As part of the new pan-Asian venture debt financing initiative, Singapore based UOB (United Overseas Bank) along with Temasek (a leading state-linked investment firm) will provide venture debt financing worth USD 500 million to start-ups in India, China and Southeast Asia countries.
The main objective of the program is to lend financial strength to high-growth, innovative start-up companies in sectors such as technology, consumer, healthcare and clean technology over the next five years. This will provide the support the start up’s need to scale and succeed.
According to the business consultancy firm Ernst & Young estimates the potential market size for venture debt in Singapore, China and India at $2.2 billion. Venture debt is a type of financing for start-up firms which may not yet have the cash flow or assets to use as collateral for loans. It is an alternative to bank loans or raising capital by selling stocks to investors.
This surely is a welcome move for the budding entrepreneurs in these countries, who have great ideas but limited capital.
Source: Indian Express