Pushpa(33), a native of Sikander Nagar of Nalgonda District, A.P, could study only upto the fifth standard. After marriage she settled down in Hyderabad, with her husband who worked as a miller in an engineering workshop.

Working with Shree Laxmi Chakkodi Company, Pushpa gained experience in snacks preparation. She started her own chakkodi (a snack) making business five years back with an investment of Rs. 15,000. The Bhartiya Yuva Shakti Trust (BYST), extended a loan of Rs. 25,000 and also provided guidance through a mentor. Today, Pushpa's own enterprise, Shree Swapna Industries, does a flourishing business of snacks (turnover 2008-09 in Rs.85 lakh) and employs around 40. She has repaid the loans, her business is debt-free, generates decent profits and also provides for expansion. She has been able to equip her business with her own space and also with needed machinery and other gadgets. Her mentor has helped her on the quality of packaging, marketing and brand building. Today her products are sold in a number of petrol stations and the products have earned a name for quality. Now Pushpa dreams to set up a fully mechanized food processing unit to produce and branded products market across the nation.

Over 2000 entrepreneurs assisted by BYST

Pushpa's is one of several hundred success stories of nurturing entrepreneurship through financial assistance, technical support and mentoring. Lakshmi Venkatesan - Managing Trustee, BYST, the soul and spirit behind the trust that works closely with CII, said: "the trust focuses on development of entrepreneurship: on young people in the age group: 18-35. It helps in training them to set up a business, keeps track of progress and provides guidance for growth. The focus is to create a sustainable business providing access to capital and guidance."

Soon after the nationalisation of 14 major banks in 1969, there was euphoria over the small scale sector accorded priority in terms of lending and interest rates. This continued for some two decades. Venkatesan pointed to a reduction in bank lending to the small scale sector in the 1990s: "they were content to place their funds in government bonds. Bank lending to small sector declined and further dried up through 2003. The credit guarantee scheme introduced in 2004, provided guarantees upto 75 per cent of credit extended to the small scale sector; but there was little progress until 2006; risk aversion of banks to lend to small scale sector continued," said Venkatesan.

Funding from Rs.50,000 to Rs.10 lakh

Venkatesan pointed to the success of such a trust in the UK headed by the Prince of Wales. Modelled on this, the BYST was formed with J R D Tata, H P Nanda, Mantosh Sondhi and Lakshmi Venkatesan as trustees with the objective of providing venture capital and mentoring. The focus was to identify potential entrepreneurs from rural and urban areas and groom them into successful businessmen and women. Lending arrangements were tied up with the Indian Overseas Bank in the South and Bank of Baroda in the West to leverage the modest resources of the entrepreneurs. Assistance extended ranged from Rs.50,000 to Rs.10 lakh. Banks, shy to lend to new entrepreneurs in the small sector, were more confident of the scanning and evaluation done by BYST.

Venkatesan claimed the success rate of BYST at 95 per cent:"the selection of the entrepreneur is jointly done by the banks and BYST. We partner with the enterprise, provide finance and mentoring. There are several instances where a loan of Rs.50,000 provided by us has nurtured enterprises which have recorded a turnover of even Rs.25 crore and more, providing employment in their hundreds," said the BYST trustee.

A BYST growth fund, patterned on the venture capital fund of Silicon Valley, is being planned. The fund plans to provide equity stake in an enterprise. The International Finance Corporation has contributed 0.5 million dollars BYST has raised another million dollars from SIDBI; other high net worth individuals like Anji Reddy, Gopal Srinivasan and Kris Gopalakrishnan, have pitched in with their own contributions. The corpus has increased to around $3 million and is slated stated to increase further to $5 million, said Venkatesan.

BYST has so far created around 2000 entrepreneurs who have raised around 25,000 jobs.

VC - high growth business

Venkatesan, daughter of former President R. Venkataraman, has the genes of the father of industrialisation of Tamil Nadu, in a rich measure. She believe that money is not a constraint. She quotes father: "banks that do not lend, soon become bankrupt." BYST's partnership with banks provides access to capital in increasing measure: "venture capital is a fast, high growth business. There is potential for achieving big multiples as in the IT sector. On the pattern of Mom and Pop stores in the US, small businesses can mushroom in India also; but like in the US, these should be supported and nurtured by banks. The credit guarantee scheme of banks must be administered efficiently with increased cover. Like Kisan Credit Cards, there should be cash credit cards for small businesses," said Venkatesan.

Venkatesan bristles with several interesting concepts: "small businesses should have access to right credit at the right time at the right rate. Support must be provided at the time most needed.

"We should introduce structured-charges: in the first year the loan can be free of interest, in the second year modest rates can be charged and in the third year market rates can be charged.

"We should provide time-bound incentives and not size-bound. A participatory system on sharing profits and a royalty of even 2 per cent will also help the venture capital fund to have a vested interest in the growth of the assisted unit. Likewise the tax system can also be linked to the growth of business with the liberal incentives in the initial stages and fuller rates when the business grows…"

Let a thousand BYSTs' bloom.