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India’s largest private sector lender looks to support startups in the social space

In the past three years, the bank has given grants to over 60 startups that offer unique solutions to bring about sustainable change in society and the environment

ET Online|
Last Updated: Feb 26, 2020, 12.06 PM IST
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In the past, Smart-Up grants have been given to some unique ideas by startups working on innovative solutions in tackling climate change, waste management, skills training and enhancing livelihood.
By Mamta Sharma

Social startups by the virtue of their work domains and operational geographies take a lot of time to become self-sustainable and as a result can’t invest in research and development and operational expansions at an early stage from their own budget. This seriously affects the social enterprise’s progress, which in turn impedes their ability to create an impact.

To serve social innovation, HDFC bank on Tuesday disbursed SmartUp grants cumulatively worth Rs 5 crore to startups working in the social sector under the aegis of Parivartan, the umbrella name for the bank’s social initiatives. In Bengaluru, 20 startups were awarded these grants. This takes the total tally to more than 60 startups that have been given this grant over the past three years.

“Startups fuel innovation in all sectors of the economy and we in HDFC bank support startups in all sectors. From starting nowhere, there are almost 9000 startups banking with us today. The SmartUp grants are part of the bank’s endeavor to further deepen our relationship with the startup eco-system in India. We realize there are startups who are working on innovative solutions to bring a sustainable change in the society. Therefore, these grants are a small token of our appreciation and encouragement to startups in the social sector to pursue ideas that’s benefits the society,” said Smita Bhagat, Country Head, Government & Institutional Business, e-commerce and startups, HDFC Bank in Bengaluru on Tuesday.

Bhagat added that the bank hopes to take the number of startups that will be benefitted from the Smartup grants to 100 by the end of the next financial year.

The Bank works through incubators such as IIT Kanpur, T -Hub, KIIT TBI, Villgro, IIM Ahmedabad, IIM Bangalore and BITS Pilani to among others to identify startups in the social sector. The foremost criteria to identify startups for the grants include sustainability of the idea, potential to scale up, how does it benefit the society and the environment and uniqueness of the project.

The bank today has 70 dedicated startup branches across 30 cities in the country, including tier 2 and 3 cities that are emerging as startup hubs. “We have also tied up with MeitY startup hub which is a part of the Ministry of Information and Technology and are working with six state governments to encourage startups and entrepreneurship,” informed Bhagat. The bank recently partnered with the Orissa government to boost the startup scene in the state.

Binayak Acharya, founder of ThinkZone, one of the shortlisted startup for the HDFC grants this year, says this approach of HDFC in providing social startups with grant support helps them in working on multiple strategic initiatives, which they otherwise would not have been able to work on at the early stage and helps the social startups in creating deep meaningful impact in the long run.

“The investment space in the social sector ecosystem has really grown in the last few years, but there are still challenges for social enterprises in getting the right opportunities and networks especially if we are from a tier-2 or tier-3 place. The HDFC grant will help us expand our work to newer geographies while simultaneously working on fine-tuning our current educational program offerings,” says Acharya.

ThinkZone works towards improving the educational outcomes of early-grade learners from low-income communities using a technology-enabled school-in-a-box approach. Started in 2015, the startup is currently implementing its education program across 400 plus villages in four districts of Odisha.

“Besides banking we also support the startups through mentorship from our senior management and our advisory services which are a result of our tie ups with the co-working spaces, legal firms and chartered accountants among others and. The startups can avail of their services at a lower cost than on what they would have gone directly,” informed Bhagat.

Bhagat also mentioned that the bank also has a market platform where the startups can register themselves and sell their products to the banks’ customers.

“We also do corporate connect. Many corporates and MSMEs have a problem statement, but they do not know where to go so we connect our startups to them. Also, there are a large number of high networth customers who are looking for investments. We connect them depending on their area of interest and they then take it forward from there,” she added.

In the past, Smart-Up grants have been given to some unique ideas by startups working on innovative solutions in tackling climate change, waste management, skills training and enhancing livelihood. For example, last year, grant was offered to Bleetech, a startup that works on need - based technological solutions in the social sector for the deaf and hard of hearing community. Another example is Kriya Labs, that’s developing a processing technology to convert agro-waste like rice straw into pulp, which can then be used to make several biodegradable products like cups, plates and other tableware.

“We as a bank take startups as an important segment and hope to continue working with them to grow their business. We would like to be a dominant bank and go to bank for the startup community,” said Bhagat.

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