenue and profitability growth for the banks and are keen
forward startups would constitute a significant source of
developments the banking sector has
activity gained pace and the market opened
to seize this opportunity. Earlier the possibility of 9 out of
for competition, the innovation in the financial sector has 10 startups failing made the banks weary of advancing
increased and so have the revenue and profitability avenues finance to them. However considering their potential and
for the banks and financial institutions. The 21st century has the risks involved banks have now opened up avenues of
been the century of startups. With an unconventional financing to them.
approach to problem solving, an unrelenting zeal to succeed
and an open approach to new ideas, startups have truly It's not that startups have just touched one or two segments
disrupted the business landscape. India has had umpteen of the industry, they have instead ventured in all those
startups in the last few years of whom some have been able spheres that had the scope of making things better and
to make their mark while the others could not, which in way improving the processes.
is understandable as it is in the nature of startups who
follow a high risk high return approach.
The role and support of Banking Sector:
On 6th January, 2016, 'Startup India' initiative was launched
by the Government of India to cater to the needs of the
budding start-up eco system in the country. In view of the
country's young manpower and with an aim to promote
employment opportunities, it has been a commendable step
in the right direction. The entrepreneurs in India have
received funding from various private institutional and non-

BANKING FINANCE | SEPTEMBER | 2023 | 19