J&K’s Entrepreneurship Development Institute had emerged an incubator where boys and girls were taught and encouraged to become employers rather than employees. With perhaps the highest known success rate in new enterprises, Tilangana and Kabul were keen to copy its DNA. In last eight months, it survived two protracted gun-battles that devastated its two buildings. Dr Mohammad Ismail Parray, its Director, who started it from one room, tells Kashmir Post that enterprises in Kashmir need much more beyond resources, motivation, and the market
Dr M I PARRAY: We had some training programmes when the situation deteriorated. For last more than three months, candidates are not able to reach the EDI because of the disturbances. When the main administrative complex was destroyed, we shifted to the hostel building and when it was destroyed in another encounter, we started operating from the guest house that has 13 rooms and a hall. But we are waiting for the situation to improve. Within one week of the improvement we will have four training halls in the main building ready. They are almost ready. By January we will have our main administrative building restored. We are already midway.
KP: You had your main building destroyed in one encounter in February and another major one in October 2016. How do you manage your operations now?
KP: Two encounters in eight months. Do not you think, it was a security lapse?
MIP: As far as I know the security forces were alert and alive that militants were trying to attack some government building. People from army, CRPF and police would routinely visit the EDI for the last few months.
As far as attacking EDI goes, I think, it might be because the militants wanted to engage the security forces for a long time and create international news.
But the real response to this question should ideally come from the security forces. I see things from a victim’s point of view.
KP: Are there security measures under way. How you see EDI facing the infrastructural issues within next financial year?
MIP: There has been some exercise on the security front already. That is being taken care of by the police at their own level but we have improved systems which are in our control.
On infrastructure front, the EDI will resume its operations from its main administrative building after two months. That will take care of our teaching requirements. In fact the classrooms are ready. As for as our hostel facility is concerned, we are right now in the process of assessing the damages. We have experts working on it. If they tell us the structure has survived the devastation, the building will be restored by April. God forbid, if they tell us the building structures cannot sustain and needs demolition, then it will take two years. I hope it is strong enough to have survived the quantum of explosives that were used in the operation.
KP: Twice in this year, it raged a debate that the EDI infrastructure is so strong that it survived major blasting. Is there any special system that is at play when you construct?
MIP: There is no special reason for it. And I do not believe that only EDI buildings are strong. All buildings must be equally strong.
But I will tell you one thing. We are rigorous in evaluating tenders and slightly more particular in ensuring that whatever is on paper is actually on ground. The engineers who work with us get absolutely freedom in ensuring the constructions are better. May be that is what makes our infrastructure better.
KP: You headed this institution from one room to such a vast premises. How different has been this experience for a teacher?
MIP: Honestly speaking, I have not done anything extra. I did what I was tasked to and for that I was given the resources. Yes, one thing makes it slightly different is that I had passion for doing all this. This is no individual success, I remind you. To keep on record, all government’s supported the institution and I do not ever remember the name of any officer who might not have been helpful. If EDI is success, it goes to the credit of the government and the policy makers who made it happen. It is a huge collective effort.
MIP: I do not see it as a contribution. I see it as output because there has been lot of input in EDI. We have been implementing various schemes. If we see the output cumulatively, it should be around 8317 enterprises which include slightly more than 1000 of 2016 alone.
If we rate the output and take a third party study, then EDI has 85-90% success rate. That means the entrepreneurs we worked with, 90% have survived. This makes perhaps one of the highest success rates in the world. There are studies suggesting that start-ups with 20 employees have 37% chances of surviving in a four year period. Start-ups worldwide have massive attrition rates but thank God, it is not the case in J&K. Part of the reason could be the entrepreneurs themselves who are so keen that they must succeed. Secondarily, we have an institutional mechanism within the EDI under which we ensure that the hand holding of the individual entrepreneurs must be there even after they get into work. In most of the cases we are always in touch with the entrepreneurs even after they are firmly on ground. That helps us to stay in touch and ensure the sailing is as smooth as situation permits.
KP: What is the amount that you have advanced so far?
MIP: We have been implementing various schemes. Under Seed Capital Fund Scheme that is in vogue since 2010-11, the amount we give is non-refundable. In that scheme, the loan component is being managed by the J&K Bank against adequate securities. J&K Bank is the debt syndicator for this scheme. Under this scheme, we have given Rs 176.74 crore to enable entrepreneurs to become bankable and together with the loan and their own minimum contribution, 4499 enterprises are in place.
In Youth Start Up Scheme, we offer soft loans and the beneficiaries return it in instalments. It is the only loan that works on simple interest. The net outgo in this scheme is 56.34 crore which is exact amount that we are supposed to get back to the state coffers. It is with 1044 enterprises.
The third is offering credit under a scheme that NMDFC funds. They give us funds for particular enterprises to a particular class and at an interest. We deploy the same in the market and ensure the beneficiary return the same. Under this scheme the disbursal of loan – both NMDFC and the state government share – is Rs 83.48 crore and it has gone to 2774 small enterprises.
Cumulatively, we have advanced a sum of Rs 149.82 crores to the market. It excludes Rs 176.74 crore that we have given under Seed Capital Fund Scheme (SCFS) which is non-refundable. The beauty of our lending, obviously not for commercial reasons, is that we have the least bad loans. Right now our so called nonperforming assets are below four percent which makes EDI perhaps the best in the ladder. This is despite the fact that we are neither a bank nor a non-banking company. We are a government institution that is managing the resource for the youth who deserve it.
KP: Since EDI works at district levels. What are the reasons that enterprises outside Kashmir perform better?
MIP: You are seeing the situation from a completely different angle.
The first thing is that when we were talking of entrepreneurship, generally it was being taken a talk about TATA and Birla. Working outside the government has historically remained a taboo. It took us some time to take the narrative to the reasonable level and we created success stories at the district levels and made entrepreneurship a socially more acceptable phenomenon. They became the role models of the new lot.
I believe every entrepreneur has stakes in the success of his enterprises and that goes beyond the regions and markets. But you will see slightly lesser success in Kashmir because it is linked to lot of things. In 2014, floods decimated lot many enterprises. We were planning commissioning an award in 2014 for the best performing units. Then floods came and some of the best success had gone down the Jhelum. We did not change the awardees. We stopped the award thinking that they will feel discouraged. Most of them have bounced back. Now in 2016, you have not worked for nearly four months now. It costs all businesses but the start-ups face the worst. To be honest, we do not ask them to pay the instalments because we know they have not worked at all. These are some of the factors that impact the outcome of individuals and institutions in Kashmir.