J&K Bank to act as partner-financier of seed fund scheme

In a significant development, Jammu & Kashmir Bank has adopted the seed capital fund scheme of the state government for providing hassle-free finance to unemployed educated youth in the state.

In this regard, the bank, in its board meeting held on August 30, has in-principle agreed to act as a partner-financier to the newly formulated scheme launched by the state government under the "Sher-e-Kashmir Employment and Welfare Programme for the Youth (SKEWPY)", the bank's Acting Chairman, Sudhanshu Pandey, said.

He said, "The bank, as a matter of fact, has always been at the forefront of all the initiatives that encourage entrepreneurship and seeks to empower the people of the state."

"To encourage our educated and dynamic youth to take up entrepreneurship as a career wherein they can employ many others, besides making personal fortunes, we are soon going to launch this scheme," he added.

Pandey said the scheme primarily aims to create sound infrastructure for entrepreneurship development through sensitisation, training and consultancy in the state, which is beset by serious problems of unemployment, as well as under-employment.

However, it is for the first time that the state government has created an 'Entrepreneurship Development Fund (EDF)' to address the issues of first-generation entrepreneurs regarding "margin contribution" and "higher risk perceptions in the ventures undertaken", he said.

He said to enable prospective entrepreneurs to kick start their ventures and projects and make them bankable, the J&K Entrepreneurship Development Institute (EDI) will provide non -refundable seed capital/money, equivalent to 35 per cent of the project cost from the newly created EDF.

The loan component, which has been restricted to 65%, shall be provided by J&K Bank after requisite examination of the financial aspects of Detailed Project Reports (DPR), Pandey said.

He said, nevertheless, the EDI shall assist in formulating and implementing the state government's policies for entrepreneurship development and skill building programmes.

Some of the distinguishing features of the scheme, Pandey said, are fast-track project clearances, a moratorium of two years and flexible repayment of loan in 5-8 years. One of the outstanding features of the scheme is that the borrower shall not be asked to provide collateral or any other tangible security like mortgage of immovable property, he said.

He said all these loans shall be covered under the Credit Guarantee Fund Scheme (CGFS).