Soft and easy

A new entrepreneurship programme for unemployed youth providing soft loans instead of subsidy is being launched to circumvent the cumbersome processes involved in starting enterprises. INAM UL HAQ reports.

The state government is set to launch a new self-employment project, Youth Startup Loan Scheme, to provide “new” opportunities to jobless educated youth. The new scheme will be based on low interest easy loans rather than “free money” in the form of subsidies which allegedly are often misused and not accessible to deserving youth.

To reduce processing delays, the scheme has been devised after the Seed Capital Fund of the much publicised SKEWPY. According to a survey the Seed Capital Fund was found full of bottlenecks and implementation hurdles.

“In the Seed Capital Scheme we faced more procedural delays at banking level and other official levels but new scheme will be directly implemented by EDI (Entrepreneurship Development Institute) so we won’t face such a situation,” said MI Parray, director EDI. “This scheme will be an addition under SKWEPY to create new entrepreneurs. It will run side by side to the previous schemes.”

The chief minister’s ambitious SKEWPY programme was inaugurated in December 2009 to reduce escalating unemployment rate and promote private entrepreneurship in the government-employment-dependent state.

The survey conducted by Mercy Corps, a US-based international development agency working in Kashmir since 2006, found that the candidates applying for the scheme have to face a long and complicated process, full of bureaucratic hurdles. The processing time, which was more than three months, and lack of knowledge among bank officials and other concerned government officials were found main “de-motivating” factors for the unemployed youth opting for the scheme.

The new scheme, recently approved by chief minister in a SKEWPY review meeting, will provide support and credit facility to young entrepreneurs in an easy and expeditious manner.

The scheme will be initially taken as a six-month pilot project covering 200 candidates with equal number from Jammu and Kashmir divisions. After a thorough evaluation of the pilot project by establishing a comprehensive monitoring and evaluation system for the scheme that will collect real-time data and measure implementation progress and performance against pre-defined indicators of success, the scheme will be approved for further continuation.

Youth Startup Loan Scheme instead of providing any subsidy will provide soft loan upto Rs 8 lakh. The loan provided will have six per cent simple interest for the period of five years with the first instalment to be paid after six-months from the date of approval.

“Scheme focuses more on the availability of credit facility to the young startup entrepreneurs at lesser interest rates in the shape of soft loans rather than promising them free money which is, in practice, less accessible to them through the commercial banking system,” Labour and Employment Department, which is supervising the project, has stated in draft guidelines.

Entrepreneurship Development Institute (EDI) in collaboration with Mercy Corps will implement the initial pilot project.

An MoU between EDI and Mercy Corps will be signed to jointly implement the Scheme, to support the overall capacity building of EDI and to make other efforts towards the promotion of entrepreneurship in the state, sources in know of the things said. Mercy Corps will be also entrusted with the detailed evaluation of the pilot scheme, they added.

The curriculum for entrepreneurship development program (EDP), a two week training provided by EDI to built capacities in necessary managerial and technical fields to all selected candidates, will be improved by Mercy Crops.

Usman Rahim Ahmad, Kashmir director of Mercy Corps

“Mercy Corps will devise the new curriculum to improve the quality of training modeled according to latest technology and local market opportunities,” said Usman Rahim Ahmad, Kashmir director of Mercy Corps. “We will help the entrepreneurs in preparing better business models with less risk involvement.”

Mercy Corps will also identify and mobilize potential young entrepreneurs, by conducting counseling sessions and workshops at different colleges and universities, who will benefit from the scheme.

Unemployed youth interested in applying for the scheme must be registered at District Employment and Counseling Center. The scheme will be available only to new entrants who have not benefited from any earlier scheme and anyone already having a unit won’t be eligible for the scheme.

However, a successful entrepreneur, who will be identified as High Impact Youth Entrepreneur in Youth Startup Loan Scheme can also benefit from Seed Capital Fund Scheme as phase-II to upscale his business unit.

Entrepreneurs are free to take up any environmental friendly activity in primary or secondary sectors however, horticulture, IT, tourism, food processing and handicrafts units linked with local resources will be given priority.


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