Getting the Best of Byst

BYST has been funding and mentoring struggling startups to stardom. Can you benefit from it, too?

By Shobha Mathur

The Bharatiya Yuva Shakti Trust (BYST) has a feather in its cap. About 10 percent (or 170) of its entrepreneurs are a happy lot, having crossed the Rs. 10 lakh per annum turnover mark from humble beginnings. Some have even crossed the annual Rs. 1 crore revenue milestone.

The common binding thread for these entrepreneurs has been their clear roadmap for the future, meticulous planning, and the refusal to be bogged down. Coupled with the urge to succeed was the aid extended by BYST, a non-governmental organization, in the form of loans, mentoring and training.

• Services versus manufacturing: The services sector has provided a cushioning effect to startups, owing to lower investments for infrastructure vis-à-vis manufacturing.

A wide range of businesses is open to budding entrepreneurs, ranging from AutoCad designs, repair/maintenance of computer systems and automotive services to manufacturing corrugated boxes for packaging pharma products, industrial diamond tools and food processing.

• Shortage of incubation centers: Lakshmi V. Venkatesan, Founder, Trustee and Executive Vice President of BYST, deplores the shortage of incubation centers.

“An adequate number of incubation centers can be set up only through a public-private partnership (PPP). Under the PPP model, incubation centers would be housed within government premises to economize on high commercial rentals for space,” she says.

• Screening for eligibles: Beneficiaries of BYST are normally strapped for funds and belong to the low-income bracket. Ranging between 18 and 35 years of age, they are functionally literate. A 12-member screening committee of mentors at BYST scrutinizes the entrepreneur’s knowledge of the proposed business venture and accordingly recommends him for a loan.

• Outreach program: To identify potential entrepreneurs, BYST has tied up with vocational institutes, industrial training institutes and NGOs working with youth in states where BYST is operational.

• Advancing loans: Till 2007, BYST was advancing loans of Rs. 50,000 from its internal resources. The loan is extended without security and collaterals with 3 percent or Rs. 10,000 of the amount, whichever is maximum, repayable within three years. A subsequent tie-up with the Bank of Baroda and Indian Bank has pared up the loan size to an average of Rs. 4 lakh with a maximum cap of Rs. 50 lakh.

“From a lending of Rs. 1 crore a couple of years ago, BYST’s loan portfolio has reached Rs. 15 crore,” says Venkatesan. But she estimates that the country requires loan disbursements of Rs. 150 crore.

BYST Growth Fund (BGF): The fund, set up in collaboration with the International Finance Corporation, identifies entrepreneurs who have crossed the threshold of a successful venture, but cannot access formal finance. The fund requirement could be anywhere between Rs. 4 lakh to Rs. 1 crore. The Growth Fund will help entrepreneurs set up companies, provide accounting, tax-related, banking and auditing services.

Mentoring avenues: Over 3,000 volunteer mentors—drawn from small and medium businesses, corporates and banks—handhold the startups on a one-to-one basis for the initial two years.

Mobile Mentor Clinics: Since 1994, BYST has been mentoring the rural youth through mobile mentor clinics. A group of six mentors from varied backgrounds travels once a month to village clusters, benefiting about six entrepreneurs per day.

Employment Generation: BYST’s target is to generate 30,000 jobs by 2013.

Tags:
BYST, mentoring