A tiffin service started by a household cook, homemade nutritional supplements from a woman whose husband has HIV, eco-friendly products from a woman in rural Karnataka: all of these entrepreneurs are low-income people without collateral or land. They are all the recipients of seed money to start their businesses from the Be Fund, a risk capital fund.
The Be Fund, a non-profit enterprise that provides capital to people from low income groups for solving local problems, has now been launched in Mumbai. By the end of the year, it will select 25 people from the state to receive its funding.
So far, the fund has only selected and worked with entrepreneurs from Karnataka.
Recipients of the seed money must be between the ages of 18 and 29, be from a low-income group and not possess any land or capital. These are generally people who would not get loans from banks.
Entrepreneurs will be selected after a three-tier process, with the first batch of state awardees being rolled out in a month. Those selected can get up to Rs5 lakh worth of funding from the enterprise.
“These are new ways of looking at development and change,” said Lisa Haydlauff, executive director of the fund. “Poor young people have ideas, but not the capital to make these a reality.”
Four organisations are involved in the enterprise: non-profit group Going to School, US Agency for International Development (USAID), Deutsche Bank, and UBS.
Once they recover their initial investment, entrepreneurs repay the loan, thus supplementing the fund for future entrepreneurs.
The entrepreneurs selected also stand to lose nothing should their project fall through. “But we have had no failures until now. These young people take it very seriously because they know it’s the chance of a lifetime,” said Haydlauff.