21 November 2017

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YEFI: Nurturing Budding Entrepreneurs

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The Commonwealth Secretariat and Central Bank of India - ComSec/CBI announced a joint initiative with a view to exploring innovative ways to help budding young entrepreneurs establish and develop small businesses. Called the ‘Youth Enterprise Finance Initiative’ (YEFI), the endeavor will through a series of capacity building and innovative financing mechanisms help to harness a wide range of skills and encourage young entrepreneurs as well as those seeking employment in up-coming enterprises. Fifty million rupees is being injected into the YEFI.

 The CBI with an annual balance sheet of US$ 50 billion is one of the country’s largest govt. owned commercial banks having 3,200 branches all over India. Its main thrust is on financing the development of MSME’s, besides providing rural enterprises with growth opportunities through innovative financing mechanisms. Speaking on the initiative the Bank’s CMD, Srinivasan Sridhar informed, “The main objective of YEFI is to provide productive employment to young, dynamic small entrepreneurs and help them to be gainfully employed. Under the Com/Sec program, CBI is setting up a five crore facility to finance Micro and Small businesses run by youth, who will be given soft loans at concessional rate of interest. Commonwealth in turn will offer technical expertise and assistance to those entrepreneurs to run sustainable businesses.” Elaborating on the matter, he said “CBI will not only provide loans, but will go even further. It will help to prepare projects, propose backward integration and practically help young entrepreneurs to develop sufficient capacities to be sustainable in the long run. Also help them to get buyers, technology, etc. The punch line here is not only to finance but to build projects,” he added.

Explaining the rationale behind the ComSec/CBI partnership, Sridhar said “There is widespread unemployment and sickness in the industry and no clue to distinguish between the two. ComSec is already in India trying to help small business to be internationally competitive. It has initiated 16 programs in India and since last 5 years experts from different countries of the Commonwealth are helping out too. CBI is associated with Commonwealth since past two years. ComSec has the oldest and largest youth programme globally. With this partnership, we hope to leverage the strengths of a large international youth programme with CBI, one of the largest commercial banks of India. ComSec is already engaged in India, while CBI will go to MSME’s try and understand its characteristics, study and analyze it and find out how it can be scaled up and then make it sustainable in the long run,” he informed.

With a view to getting the ComSec perspective, this correspondent also spoke telephonically to Ram Venuprasad, Adviser (Enterprise Development), Special Advisory Services Division SASD, Commonwealth Secretariat, London. According to Venuprasad “The 'Youth Enterprise Financial Initiative', in summary, aims at providing young entrepreneurs access to affordable finance to develop economic activities. The objective of this ComSec-CBI partnership is to develop a replicable model for economic and social inclusion of youth in enterprise development activities that can be rolled out across the Commonwealth.”

With regard to a query on how the ComSec/CBI initiative will help upcoming entrepreneurs in India, with particular emphasis on women entrepreneurs, Venuprasad replied “Young entrepreneurs in the micro and small enterprise segment, besides being provided access to finance, will be provided with skills and training through capacity building programmes conducted by the Commonwealth Secretariat. The Commonwealth has been a leader in promoting gender equality, the development of women in this instance, and this initiative aims to assist many women owned enterprises – the target being that at least half the young entrepreneurs who will be helped will be women,” he added.

Getting back to CBI/ComSec joint endeavor – YEFI, it is actually the brain child of Sridhar, and this was one of the projects discussed by him with Kamalesh Sharma, Commonwealth Secretary-General when the two had met earlier in London on 17 Nov.2009. After a series of joint meetings at junior levels, it was agreed to try out the program in India on a pilot basis and later have it replicated in other countries of the Commonwealth. Hence to begin with, the initiative is to be launched in four backward regions of India, such as those of Kerala, Orissa, Rajasthan and West Bengal, which have been ear-marked as potential areas of operation.

Replying to a query about the series of programmes to be launched under the joint ComSec/CBI endeavor, giving a Commonwealth perspective Venuprasad replied “Initially this programme will be piloted in India, the reason primarily being that CBI has a massive footprint in India and it would be prudent to pilot such an initiative in India, before it can be replicated overseas; ComSec can use the pilot phase as a learning experience before attempting to replicate this model in the rest of the Commonwealth. There will be a series of consultations in the four areas identified, which will be quickly followed by the training programme for entrepreneurs (capacity building activities) and lending programme (financing activities). There will be rigorous monitoring and evaluation of the process all through as it is hoped that this initiative can be replicated in the rest of the Commonwealth, commencing with Zambia in East Africa, within a 12-month period.”  

With ozone layer in atmosphere depleting and eco- conservation the need of the hour, it is imperative to first raise awareness on green technology. In this connection Sridhar said “Green technology is another area to be touched upon. There is increasing carbon consumption; and the need of the hour is to make consumers carbon neutral. Today major users of carbon are the industries and they need to apply green technology and limit emission. While multi-nationals are well-aware of the dangers of carbon emission and doing all to limit it. Small industries generally lack a sense of responsibility and awareness. Although individually they are small in size, but in totality small enterprises contribute a big chunk to pollution. Therefore, unless we take them along, we cannot make green dream a national phenomenon. Their cumulative efforts can bring about significant energy savings,” surmised Sridhar.

CBI is also providing technical assistance to a new financial institution, the St Lucia Development Bank (SLDB), set-up by the Govt. of St. Lucia, which is a Commonwealth member country. The CBI assistance will enable SLDB develop suitable lending instruments (including YEF), product portfolio, appraise proposals from small businesses and also assist with staff development. As part of this technical assistance, which is fully funded by the CBI, two of its senior staff members will work with SLDB for a total six-week period. Sridhar informed “Our team is training their staff, helping prepare strategy, providing overall assistance maybe not in terms of money, but in kind estimated at US $ 50,000 in technical know-how,” he added.

 
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