This is my sample XML Code:
@Kamal has given you basically right answer here. This is why - nillable always seems to cause problems. Effectively, you can consider nillable as meaning allow the xsi:nil attribute on this element. The XML Schema spec describes nillable as an out of band signal - it's basically used to indicate NULL to databases.
What you want is an element that must be at least one character long as given by @Kamal