Can Small Finance Banks be the Angels Entrepreneurs Are Looking For?

By Hemanth | October 6, 2015

Depressed Businessman

Missed a funding round by Tiger Global?

Passed over by Catamaran Ventures?

Wondering what it’d take to land an angel investor or seed funder when everyone who’s anyone is getting funded?

Fret not.

Small finance banks are here!

Budding and wannabe entrepreneurs can breathe a bit easy now. Late last month, the RBI granted new banking licenses to 23 entities, of which 10 were small finance banks.

These banks aim to lend in the Rs. 50,000 – 10 lakh range. While Micro-Finance Institutions lend upto only Rs. 1 lakh, Non-Banking Financial Companies (NBFCs) do not lend below Rs. 10 lakh. Small finance banks slot the gap quite nicely.

Along with the government-sponsored MUDRA Bank  initiative, entrepreneurs looking for funding to start a business or catalyze a venture beyond early startup phase can now look forward to more options than just private sources of funding like seed fund providers or angel investors.

MUDRA, for example, has already lent around Rs. 25,000 crore since April, when it was launched.

Entrepreneurs looking for alternative sources of startup capital thus never had it this good. They now have scalable initiatives by the RBI and the Central Govt to bank on.

 

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About Hemanth G

Hemanth is Editorial Head of Content Research at BankBazaar. A published author with Westland Publishers, Hemanth is an alumnus of Indian Institute of Management Calcutta and has been a senior management professional for over a decade and a half, with deep experience in business strategy and marketing and a specialization in Advanced Finance from AIMA. Five years and a day ago, he started writing in a professional capacity, and has since penned seven books including two bestsellers. Also a consulting editor, his works include fiction novels, international anthologies and corporate biographies. Hemanth writes under the pseudonym of "Hemanth Gorur".

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