With the growing population in India, the number of unemployed youths is also rising. The Jammu & Kashmir Entrepreneurship Development Institute (JKEDI) is focusing on solving the unemployment issue in the state by financing the youth in setting up their own enterprises with easy loan system. Relying on Government job has become an old-fashioned now because it has its limitation.
JKEDI creates an environment of entrepreneurship development in the state by motivating and driving the youths towards creating and building job opportunities.
To discuss the various Schemes, we have Dorjay Wangchuk, Executive Manager personal and administration Ladakh Division in JKEDI, Leh in this issue.
After completing his studies he worked in Vision Consultancy an organisation based in Chandigarh till 2002. In 2002, he joined as a teacher in Education Department, Leh and served till 2008. From 2009, he worked as a lecturer in computer science till 2013. And in the year2007, he joined JKEDI as an Assistant Faculty on deputation from Education Department and at present, he is working as an Executive Manager personal and administration Ladakh Division, JKEDI, Leh.
Q. Brief us about JKEDI, how and when it started in Leh?
Jammu and Kashmir Entrepreneurship Development Institute was started as a society of J&K in 2003. It was basically started by Indian Institute of Personal Administration. There are three regional offices in J&K state each in the Jammu, Kashmir and Leh. The main aim of JKEDI is to provide entrepreneurial skills to the youth of J&K for sustainable livelihood and facilitate access to finance and support services.
The office in Leh is the regional office for both Leh and Kargil district and was started on August 25, 2007.
Prior to the formation of JKEDI in Ladakh, a project, Ladakh Enterprising Support Agency (LESA) was in function under Hill Council, Leh. The aims and objectives of both the project were same and later JKEDI was formed after taking over the LESA.
Q. What are the aims and objectives of JKEDI?
JKEDI aims to eradicate unemployment in the state by encouraging youth to take entrepreneurship as a career option. It aims to motivate, train and uplift the unemployed youths to start their own business venture and earn a livelihood.
Today, each and every educated youth cannot get a Government job. We strive to improve the skills of candidates by setting up their own business venture and thereby providing job opportunities to many others. This can help to reduce the growing unemployment issue in the region. We provide financial support to the aspiring first-generation young entrepreneur as per their qualifications in setting up their business establishments.
We are trying to create an environment for the entrepreneurship development in the region.
Q. How many schemes are there under JKEDI and who are the implementing agencies under these schemes?
At present, there are three schemes running under JKEDI.
• Seed Capital Fund Scheme, (SCFS)
• Youth Startup Loan (YSLS) and
These schemes run mainly under three stakeholders which include JKEDI, Labour and Employment Department and J&K Bank.
Q. Tell us about the funding pattern, rates of interest and repayment system in different schemes of JKEDI.
The funding patterns under the schemes, Seed Capital, Youth Startup Loan and Himayat are different. The funds are made available as per qualification of the candidate, whereas, the repayment system and rates of interest are same.
In Seed Capital Fund Scheme, out of the total project cost, JKEDI contributes 35 percent with maximum capital depending upon the qualification of the aspiring entrepreneur. The money is non-refundable while 65 percent is a loan component from the bank.
The project aims to generate sustainable livelihood opportunities through self-employment for the youth of Jammu and Kashmir by the cross-cutting approaches of:
Seed Capital Fund Scheme:
• Seed Capital: 35% provided by JKEDI as non-refundable seed capital.
• Bank Finance: 65% provided by J&K bank on concessional interest rates.
• No Guarantee, no mortgage.
• Moratorium: Up to 2 years, depending on the nature of the enterprise.
• Repayment: To be repaid in monthly installments within 5-7 years.
• Minimum 10 2
• First generation entrepreneur
• Age 18-40 (18-42 for the specially abled)
• Unemployed youth registered with District Employment and Counselling Centres.
35% seed capital component up to a maximum of:
• â‚¹ 4 Lakh for 10 2/undergraduates
• â‚¹5 Lakh for graduates
• â‚¹6.50 Lakh for postgraduates
• â‚¹10 Lakh for professional & technical graduates
The funding pattern under this scheme is newly revised this year, the funds have been enhanced from â‚¹7 to 10 Lakh and have been also demarcated as per the qualification of the applicant.
Youth Start-Up Loan:
It is the scheme with no connection with the bank. The credit is directly disbursed by JKEDI soon after the completion of DPRs and Pre-sanction survey carried out by the department. This scheme has also been revised and the funds have enhanced as per the qualification of the aspiring candidates. Earlier, it was only up to â‚¹8 Lakh and many businesses have been set up under this scheme in Leh district.
• 10 2
• 18 to 40 ages (18-42 for the specially able person)
• Permanent resident of the State
• First Generation Entrepreneur
• Margin Money 10% of the project cost
• 90% of loan component funded by JKEDI directly
• The rate of Interest 6% simple interest per year
• Repayment mode 20 Equal Quarterly (Every 3 months) Installments (EQIs)
• Moratorium 6 months
• Repayment period 5 years & 6 months (22 Installments)
• Security Third party guarantee of Govt. employees with at least 7 years of service.
The scheme is a component of Sher-e-Kashmir Employment & Welfare Programme for Youth (SKEWPY)
• â‚¹ 12 Lakh for 10 2
• â‚¹ 15 Lakh for graduates
• â‚¹ 18 Lakh for postgraduates
• â‚¹ 20 Lakh for professional & technical graduates.
It focuses to uplift the underprivileged below poverty youths of J&K. Himayat comes under (NMDFC) National Minorities Development and Finance Corporation and the funds come from Ministry of Minorities Affairs. It is a bank credit facility primarily for the male beneficiaries of the Low-Income Group, having BPL ration card.
• 8th pass & above
• Age 18-35 years
• Gender: Males
• Maximum family income: â‚¹ 98,000 per year for Rural Areas, â‚¹1, 20,000 per year for Urban Areas till â‚¹10 Lakh at 6% interest rate.
• The maximum amount of finance up to â‚¹ 30 Lakh
• Margin Money 5% of the project cost
• The rate of interest 6% simple interest per year
• Repayment system, Equal Quarterly Installments (EQIs) in the period of 5 years and 6 months (22 installments)
• Security Third party guarantee of 1 or 2 govt. employees & 20 post-dated cheques.
• Business activities promoted Retail shops, restaurants manufacturing sauces, Jams & Pickles, Poultry, Sheep farming, Handicrafts, Automobile workshops, etc.
Under this scheme, we also refinance with â‚¹5Lakh additional to enhance the already set up business.
However, there is also an education loan under NMDFC, but till today no one has applied for the same.
Q. What are the processes to take a loan from JKEDI?
We advertise the notice before starting the batch and the interested candidates fill the application form. After meeting a number of candidates for one batch we call them up for an interview. After which the candidates are calling for the Entrepreneurship Development Programme training for 3 weeks.
The EDP covers marketing, business management, a spirit of entrepreneurship, customer relationship management and much more. During the training programme, the applicant has to fill the DPR form with their project name and we prepare the DPR of the project. According to the project the entrepreneur can opt for Seed Capital Funding, YSLS or NMDFC scheme. On the basis of the DPR, the bank makes an appraisal, they will check the project, cost, viability etc.
After bank appraisal, the EDI team conducts the Pre-sanction survey in which the team checks the credibility of the entrepreneur, feasibility and viability of the project and risk management. The report is then forwarded to the Steering Committee. They are high power committee comprises bankers, governing body and industry leaders, who are the decision makers. Once the Steering Committee approves the loan process, the prospective entrepreneur is intimated; who in turn fills the post-approval document and submits the same at the EDI office. We give applicants a sanction letter, they have to sign a bond and then the copy is sent to the bank. Upon the completion of the process, the bank finally credits the approved loan amount to the prospective entrepreneur's local branch account.
We have a minimal charge for the DPR according to the cost of the project. The charges are:
Project Cost in â‚¹
Charges in â‚¹
â‚¹5 to â‚¹15 Lakh
â‚¹15 to â‚¹25 Lakh
Above â‚¹ 25 Lakh
From last month, JKEDI has come up with a new initiative of phase second in the seed capital fund scheme. This is when the applicant completes their repayment of the loan (which is the first phase) after five years; if the same applicant wants to diversify or upgrade their business they can take the second phase benefit of the project. It mainly aims to help the entrepreneur grow their business. This will be applicable only to the fresh loan applicants and the one with pending cases. All who have already taken the loans cannot take this benefit.
Q. Is it compulsory to attend the 21 days EDP training?
When the applicant applies for JKEDI loan it is mandatory to join 3-week simulation-based and multimedia supported experiential training program EDP supplemented by field visits, sector-specific and expert sessions. It is a programme designed to help an individual in strengthening the entrepreneurial motive and build capabilities which are necessary for playing his entrepreneurial role effectively. The candidates will know about the scopes and exposure of their business plan. It is compulsory to join the training.
Q. How do you keep a check on the design project prepared by the applicants? What are the check and measures procedure you have in the department?
In JKEDI, we have online monitor system through which we can trace how many funds have disbursed, pendency, return and etc. and in J&K Bank they keep the records and run process through online portal Sher-e-Kashmir Employment Welfare Programme for Youth (SKEWPY).
In the past, many projects were returned back from the bank as sometimes even if there is a small mistake in the process, the bank used to reject it. That’s one of the reasons that we have many rejection cases and takes a longer time to get the benefit. But now, the bank cannot return the case until and unless they get NOC from JKEDI.
When the particular business bans or stops for some reason in the district the candidates have to change their business. For example, this year district administration put a ban on the permit of taxi and bikes, but we have some cases in the bank. In such case, the bank returns the case and we ask the candidates to change the project for reprocessing.
So, during the entire funding process, the EDI team works hand in hand with the prospective entrepreneur till secures with the loan.
Q. What are the challenges in the process of the loan in JKEDI?
The challenges that we face is that during the pre-sanction survey many candidates don’t have a location to show which is very important to process the case. Secondly, after the case process, many want to change the project. We have to reprocess the case again which takes a long time to complete which affect the process of the case. Some candidates even after the case is processed are not interested. There are also several cases which after processing the problem related to the name of landholders etc are seen.
Meanwhile, there are few people who keep the subsidy part of the loan and misuse the benefit of the scheme. In such case, the motive and objective of the department get neglected. Although we keep a check on it there are such cases.
Q. How many units are running in Leh district under the schemes of JKEDI? How many successful entrepreneurs are there? In a year, how many young entrepreneurs are trained?
Presently, there are 330 units running under different schemes of JKEDI in Ladakh. Under Seed Capital Fund Scheme, 170 units are running, 40 units in YSLS, 120 under NMDFC. There are many successful entrepreneurs who run their businesses in Ladakh under JKEDI, to name few are Modern Diagnostic Centre, Leh run by Tsultim Dorjey and Maneesha Badwal a doctor couple, Dechen Yangdol who runs her business in the name of Chenz Décor, Stanzin Minglak and Sonam Angmo runs a joint venture called Lena Ladakh, Motup Namgyal runs Digital Printing house, Leh, De’ Kanis Kreation by Kanis Fatima and many more.
In a year, we trained between 120-200 candidates approx for funding. Three batches with 50 to 60 candidates in each batch are trained.
Q. How the youths are taking benefit of JKEDI? What are the challenges and drawback in the youth of Leh district?
The main drawback is that everyone is following the same business that is tourism due to nature of easy money. There are other avenues and scopes which need to be explored by the youths, they can go for manufacturing, food processing and much more.
We expect them to go into agro-based, floriculture, and horticulture sectors. If everyone looks for one sector, it can be dangerous for the society and sustainability also. The tourism sector is not sustainable and has several threats. They should go for other potential sectors too.
The most important thing or drawback in the youths of Ladakh is that they lack perseverance. To become a successful entrepreneur they need to work hard and have perseverance which is not there in them.
Another challenge is that the entrepreneur after getting the loan, fail to get an ideal location for the enterprise. The rent of the shops is steep at the planned locations which affect their business.
Q. Many youths are facing the problems in process of loans what are the reason and how the department intervene to solve it?
Since thousands of candidates from all over the district of Jammu & Kashmir apply for the JKEDI loan and the appraisal of the bank is done at an only single location in the state it takes long to get complete. In addition, there are only a few personnel who are handling the work in J&K Bank, so they have to do the appraisal of thousands of candidates at the same time. Sometimes it takes a long time to complete the DPRs also. However, it also depends on the paperwork which the candidates fail to complete or the titles of the project are not clear etc.
Initially, after the formation of JKEDI, there were fewer numbers of applicants, we could hardly train 30 numbers of candidates in a year. Today we are training 150-200 candidates in a year. So it is obvious that it takes time for the processes for so much of candidates from the state but it is for sure, sooner or later they will get the loan accordingly.
Meanwhile, we have got the fastest disbursal within 30 days to the candidate under Seed capital Fund Scheme, and under YSLS a loan was provided within 19 days.
We have an online monitor system through which we can trace how many cases have disbursed, pendency, return and etc. In the process of DPRs, appraisal and till the loans is sanctioned department stick with the bank and the candidates through phones and emails.
Q. Tell us about the awareness programmes carried out to reach out the society and youths in particular about the benefit?
Awareness programmes are carried out every time in the district among the unemployed youths. This year we conducted an awareness camp in collaboration with Employment Department, Leh in Khaltse sub-division where more than 400 youths participated, a mega job fair was also conducted among 400 youths of the district in Leh.
On June 29 we are again going to conduct a mega awareness programme and expecting more youths.
Q. There are few cases in which youths who applied for the loans are still in pending for years. What are the reasons behind it?
Yes, there have been few pending cases. The reason is that it gets stuck at the appraisal of the bank. If there is a problem in viability and feasibility of the project, it gets rejected from the bank. However, till the completion, there are many paper works which the candidates need to complete such as bringing NOC from various concerned department. When they fail to bring these things it is obvious that their cases remain pending. Presently, we have 30 such cases in the district.
Q. What type of business are you focusing the youths to take upon?
The new entrepreneur should diversify their business plan and explore sectors which are sustainable such as agri-agro based, handmade garments, fibre sector etc.
We are focusing on developing rural entrepreneurs to set up their enterprises in a village. This will help in minimizing the migration burden in the city. I am focusing on the entrepreneur who works on adding values to the land-based production and the income earned will not only benefits the entrepreneur but the whole village.
Q. In our society people focus more on getting a govt. job. How important do you think is to look for entrepreneurship development and start-up business?
Unlike past, the government job is not preferred much by the youths as well as the parents. There are many parents who along with their children come to the JKEDI institute to learn about the schemes. They are more focused on setting up their own enterprises.
When the JKEDI was first started in Ladakh, people had a very different thinking while acquiring the loan but it’s not the same any more people are very friendly towards the same.
Entrepreneurship development is one of the most important aspects. Today, the reason for most of the developed countries is that they don’t rely on government jobs, they create their own job for themselves and others.
Q. What would you advise the youths to take the benefit of these schemes?
JKEDI offers schemes that are beneficial for the youths to be an entrepreneur. It is a single window system where we are trying our best to provide the benefit to the maximum youths in Ladakh. I believe that rather than waiting to get government jobs it’s always better to avail the benefits provided by JKEDI and be an entrepreneur.
I have seen that till today maximum candidates come to JKEDI only after losing all the hopes and expectation from the government job. It always better to start a business at the young age so that even if the business runs in the loss three or four times, they can easily stand up for sure.
Message to the readers
“There are four challenges in life, Education, Employment, Employability and Entrepreneur. These four are interconnected when education is acquired people look for employment but due to skill gap, people couldn’t get the job. I expect people to own their skill and work on it through entrepreneurship development so that it can solve the unemployment problem of many others in the society. These 4Es will be the future challenge and we have to solve it now.”