The Millennial generation dreams of running their own business and global network Youth Business International (YBI) is helping them on their way. Vision talks to Lakshmi Venkatesan, CEO of Bharatiya Yuva Shakti Trust and YBI’s Indian member, about why entrepreneurship exists far beyond Silicon Valley
Why is encouraging entrepreneurship such a popular concept now?
Entrepreneurship has been necessary in a lot of developing nations, from Africa to Asia and Latin America, for the simple reason that the job creation capability of the public and private sectors simply doesn’t reach down to rural areas or to the urban poor. Globalisation has had a role, too, where companies and economies grow but jobs don’t necessarily increase – jobless growth – and that is a challenge worldwide.
The ease of starting a business has seesawed in many countries, including India. Across the world, entrepreneurship has not become easier but it has become more imperative. Sometimes a tough environment, as long as it isn’t debilitating, is a spur to an entrepreneur. If you make it too easy for them, they don’t know what it takes to succeed.
Over the last three days I’ve learned a lot about the UAE’s entrepreneurial drive and the effort to build an integrated, holistic ecosystem for Emirati entrepreneurs, including incubators, the right regulatory support and encouraging women into business. I think that is very healthy and there is a lot I can take back to India.
What is the overall goal of Bharatiya Yuva Shakti Trust (BYST)?
BYST has counselled more than 75,000 people since we started in 1992. We have created about 100,000 jobs by supporting 3,600 entrepreneurs, through finance and mentoring. The whole focus is not the number of loans we give to young entrepreneurs, but the number of jobs we create. It’s very easy to create self-employment, but our jobseekers have to become job creators. For every entrepreneur we support they create around 10 to 15 jobs, whereas the average in the country is two.
BYST partners with banks, by signing a Memorandum of Understanding, to provide funding. There is a joint due diligence and evaluation of the entrepreneur by the mentor and the bank manager. Our average loan size is $10,000, but it can range from $3,000 to $50,000. This year we will have provided about 500 loans. At the start we lent $300,000 a year; now we lend $3 to $4m annually and we hope to lend $30m to $40m a year in the next five years.
We need to understand the whole gamut of businesses that can drive the economy, from the woman who wants to start a home enterprise, to young students just leaving education
What makes the BYST and YBI model unique from other startup support systems?
BYST was the first to take and adapt the loan and mentor model established by the UK Prince’s Trust Youth Business organisation.
The end-to-end support system did not exist before in India. When I approached my own mentor, Indian business icon JRD Tata, with the idea he was impressed. He said, “So many people come to us asking for a cheque. But you asked for mentors from the Tata company, you wanted our knowledge rather than our cheque book. That makes me think this is something worth doing.”
At the start we called it guru-ing, because ‘mentor’ wasn’t a well-known word then. The original concept of having one mentor for every entrepreneur meant the entrepreneur would have to travel 20-30km to the closest town. So we created a mobile mentor clinic with four or five mentors to go out one Saturday or a weekday evening and they adopted a bunch of rural entrepreneurs.
The mentors were totally excited. The whole village turned out to welcome them with garlands and drums. It created a ripple effect: the young entrepreneurs were lauded and that inspired other young people, a by-product we didn’t expect.
All our entrepreneurs say it was their mentor who gave them the courage to think beyond paying back the loan and to dare to think big.
How do you encourage mentors to volunteer their time and expertise?
BYST has a network of around 3,000 mentors in six regions of India who donate their time, knowledge and passion. But we approach it as a two-way street. Today, we have mentor chapters where mentors get together to share experiences and at the same time they use it as a platform for their own businesses.
We also provide them with training. They come in as an associate mentor and it takes one year to become a full mentor. We then accredit them through a qualification with City & Guilds institute, London.
What advice would you give to others who want to help young entrepreneurs?
All countries tend to think of entrepreneurship as something very jazzy, something high tech such as IT, biotech or nanotechnology. But that is not what entrepreneurship and job creation is for the rank and file of the country; entrepreneurship – even in the US – is not Silicon Valley. There will always be one, two maybe five per cent of your economy driven by high tech industries, but that is jobless growth.
We need to understand the whole gamut of businesses that can drive the economy, from the woman who wants to start a home enterprise, to young students just leaving education. I would ask others to make sure the ecosystem supports the aspiration of anyone and everyone.