The Kudumbashree Story

Women Empowerment

Mission’s Programme for Enterprise Promotion

Kudumbashree defines micro enterprises based on the following four parameters.

  1. Investment ranging from Rs 5,000 to Rs 2.5 lakhs
  2. Enterprise should have a potential to generate at least Rs 1,500 per member per month either by way of wage or profit or both together.
  3. Enterprise fully owned, managed and operated by members themselves, preferably, women below poverty line families as entrepreneurs.
  4. Minimums turnover of Rs 1 lakh to Rs 5 lakhs (ie., 2-10 times of the capital investment).

Kudumbashree strategy in promoting micro enterprises offers flexibility in the type and group composition. The following are the important types.

  • Individual entrepreneurs
  • Group enterprises consisting of five members, ten members, or between five and ten members as per the requirements of the activity
  • Groups consisting of women only
  • Groups consisting of men only
  • Mixed groups

Micro Enterprise Schemes

  • Rural Micro Enterprises (RME): RME has been the first scheme that Kudumbashree Mission took up for promoting micro enterprises in rural areas. Started in 2002-03, the RME scheme covers women in the age group of 18 to 55 years. He scheme does not insist on any educational qualification for women. A micro enterprises group is given a subsidy of Rs. 10000 per member or 50% of total project cost whichever is less. The number of members in this group is 5 -10. Individual units have investment up to Rs. 50,000; Kudumbashree provides subsidy of Rs. 7500 per member or 30% of the total project cost whichever is less.
  • Yuvashree (50K): Yuvashree, a scheme announced in the State budget of 2004-05, offers employment opportunity to educated youth. Individual enterprises are given Rs. 7500 as subsidy or one-third of the total project cost whichever is less. Group enterprises are given a subsidy of Rs. 10000 per member or 50% of the total project cost whichever is less. Individuals and groups are encouraged to come up with business ideas and start enterprises to which Kudumbashree Mission provide support.

A comparison of RME and Yuvashree

Particulars

RME

Yuvashree

Individual enterprises

Yes

Yes

Group enterprises

Yes

Yes

Educational qualifications

NA

Up to Std X

Age

18-55 years

Up to 35 years

Subsidy - Individual

30% limited to Rs 7500

30% limited to Rs 7500

Subsidy - Group

50% limited to Rs 10000 per member

50% limited to Rs 10000 per member

Kudumbashree membership

For members

For Kudumbashree family members or relatives

Thrift deposit

Direct

Direct or for family members or relatives

Subsidy Schemes for Enterprises

Subsidy for individual and group enterprises

  • For individual enterprises: 30% of project outlay or Rs 7500, whichever is less
  • For group enterprises: 50% of project outlay or Rs 10000 per member, whichever is less.

Crisis Management Fund

This is an interest free loan, limited to a maximum of Rs 25,000 per enterprise, extended to enterprises facing challenges or crisis of the following nature.

  • Working capital shortage due to delay in payment realisation from large customers
  • Need to expand production because of sudden increase in demand/ orders
  • When faced with losses due to reasons beyond the control of entrepreneurs

Eligibility:

  • Individual or group enterprises under RME or Yuvashree schemes
  • Enterprises started by Kudumbashree members under support from Grama Panchayats through Plan Fund, Special Central Assistance, or Linkage Loan
  • Existing enterprises that has been in business for the last six months

Second Round of Financial Support

This is a support extended to enterprises that have been in business for at least three years; the support is meant for business improvement or shift to a more viable business. Financial support is limited to 40% of the project outlay or Rs 2,50,000 whichever is less.

Eligibility:

  • The enterprise has to be in regular business for the last three years
  • Total project outlay should not exceed Rs 10 lakh
  • Funding support is proportional to the number of members active at present in the group
  • An enterprise is eligible for this support only once

Technology Fund

This is a fund meant for supporting running enterprises in acquiring modern technology, machinery or equipment for improving the quality and scale of their operations. The support is limited to 40% of the capital investment; maximum allowed amount is Rs 2,50,000.

  • Enterprises started under RME or Yuvashree scheme of Kudumbashree, or enterprises started by Kudumbashree members under support from Grama Panchayats through Plan Fund, Special Central Assistance, SJSRY, or Linkage Loan.
  • Enterprises that have been in business for the past six months.
  • The group should have at least three active members; support is proportional to the number of active members.
  • Project outlay including the investment on technology, machinery or equipment should not exceed Rs 10 lakh.

Innovation Fund

Enterprises established around innovative ideas and those trying to make innovative changes in their mode of functioning, technology, machinery or processes are eligible for support under innovation fund. The objective of the fund is to provide support to innovative entrepreneurs to overcome challenges that arise out of their innovations. The support is limited to 40% of the project outlay; the maximum support is Rs 2,50,000 (Rs 25,000 per family).

Eligibility:

  • Enterprises started under RME or Yuvashree scheme of Kudumbashree, or enterprises started by Kudumbashree members under support from Grama Panchayats through Plan Fund, Special Central Assistance, SGSY, or Linkage Loan.
  • Kudumbashree subsidy together with Plan Fund and Innovation Fund should not exceed 50% of the project outlay.
  • An enterprise is eligible for Innovation Fund only once.
  • Project outlay of the enterprise should not exceed Rs 10 lakh.

Revolving Fund

Revolving fund is aimed at supporting enterprises run by Kudumbashree members through provision of working capital support. This is available only for group enterprises; applications are to be submitted through the concerned CDS. Revolving fund is paid directly to the entrepreneurs.

Eligibility:

  • Enterprises should be run by Kudumbashree members
  • Should have been running for the last six months

Starting an Enterprise

Potential entrepreneurs have to follow a standard set of steps to start an enterprise with Kudumbashree support.

  1. General orientation training
  2. Entrepreneurship development programme
  3. Skill training
  4. Project preparation
  5. Bank linkage and approval
  6. Availing Kudumbashree subsidy for qualifying groups
  7. Availing bank loan
  8. Follow up by Kudumbashree
  9. Performance Improvement training
  10. Revolving fund support from Kudumbashree
  11. Follow up by CDS, GP, and Kudumbashree District Mission
  12. Second round of financial assistance for eligible enterprises

As Kudumbashree plays an active role in enterprise promotion, the above steps work as a process, guided and supported by the Mission and the community network. I most cases, it is the Mission and its community network that identify potential entrepreneurs and encourage them to pass through the above process. Micro Enterprise Consultants (MECs) trained by the Mission for providing managerial support to enterprises, as well as the training groups of the Mission support the process. While MECs offer support at all levels including firming up the idea, preparing the project proposal, linking with the banks, and setting up the enterprise, the training groups contribute through capacity building programmes.