atans1

How a SME bank could successfully operate

In Banks, Economy on 12/02/2015 at 2:08 pm

The u/m aricle in early Feb reminded me of something I read last yr about an SME bank in the UK

DBS Bank has launched a programme to provide financing to technology start-ups and expand capital-raising options for technopreneurs.

Tech start-ups can tap the new DBS venture debt programme for working capital, buying fixed assets and even project financing*.

Our SMEs (small and medium enterprises) are always KPKBing money not enough. Govt says got plenty of schemes. Why no use? SMEs reply that terms too stringent, and the people administering the schemes are clueless about their businesses. .

Well the UK, where SMEs too are cocal in complaining about funding, has the British Business Bank. It does things differently

BBB devolves responsibility for choosing its investments to private-sector expertise by allowing the Angel CoFund board, composed of independent bankers and investors, to make the investment decisions. “This is a financial strategy to complement the government’s industrial strategy”, says Mr Morgan. It also uses the expertise of peer-to-peer lenders like Funding Circle, to which it has given £40m. Mr Morgan says the bank can thereby avoid crowding out the private sector. Its investments are always in the equity of a business, but it never takes a majority share.

http://www.economist.com/news/britain/21627667-government-scales-up-help-small-businesses-angels-and-bankers

*To qualify, tech start-ups must be backed by DBS’s partner venture capitalists, who include Vertex Venture, Monk’s Hill Ventures and Golden Gate Ventures. They should have raised at least $1 million of Series A funding, been in operation for at least a year, been incorporated for at least two years and have demonstrated that their business model is commercially viable.

“Start-ups in Singapore primarily rely on venture capital to fund their operations,” DBS said in a statement on Thursday.

– See more at: http://www.straitstimes.com/news/business/banking/story/dbs-launches-venture-debt-programme-tech-start-ups-raise-funds-20150205#sthash.efDblYoB.dpuf

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