Prime Minister Narendra Modi on February 26 insisted on raising corporate credit to meet the needs of a deficit economy. He also stated that financial products will need to be adapted to fintechs and startups. Despite the government's efforts to promote the private sector, the public sector still needs its presence in banks and insurance to support the poor. The prime minister promised to help many small businesses during the pandemic where a credit of Rs 2.4 trillion was granted to ninety lakh MSMEs. There is a need to support MSME and startups and boost their credit flow.The government has embarked on reforms and opened up areas such as agriculture, coal and space.It is now incumbent upon the financial sector to understand the aspirations of rural and small towns and make them the strength of Aatmanirbhar Bharat. As our economy grows and grows rapidly, so too has the credit flow become just as important.We must look at how credit reaches new sectors, new entrepreneurs.Now, we are going to have to focus on creating new and better financial products for startups and fintech.Declaring that Kisan Credit has assisted small-scale farmers and ranchers in taking over informal credit,the prime minister said the private sector will now need to think about innovative financial products for this part of society. He believes that the government has a clear vision of the financial services sector and is taking steps to make it dynamic, proactive and strong.The experience, trust and transparency of individual depositors and investors is the government's top priority. The trust is built around deposit security and economic growth.Old policies with respect to banking and non-banking need to be changed.The financial sector suffered ten or twelve years ago from aggressive lending.Measures have been taken to remove the country from a credit culture that is not transparent.The government recognizes the ups and downs that businesses face and does not encourage people to believe that all business decisions are made with the wrong intentions.The government has a responsibility to make any business decisions that are well-intentioned.Through the 2021-22 budget, the government proposed to privatize two public sector banks, authorised 74 percent of foreign direct investment in the insurance industry and announcement of the initial public bid by Life Insurance Corp of India.ARC will focus on addressing bad debts, which will help strengthen PSBs and increase lending capacity. There are 130 crore people with Aadhaar cards and 41 crore people with Gandhian accounts, 55 percent of whom are women. On an average Rs 4 lakh crore value transactions are carried out via the UPI platform each month and there are 60 crore holders of RuPay cards. All sections of the society have access to credit and Rs 15 lakh crore have been expanded across MUDRA Yojana.Around Rs 1.15 lakh crore were placed in 11 crore farming families by PM Kisan Swanidhi Yojana..
A funding body for budding/developing firms is known as VENTURE CAPITALIST.How can we build such a fund in India?Let’s check: Ensure the eligibility benchmarks:The initial step is to apply for the venture capital fund.The SEBI board checks all the norms and ensures whether the eligibility benchmarks are achieved t0 permit the “Venture Capital Fund”.The considering eligibility benchmarks are: For TRUST: should be registered properly under the registration Act provisions.For LLP:should be registered properly under the Limited Liability Partnership Act 2008.
For BODY CORPORATE: The VCF activities are handled by the Memorandum of company.Apply to SEBI Submit your application to SEBI through appropriately filled, numbered, duly signed and stamped Form A, along with the required documents.An application fees of Rs.1 lakh should be submitted through bank draft.Online application are also acceptable under the specified rules.
Application status Review If the board approves the application,then the approval will be informed to the applicant.Compliance for applicant/sponsor/managerThere should not be any offence charged against the Director or any prime individual for moral turpitude or they must not be part of any lawsuit connected with the share bazaar which will affect the business.VFC should be efficient and effective to handle the operations.A clear report of the investing purpose,aimed investors,proposed body,investment structure,and details of fund return should be submitted at the registration time.The individuals under the Schedule II of SEBI Regulations are only acceptable.Registration fee payment:After the SEBI approval,an amount of Rs 10 lakh must be released as mentioned in Part A of the Second Schedule as per mentioned in the Part B in considering the Securities and Exchange Board of India.
Issuing Registration Certificate:After the payment the SEBI will issue the certificate as ‘Venture Capital Fund’ in Form B.
Compliance filing:After registration, monitor the SEBI website regularly,to know the instant VCF updates.If any material change occurs,inform the SEBI instantly.VENTURE SCHEME for FARMERSVenture Scheme for farmers is an interest free loan from SFAC (Small Farmers’ Agri-Business Consortium - society for farming, collaboration and farmers welfare, ministry of farming ).Government of India are already facing many financial shortages so venture scheme will be a relaxation.The need for Venture Scheme in Agriculture is that:To financially support agripreneurs to make reserves in setting agroindustry ideas.Set up interest free credit to the start-up.Eligible Applicants for Venture CapitalCompany/ AgripreneursPartnership or proprietary firmsFarmersUnits in agri-export regionsSelf-help groupsProducer assembliesRequired Documents: Request a letter to the Chief management of SFAC(Small Farmer’s Agri-Business Consortium )by the promoter.Authority approved sanction note,addressed to specific departments.An agreement supporting farmer’s list/backward linkage.A bank's permission note signed by the authorised authority mentioning the terms of sanction of term loan.
A Bank’s acknowledgement assuring, they will not absolve any primary or collateral security without the venture capitalist acknowledgement.
How do you raise funds for your startup business?Investors look for many things before funding a brand new venture.
How strong the business model, expansion, and expenditure plans are and how investors will receive their return matter the most to attract funds.Many things are intimidating young entrepreneurs in raising finance for their startups.
We have explained the 5 most common funding trials in the below post to help entrepreneurs find adequate funding for their new venture.
