Page 21 - Banking Finance December 2022

COVER STORY

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 developments the banking sector has forward startups would constitute a significant source of
revenue and profitability growth for the banks and are keen
undergone many changes. As the financial
activity gained pace and the market opened
for competition, the innovation in the financial sector has to seize this opportunity. Earlier the possibility of 9 out of
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. of the industry, they have instead ventured in all those
spheres that had the scope of making things better and
India has had umpteen startups in the last few years of improving the processes.
whom some have been able to make their mark while the
others could not, which in way is understandable as it is in The role and support of Banking Sector:
the nature of startups who follow a high risk high return
On 6th January, 2016, 'Startup India' initiative was launched
approach.
by the Government of India to cater to the needs of the
budding start-up eco system in the country. In view of the
About the author country's young manpower and with an aim to promote
employment opportunities, it has been a commendable step
Jatin Khanduja in the right direction. The entrepreneurs in India have
Manager (Research)
received funding from various private institutional and non-
SBA, Gurugram
institutional investors and also from Banks. When we talk
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