New Delhi, May 21 (IANS): The creation by the Small Industries Development Bank of India (SIDBI) of a Rs.500 crore fund for small and medium enterprise (SME) startups in the service and retail sectors would give a major boost to an area that has long been ignored by the government but which has enormous potential, says an industry expert.

"Hitherto, the ministry of micro, small and medium enterprises had not even been looking at the service sector and concentrating on manufacturing. This is skewered because 66 percent of SMEs are in the service sector and retail. Only 34 are in the manufacturing space. This is a big divide that we had to address and this has now happened," Gaurav Marya, president of integrated solution company Franchise India, told IANS.

SIDBI Deputy Managing Director N.K. Maini announced the fund at the second National Convention on Entrepreneurship that Franchise India organised in the suburb of Surajkund over the weekend.

"The service, consumer goods space and retail were all ignored. For instance, if you wanted to start a salon, where would you go to for the money," Marya asked.

Noting there was a "lot of opportunity" in the e-commerce space, he asked: "Why can't we produce a Google? Because there are no incubation programmes. So we (Franchise India) bring talent and capital together. Globally, capital has chased business ideas or potential entrepreneurs with talent. It's the other way around here."

Describing the entrepreneurship convention as a "platform to bring industry experts to interact and share multidimensional insight on major aspects of entrepreneurship, innovations and business opportunities for the growth of entrepreneurship in India", Marya's wife Ritu Marya, who handled the logistics for the event, termed the outcome "very good".

"We had some 200 participants and there were some 50-60 startup concepts presented, of which some 20, largely service-based models and F&B (food and beverages) concepts looked very promising. So, that's a promising 40 percent success rate," she said.

"We had some 30 percent startups, 30 small and medium to midcap enterprises, 10 to 12 percent professionals looking at funding projects and 10 percent of the very young who were just out of college and looking to get into the entrepreneurship mode. The rest were consultants and suppliers" she explained.

Among the other success was the offer of the National Small Industries Corporation (NSIC) to put together a portfolio of bankers to incubate startups, she added.

About 40 percent of the participants were aged less than 30, Ritu Marya explained. "Most of the global startups are by younger people less than 30 years old."

An SME is described as one that requires investment of between Rs.20 lakh and Rs.20 crore.