In Conversation with Mr. Dorjay Wangchuk

By S. Krishna Sharma Leh, Mar 31, 2015

Leh :

Mr. Dorjay Wangchuk was born in 1971, in the town of Leh. He completed his Graduation from J&K University in the stream of Business Management & Economics. His zeal to equip himself with Management and Technical education led him to acquire dual post-graduate degrees in Masters in Business Administration & Masters in Computer Applications from the University of Panjab. With his Technical & Management know –how, he began his career as a Project Manager in “The Vision Consultancy” a subsidiary of “The Solution Group”, Washington LLC. With intent to make a change in the Education stream in Ladakh, he joined the Education Department in Leh as a Contract Lecturer, against the post of Planning & Management – DIET Leh.

He also served as the President of All Ladakh Teachers Association from 2003 – 2013. In the year 2007, Mr. Dorje got an opportunity to join the JKEDI team as an Assistant Faculty & is currently playing the role of an Executive Manager – Ladakh division for JKEDI – Leh.

Q. Can you please throw some light on what is JKEDI? What is its primary function & motives?

JKEDI stands for Jammu & Kashmir Entrepreneurship Development Institute. Every year in Ladakh, a bunch of students graduates in the hope of earning their first buck. The economy of Ladakh which is devoid of privatization tends to be heavily dependent on Government jobs. Though Government is doing substantial work in creating job opportunities within the district, it has its limitations. Limited government jobs translate into higher unemployment rates & migrating population. The primary function of JKEDI is to reduce unemployment and generate more jobs by way of enticing people into Entrepreneurship. We provide financial support to deserving candidates in setting up their business establishments, and thereby, sustaining their livelihood

Q. What are the eligibility criteria’s to seek financial assistance from JKEDI?

Eligibility Criteria would boil down to the schemes which a candidate opts for. Broadly the eligibility criteria’s are as follows:

 Educational Qualification: 10+2 or above, hinges on the scheme opted for.

 Age: Above 18 yrs. Age limit cap as per the scheme opted for.

 First Generation Entrepreneur.

 Needs to be a resident of J&K.

 Registered with the DCC as Unemployed.

Q. What are the different schemes offered by JKEDI for the people of Ladakh?

Currently, we have a basket comprising of 3 schemes, which a prospective entrepreneur can choose; based on his/her business plan and acumen.

Seed Capital Fund Scheme:

 An MOU signed with J&K Bank, wherein 35% of the seed funding is allocated by EDI & the rest 65% funding is disbursed by J&K Bank.

 As per this scheme, Graduates are entitled to receive funding of Rs. 3.0 lacs

 Post Graduates are entitled to receive funding of Rs. 5.0 lacs

 Professionally qualified people (Chartered Accountant, Engineers, and Doctors) are entitled to receive funding of Rs. 7.5 lacs

 The Rate of interest on the Loan Component disbursed by J&K Bank is flat 10.75%

Youth Start - Up Loan Scheme (YSLS):

 YSLS is a pilot off- bank credit facility.

 A prospective entrepreneur can avail up to Rs. 4.0 lacs upon furnishing One Government Guarantor.

 Upon furnishing Two Government Guarantors, the prospective entrepreneur can avail a loan amount ranging from Rs. 4.0 lacs to Rs. 8.0 lacs, based on one’s business needs.

 The Rate of interest on the Loan Component disbursed by EDI is flat 6.0%.

National Minorities Development and Finance Corporation (NMDFC):

 NMDFC is a pilot off - bank credit facility primarily for the male beneficiaries of the Low-Income Group.

 A prospective entrepreneur can avail up to Rs. 4.0 lacs upon furnishing One Government Guarantor.

 Upon furnishing Two Government Guarantors, the prospective entrepreneur can avail a loan amount ranging from Rs. 4.0 lacs to Rs. 10.0 lacs, based on one’s business needs.

 The Rate of interest on the Loan Component disbursed by EDI is flat 6.0%.

Q. Can you spell out the process for securing funds from EDI?

For any business opportunity to flourish, needs the support of a constant inflow of funds. Naturally, not all the prospective entrepreneurs possess the luxury to have resources at their disposal to fund their business plans. So the JKEDI steps in and facilitates their dreams. During the entire funding process, the EDI team works hand in hand with the prospective entrepreneur till such a time when the entrepreneur secures the loan. The process is as follows:

 The Candidate fills the application form with his personal & project particulars.

 The prospective entrepreneur attends the EDP – “Entrepreneur Development Program”.

 The 15 days EDP commences with a simulation training program and covers the subjects on Management Training, Marketing, Customer Relationship Management, Training in Accounting and Spirit of Entrepreneurship.

 The frequency of the training is slated every quarter with a batch of 50 – 60 prospective entrepreneurs. The classes are conducted in the local language.

 Upon completion of the training, the prospective entrepreneur can opt for Seed Capital Funding, YSLS Scheme or NMDFC Scheme.

 DPR – 3 copies of Detail Project Report is prepared. (A Bank Appraisal Copy, a JKEDI Copy and a Prospective Entrepreneur Copy). The prospective entrepreneur has to shell out nominal charges towards the DPR. The charges are as applicable:

Upto Project Cost – Rs. 5.0 lacs: Charges of Rs 1500 applicable

Project Cost –Rs. 5.0 lacs – Rs. 15.0 lacs: Charges of Rs 2000 applicable

Project Cost – Rs.15.0 lacs – Rs.25.0 lacs: Charges of Rs 2500 applicable

Project Cost - Above Rs.25.0 lacs: Charges of Rs 3000 applicable

 Upon successful completion of the Bank appraisal, the EDI team prepares a Pre- Sanction Report. A Pre- Sanction Report is a survey report that verifies the Credibility of the Prospective Entrepreneur, the Feasibility of the Project & Risk Mitigation. Post this development, the report is forwarded to the Steering Committee.

 The Steering committee is a high power committee comprising of bankers, governing body and industry leaders, who are the decision makers.

 Once the Steering Committee approves the loan process, the prospective entrepreneur is intimated; who in turn fills the post-approval document and submits the same at the EDI office. The copy is then shared with the bank.

 The bank finally credits the approved loan amount to the prospective entrepreneur ’s local branch account.

Q. A Non-Citizen of J &K, but a localite; can he/ she is eligible to apply for a loan?

These schemes were originally implemented to uplift the people of Ladakh & provide them with a platform to enhance their livelihood within Ladakh. Hence, these schemes are available only to a Citizen of J&K.

Q. What are the industries financed by JKEDI?

JKEDI primarily supports industries which have a scope to sustain & grow. We also factor in the cultural attributes of the Ladakh region. Some of the industries financed by EDI are as follows:

 Agriculture

 Horticulture

 Handicrafts and Handlooms

 Tourism

 Fabrication

 Camping

Q. What is the loan tenure on these schemes?

Average tenure varies from 5 years – 7 years depending on the Moratorium period, which is the time period from when the business rolls out money.

Q. Are some industries preferred over others? Is the collateral required for higher funding?

Primarily, Industries which reflect the culture & tradition of Ladakh are given a priority. Hence, industries which border on Agriculture & Food Processing are preferred. Risk Mitigation is always the priority as a lender. Any financial assistance requirement beyond to the tune of Rs 25 lacs needs collateral.

Q. How much of Fund is allocated to Ladakh from JKEDI? Is JKEDI an autonomous body?

Well, as pointed out before; we do have a preset funding limit for every individual. Nevertheless, there is no cap on budgets allotted for Ladakh. JKEDI is an autonomous body. The Chairman of the JKEDI is the Chief Secretary of the State. Our only goal is to create more effective & efficient entrepreneurs.

Q. What is the NPA on the loan amount disbursed in Ladakh?

The people of Ladakh are excellent paymasters. Currently NPA stands @ 0%.

Q. A lot of people are migrating out of Ladakh for their livelihood due to less government jobs and lack of privatization. What is JKEDI’s strategy to plug this crunch?

Globalization has led to this phenomenon of free movement of people for their livelihood. We can’t curb somebody’s free will. Ladakh’s economy thrives on tourism. We are yet to create an alternate plan to generate revenue within the region. JKEDI wants to offer more employment opportunities in Ladakh in the form of Entrepreneurship. An Entrepreneur can generate more jobs by employing people in his/ her firm. In this way, we can retain more people back in Ladakh.

Q. How many people have been loaned out since the inception of JKEDI in the Ladakh region?

Seed Capital Scheme: Over the last 3 years (2011 – 2014) – 200 prospective entrepreneurs have been provided financial assistance & further 90 are under various stages of processing.

YSLS Off Bank Scheme: Over the last 1 year (2013 – 2014) – 20 prospective entrepreneurs have been provided financial assistance & further 14 are under various stages of processing.

NAMDC Off Bank Scheme: Over the last 2 years (2012 - 2014) – 130 prospective entrepreneurs have been provided financial assistance & further 40 are under various stages of processing.

Q. What is the average loan securing time period?

The average loan securing time period is reliant on various factors. But broadly the time taken to secure a loan is as follows:

YSLS off- Bank Scheme: Within 30 days, including 15 days training period

NMDFC off - Bank Scheme: Within 30 days, including 15 days training period

Seed Capital Scheme: Within 3 months, including 15 days training period

Q. What is the goal of EDI?

The goal and objective of EDI are with missionary and zeal to create as many entrepreneurs as possible thereby reducing the unemployment rates in the state.

Q. How does JKEDI reach out to people of the state, to promote the various schemes?

People of the state are quite conscious of the existence of JKEDI and the substantial work it has committed to, since its inception. Recently JKEDI was awarded “The 2nd best institute for Entrepreneur & Self Employment in India by ASSOCHAM. The institute has so far provided entrepreneurship development training to more than 10,000 candidates and has provided financial and other business support to more than 3,700 entrepreneurs to help them establish their start-ups.

Almost 90 percent of JKEDI sponsored units are running successfully and many of them are in the advanced stage of their business cycle.

Nevertheless, JKEDI reaches out to the people of the state in the following ways:

 Radio Announcements

 Social Media tools

 Guest Lectures

 Job Fairs

 Village Awareness Campaigns

Q. Any special and upcoming schemes for the people of Ladakh?

A few new schemes are in the pipeline which awaits approval from the Government of J&K. The people would get to know soon.

Q. Which is the most active region in Ladakh for fund approvals and allocation?

The fund approvals and allocations are cut across all regions. No region takes priority of preference.

Q. What are the average approval percentages on loans? Do we have any delays? If so, why?

The mission of JKEDI is “To create and nurture an overall enabling environment for the development of entrepreneurship in the state of Jammu and Kashmir”. So it is our earnest attempt to process the loans faster & quicker. If the credentials provided are precise, then the loan is 100% approved. Delays are only bound to occur if the prospective entrepreneur has provided incorrect or incomplete information.

Is there a message would you like to share with the youth of Ladakh?

“Ask not what the J&K government can Offer you”.

“Ask yourselves, what you as an Entrepreneur can Offer the Government of J&K”.

So don’t necessarily depend on government jobs, use the facilities offered by JKEDI, become an entrepreneur and contribute back to the government.