Kerala's student start-ups are suffering a fund crunch. Here's why

Student entrepreneurs in Kerala are still struggling to survive in the start-up eco-system due to lack of funding from the financial institutions and proper support from the government.

Even as the Kerala Start-up Mission (KSUM) has begun incubators and scaled up spaces in Thiruvananthapuram and Kochi as part of developing the ecosystem, funding for student start-ups remains a major problem.

Sources said the government gives priority to professional start-ups, called matured ones, due to its result-oriented approach. In the fallout, the public and private sector banks show reluctance to give student start-ups loans, pushing them to the verge of closure.

According to Technopark's Former Chief Financial Officer K C Chandrasekharan Nair, the Centre had directed public and private sector banks to provide Mudra loan to the financially-struggling start-ups, but they did not do it.

"The banks needed to provide feed capital to the student start-ups' smooth functioning. But the authorities didn't take any initiative in that direction. When I was looking after the incubator system at Technopark, the student start-ups were running successfully," said Nair.

It is alleged some banks have just maintained the records by distributing money to existing account holders or converting non-performing assets into Mudra loans.

"Many banks have said they're not even aware of the government's scheme. Some are refusing to sanction it. Funding is a major issue for us. We could lift ourselves if we get loans in the of `5-`10 lakh range," said a start-up co-founder.

As per the details available with the KSUM, a total of 60 start-up incubators are functioning in the state. Even though the country has 10 startups with more than a billion-dollar valuation, the state can boast none. In January 2019, the state had launched a start-up hub with a 1,000 seat capacity.

KSUM CEO Saji Gopinath said that the government would not let student star-tups down.

"We don't ignore student start-ups even though we give weightage to the professional ones. It's true the funding for the student start-ups wasn't as smooth as for the professional ones. But a positive change is underway and we could see the results within a year as many start-ups are coming into the state. The student start-ups will also get funding based on their performance," he said.