A Memorandum of Understanding (MoU) was signed by the Karnataka Digital Economy Mission (KDEM) and State Bank of India on Friday, allowing SBI to build the first branch in the nation specifically for startups (the SBI Startup Hub branch) in Koramangala. Inauguration of the branch is scheduled for August.
The partnership will make it possible for companies around the state to access banking services, investment, and credit options. Startup business owners would receive financial support of Rs 2 crore without the need for collateral.
The current startup environment in the state would be strengthened by the MoU, according to Dr. C N Ashwath Narayan, Minister for IT/BT. In the next six months, he declared, SBI will open comparable branches in the Hubballi-Dharwad, Mysuru, and Mangaluru clusters.
“In accordance with this Memorandum of Understanding, SBI will endeavour to develop and enable a mechanism for entrepreneurs sponsored by KDEM and recognised by the Government of Karnataka to access time-bound finance based on the purchase order. SBI has consented to be one of the partner organisations for the proposed innovation centre, sharing information and offering financial assistance, while KDEM has committed to construct a Fintech Innovation Hub at Mangaluru with a focus on the Fintech sector, he added.
Narayan highlighted his belief that the partnership between KDEM and SBI will help businesses by facilitating access to banking facilities, particularly targeted services like access to money and credit facilities, among others, to support companies throughout the state.
“The state government plans to assist new businesses by utilising the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) programme of the federal government, which offers loans of up to Rs 2 crore for micro and small businesses. There are more than 13,000 firms in Karnataka, some of which are struggling for funding. By making credit more accessible, the MoU between KDEM and SBI will contribute in resolving this, according to the minister.
The Union government established CGTMSE to provide collateral-free loans to the micro- and small-business sector.
Speaking at the event, Rana Ashutosh Singh, SBI’s Deputy Managing Director (Transaction Banking & New Actions), said that the state government’s initiatives have compelled SBI to build the nation’s first dedicated branch for cluster seed funding.
“We intend to create a product specifically for entrepreneurs. The startup-only branch is the dedicated branch. There will be everything you need to help entrepreneurs here. According to Singh, the branches that will open in the Mysuru, Mangaluru, and Hubballi-Dharwad clusters would all be connected to the Koramangala branch.
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