The prime minister’s Rs100 billion small business loan scheme for youth may only cater to 5,000 people if each of them applies for a Rs2 million loan – an investment required for the majority of businesses identified by the Small and Medium Enterprises Development Authority that prepared the pre-feasibility studies.
Even if the government releases Rs2 million to each applicant, the number of beneficiaries would not be more than 5,000, out of a total of about two million applicants.
According to officials, the SMEDA, which had been assigned to assist applicants with business planning, has failed to develop any plan to start business with a loan of Rs100,000 or up to Rs1 million, despite the fact that most of the loan recipients will fall in that range.
Officials said information on ‘how to develop a business plan’ was frequently being accessed along with the 56 pre-feasibility studies, FAQs, financial calculators pertaining to loan repayment, balance sheet, income statement, cash flow statement, business plan guidelines/templates by loan applicants on SMEDA’s official website.
As per SMEDA, the 56 businesses pre-feasibility studies cover 15 major and potential business areas of seed oil extraction (cottonseed); rose water, honey, pickle production, processing, packing and marketing; injection moulding plastic products; lightweight roof tiles manufacturing; interior designing and landscaping; goat fattening farm; sheep fattening farm; calf fattening farm; camel farming; dairy farm; layer farming; meat shop; poultry farming; veterinary clinic; fodder production and trading; UPS and stabiliser assembling, inland fish farming, shrimp farming, baking and confectioning, etc.
As the enclosure of a business plan has been the condition of banks, applicants who want to apply for loan below Rs1 million may not be considered for loans due to unavailability of low cost feasibility studies on the market. As of now, according to the SMEDA, the figure of downloaders of the feasibility plans has topped 2 million.
Moreover, it is still unclear which bodies will be scrutinising loan applications and sanctioning loans.
As per SMEDA, the pre-feasibility study provides information on key facets of starting a boutique business for women entrepreneurs. The boutique business venture entails a total investment of about Rs2.18 million. The montessori school business venture entails a total investment of about Rs2.2 million: this includes a capital investment of Rs1.73 million and a sum of Rs0.47 million as initial working capital.
According to SMEDA’s pre-feasibility study for a medical store, the total initial cost for setting up a single outlet is estimated at Rs2.06 million, out of which capital cost is Rs0.89 million along with working capital of Rs1.17 million. Feasibility study for a security agency says that total cost estimates will be around Rs2.19 million, with a fixed investment of Rs1.40 million and an initial working capital requirement of Rs. 0.79 million.
According to feasibility study of wholesale distribution agency, total cost estimates of the project is Rs. 2.17 million with a fixed investment of Rs0.83 million and working capital of Rs1.33 million. Costs for setting up an interior designing and landscaping business are estimated at Rs1.78 million.
The total project cost for setting up a footwear retail outlet is estimated at Rs1.97m out of which Rs0.94 million. The project of honey production, processing, packaging and marketing envisages total cost estimate is Rs2.19 million. A seed oil extraction unit will cost about Rs1.9 million.
Bakery and confectionery business can be started with an investment of Rs2.04 million. Fast food eatery may cost Rs2.19 million with a fixed investment of Rs. 1.87 million and an initial working capital of Rs0.32 million.
Catering and decoration services business will cost around Rs2.1 million. Cost estimates for a pickle production, processing, packaging and marketing unit are Rs2.1 million with a fixed investment Rs1 million and working capital Rs1.1 million. Fodder production and trading company may be started at a cost of Rs2.03 million.
Total initial cost for setting up a medical transcription setup is estimated at Rs. 2.00 million out of which capital cost is Rs. 1.72 million along with working capital of Rs. 0.28 million. The total initial cost for setting up an internet cafe is estimated at Rs. 1.54 million out of which capital cost is Rs. 1.24 million along with working capital of Rs. 0.30 million.
The total project cost for setting up Engineering workshop is estimated at Rs. 1.72 million out of which Rs 1.19 million is capital cost and Rs 0.53 million as working capital. The wooden furniture business venture entails a total investment of about Rs. 2.12 million. This includes a capital investment of Rs.1.10 million and a sum of Rs. 1.02 million as initial working capital. Hand Made Carpet Manufacturing total Cost Estimate is Rs. 2.08 million with fixed investment Rs. 0.72 million and working capital of Rs. 1.36 million with 55% IRR and payback period of the project is 3 years & 1 months.
The injection molding setup total cost estimates are Rs. 2.18 million with a fixed investment of Rs. 1.84 million and an initial working capital requirement of Rs. 0.34 million. Stone Crushing Plant total proposed project cost is Rs 2.2 million with a total capital cost of Rs 1.78 million and Rs. 0.42 million as a working capital.
Pre-feasibility plan of major businesses
Business nature Total cost
Boutique business Rs. 2.18 m
Montessori school Rs. 2.20 m
Medical store Rs. 2.06 m
Security agency Rs. 1.40 m
Wholesale agency Rs. 2.17 m
Beauty Clinic Rs. 2.11 m
Landscaping Rs. 1.78 m
Footwear outlet Rs. 1.97m
Florist Shop Rs. 1.58 m
Honey production Rs. 2.19 m
Seed Oil Extraction Unit Rs. 1.9 m
Bakery & Confectionery Rs. 2.04 m
Fast food restaurant Rs. 2.19 m
Business nature Total cost
Catering Services Rs 1.37 m
Pickle Production Rs. 2.1 m
Fodder production Rs. 2.03 m
Medical transcription Rs. 2.00 m
Internet cafe Rs. 1.54 m
Engineering workshop Rs. 1.72 m
Wooden furniture Rs. 2.12 m
Hand Made Carpet Rs. 2.08 m
Injection molding Rs. 2.18 m
Leather manufacturing Rs. 2.12 m
Roof Tiles Manufacturing Rs. 2.15 m
UPS Assembling Rs. 1.77 m
Auto Workshop Rs. 2.20 m