Haryana chief minister Manohar Khattar announced on Saturday that the state would give collateral-free loans up to Rs 1 crore to startups in the state. Collateral free loans are kind of unsecured loan where the signature of the borrower(startups) on the loan contract is the only security that the lender(banks) has to commit you to pay the loan back in full.
Further details such as how and when loans would be given and which banks in the state would participate for the scheme are yet to be announced however.
Notably, the only city in the state having startup activities is Gurgaon (now Gurugram) which it is having because of its proximity with New Delhi.
The CM’s words generated huge interest in the city, which is a leading start-up hub. Sandeep Aggarwal, founder of Shopclues, said, “If we list the most important things for the success of a startup, the first six would be capital. In such a scenario, it is important that entrepreneurs have access to affordable capital. The cost of capital in India is 16% as opposed to 2% in the US and 3-4 % in China. The startup fund is a welcome move. But the government should match the pace of its talk with the walk.”
Rajesh Sawhney, founder of GSF accelerator and Gurgaon-based Innerchef, said more clarity is required on which sector will be the focus for the government’s funds. “Also, how soon the funds reach the entrepreneur,” he said.
Rajat Tandon, vice-president at Nasscom’s 10,000 Startups, said, “We welcome the announcement. Gurgaon has the potential to be the startup hub of North India. It would be nice to understand the sectors the fund will be deployed in.”
Gurgaon-based unicorn startup OYO Rooms’ founder and CEO Ritesh Agarwal also greeted the announcement with enthusiasm, saying it would add further momentum to developing startup hubs across many parts of the country. “This is a progressive step which we welcome whole-heartedly,” he said.
Last year, the state government had partnered with Nasscom to open 16 acres startup warehouse in Gurgaon under 10000 startups program. Currently, the city has virtual warehouse by Nasscom.
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