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Monday, 29 July 2013

India: Islamic finance to power Kerala startups

Cheraman Financial Services Ltd, jointly promoted by the Kerala government and non-resident Keralites, is to fund hundreds of cash-strapped student startups coming up in the state.

The financial institution functioning on Islamic principles has set aside Rs150mn for companies in the Startup Village, Kerala’s answer to Silicon Valley, from its Rs2.5bn Alternative Investment Fund that primarily targets the Shariah-compliant service and manufacturing sectors.

There are more than 900 firms – and the number is growing fast - with innovative products started by students waiting to set up their units at India’s first telecom incubator mentored by Infosys co-founder Kris Gopalakrishnan.

“The decision to fund these projects was taken at the recent meeting of our board of directors,” P K Kunhalikutty, state industries minister who is also a director of the company - which recently received Reserve Bank of India (RBI) approval  - said while addressing the Weekend@Startup Village programme here yesterday.

Cheraman, which has also got clearance from the Securities and Exchange Board of India, focuses on new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering.

At least one company of students with innovative ideas is being set up each day at the Startup Village. The Village aims to host 3,000 startups by 2020.

Coming up on the same campus in this port city is the Kerala Technology Innovation Centre, another zone exclusively for bio-technology.

“A new silent revolution is happening in Kerala. Educational institutions are mushrooming and so is a new breed of young and enterprising entrepreneurs,” said the minister who spent a day with youngsters at the Startup Village.

“For these young entrepreneurs, money will not at all be a constraint”.

Chief Minister Oommen Chandy, who delivered his speech via Skype said his government was extending all help to the Startup Village to create a ‘Silicon Valley’ here.
Chandy also announced a funding scheme to regularly send student entrepreneurs to Silicon Valley to gain firsthand experience.

Startup Village chairman Sanjay Vijayakumar said the chief minister used to meet him and his team for 30 to 45 minutes each week to make the project a reality.

Anil Menon, who heads the second global headquarters of Cisco, based in Bangalore, said the world leader in networking has decided to set up a Cisco Lab at the Startup Village to tap its potential. The Lab will start “soon” he added.

Kris Gopalakrishnan disclosed that the 180 startup firms located at Technopark in the state capital Thiruvananthapuram was generating Rs2bn a year and has created 4,500 jobs. The new breed of young entrepreneurs straight from the campuses is making all the difference in Kerala, he added.

“Creating a community of entrepreneurs is much more difficult than building a company. This is going to be a fantastic success, something that’s going to change Kerala,” insisted Gopalakrishnan.

(Gulf Times / 28 July 2013)

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