India’s 1st Ever Bank Branch For Startups Launched By SBI In This City!
SBI has signed an agreement with the Karnataka Digital Economy Mission (KDEM) to start the country’s first dedicated bank branch which would provide credit facility for startups.
The facility will be called the ‘SBI Startup Hub’ branch, which is dedicated to provide cluster seed funds to startups.
Enhancing startup ecosystem
The agreement will boost the prevailing startup ecosystem in the state by giving startups access to banking facilities, funding, credit facilities.
Rs 2 crore collateral-free financial assistance will be given to startup entrepreneurs.
SBI will work with the Karnataka government to support startups recognised by the state and provide them with time-bound credit based on the purchase order.
The first such branch will be opened at Koramangala, Bengaluru in August this year.
The location makes sense since Bengaluru is the startup capital of India, with the most number of start-ups in the country and sees the most number of start-ups established every single year.
SBI will start such branches at Mysuru, Mangaluru, and Hubballi-Dharwad clusters in the next 6 months.
Karnataka has more than 13,000 startups and some of them struggle with scarcity of funds.
Scheme for small businesses
The MoU between KDEM and SBI would help to address this by facilitating access to credits.
It also offers options to extend CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) loans to eligible firms.
The CGTMSE scheme was launched by the Union government to make collateral-free credit available to the micro and small enterprises sector.
Fintech hub to be set up
It will help startups by providing loans of up to Rs 2 crore.
The KDEM will establish a Fin-tech Innovation Hub at Mengaluru.
SBI has agreed to be one of the partner organisations for the planned Innovation hub sharing knowledge and providing financial support.