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MUMBAI: State-owned Indian Bank on Monday entered into a memorandum of understanding (MoU) with the Society for Innovation and Entrepreneurship (SINE), IIT Bombay - an initiative of Indian Institute of Technology - for extending exclusive credit facility to startups and small businesses.

SINE, IIT Bombay, supports the MSME sector by providing joint research and development arrangements and technical and financial support for incubation and acceleration of high-end technology products.

Indian Bank said startups require funds to expand and grow, and one of the most common problems they face is maintaining positive cash flow. Under the MoU, SINE, IIT Bombay will identify the start-ups and MSMEs based on their credentials and past experience and will refer the list of such members who require financial assistance to the bank.

This initiative, it said, is a part of the bank’s scheme “Ind Spring Board for financing startups" and will empower startups and MSMEs to realise their research efforts powered by financial support from the bank and backed by incubation facility offered by SINE, IIT Bombay. The bank will extend loans of up to Rs50 crore to these startups for their working capital requirements or purchase of machinery, equipment, among others.

Padmaja Chunduru, managing director of Indian Bank, highlighted the start-ups’ need to be suitably counselled about the significance of equity and debt funding.

Indian Bank recently launched “MSME Prerana" programme to empower MSME entrepreneurs through skill development and capacity building workshops in local languages.

The MoU was signed by Sudhakar Rao (general manager, MSME, Indian Bank) and Santosh J Gharpure, professor-in-charge, SINE in the presence of Chunduru on Monday at IIT Bombay.

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