Page 44 - Banking Finance May 2022

ARTICLE

iv) Lack of demand- Entrepreneurs are suggested to gain explosion of ground-breaking startups providing solutions to
an in-depth understanding of who their customers are the real problems at a mass level since 2016.
and what they feel about their product/service.
Similarly, they should look for new customers via word While startups experience ample business opportunities in
of mouth before jumping into creating expensive the coming days, the Government's initiatives are praise
marketing plans. More importantly, it is necessary to worthy in providing all possible help in respect of non-
establish a relationship with the customers. financial aspects of promotion and development of startups,
much needs to be done on the part of banks which meet
v) Lack of leadership- Having a good idea is far less
just 36 per cent of credit needs. There seems to be some
important than knowing how to lead a brand, a
company, and a team. Lack of vision and strong hesitancy on the part of banks due to their perception of
leadership is another common reason why startups fail. high risk being associated with lending to startups. But,
Here, it is suggested that entrepreneurs shall develop there good many success stories due to liberal credit
a fair understanding of leadership qualities through provided by banks. Added to this, startups provide
education and training. Also, at the initial stage, it is a employment to youths mostly in smaller towns which is one
good idea to find a mentor to help the entrepreneurs of the priorities of the Government.
to develop leadership skills.
In addition, credit guarantee cover is now raised up to Rs.
vi) Lack of agility- One of the reasons is not being adaptive 5 lakhs. Hence, it is suggested that banks have to create a
and agile in order to progress. Startups are advised to
pool of trained officers to finance startups and adopt
ensure agility within the organization by practicing professional approaches in credit appraisal, follow-up and
continuous learning, having a fluid workforce, research and recovery. Thus, realizing the growing importance of startups
development and be willing to let their ideas to change.
in the coming years, banks have to change their mindset
vii) Lack of business model- The startups should look for a and be liberal in providing timely and credit adequate credit
foolproof business model carefully to sustain and profit. to startups. Towards this end, .banks have a long way to go
(viii)Lack of talent & competency- Most times startups are to be startups friendly.
cash strapped and cannot afford to hire experts. References:
Therefore, the entrepreneurs are suggested to plan
1. Web-site of Department Industry and Internal Trade for
their hiring processes with utmost care, create Promotion of (DPIIT) for Promotion of Industry and
alternative working methods such as work on a project
Internal Trade, GOI.
basis model with expert professionals etc. Lastly,
2. Web-site of Ministry of Micro, Small and Medium
ix) Ignoring customers - Quite often startup founders have Enterprises, GOI.
too many things to handle and, in the process, 3. Web-site of Startup India.
customers may not even feature in their list of priorities.
4. Prarambh: Startup India International Summit, . Financial
But, when startups are committed to being customer-
Express, April 19, 2021.
centric, their decision-making becomes easy, their focus
gets narrowed down and their popularity increases from 5. Action Plan for Startups, Financial Express, January 16,
2021.
a word of mouth.
6. Startup India- The Way Ahead, Economic Times, April 16,
2021.
Conclusion:
7. Web-site of Startup India..
Currently, startups are witnessing a golden chapter in the
8. Pilot Survey on Indian Startup Sector - Major Findings,
history of Indian entrepreneurship. In this respect, the
Department of Statistics and Information Management,
Government acts as a catalyst and bring together the Reserve Bank of India 2019..
synergies of the private sector with the aim of innovating
9. Issues before Startups, The Hindu, November 09, 2020.
for India and the world. With hundreds of innovative
youngsters choosing to pursue the path of entrepreneurship 10. Survey of Startups and SMEs, Mint, May 28, 2021..
instead of joining the multinational corporations and 11. Report of IBM Institute for Business Value Survey of
government ventures, the business world has witnessed an Startups , 2019. T

44 | 2022 | MAY | BANKING FINANCE