The Role of Banking Institutions in the Growth and Sustainability in Start-ups

Abstract

The start-up scene in India has become a major driver of technical innovation, job creation, and economic expansion. Even while government programs like start-up India have promoted entrepreneurship, many firms continue to have difficulties obtaining official financial backing. By providing loans, financial services, and advising help, banking institutions-as official financial intermediaries-play a crucial role in supporting the expansion of start-ups. The purpose of this study is to assess the contributions of financial institutions to the growth and success of Indian start-ups. Using primary data gathered from 312 banking experts in both public and private sector for start-ups. The report identifies many major obstacles, including high perceived risk, a lack of collateral, start-up poor financial history, and legal restrictions that banks have to conform to when providing credit facilities to new businesses.

The results indicate that while banks recognize the potential of start-ups to spur innovation and job creation, their active involvement in start-up funding is constrained by a number of operational and risk-related constraints. The report makes insightful suggestions for enhancing the start-up funding landscape, such as enhanced credit guarantee procedures, banking awareness campaigns, and legislation changes. The findings of this study will be a valuable tool for financial institutions, legislators, and start-up entrepreneurs working to create a more welcoming and encouraging financial environment in India.