As reported by LiveMint, Indian Bank will fund debt capital to the Indian Institute of Management, Bangalore (IIM-B). The move comes with an aim to help startups receive working capital and growth without diluting equity early in their life cycle.
According to IIM-B’s director, Rishikesha Krishnan, the institute has a target of providing a support system to young ventures through the N. S. Raghavan Centre for Entrepreneurial Learning, which is the incubation and entrepreneurial centre for relatively newer companies that have a potential to innovate, implement as well as create social and financial impact.
The director said, “This (partnership) includes mentoring, providing network opportunities and access to funding. So far, most of the funding has been focused on equity, mostly through government schemes. There were not too many opportunities for debt financing. That is why this collaboration with Indian Bank is special.”
Venkatesh Panchapagesan, Chairperson of the incubation centre at the institute stated that the partnership would make debt capital easily available for startups. He continued saying that many growing startups require working capital that can be achieved through this arrangement without having them dilute equity.
The CEO of Indian Bank, Padmaja Chunduru added, “There is a lot of goodwill between IIM-B and Indian Bank…there has always been a need for debt capital for start-ups as they had never really fit the traditional lending models of banks in India.”
