A151.Naganathapura.hawkers.Bangalore

Project Description/Concept: Ramesh is the person who is interested in running the Naganathpura hawkers. Ramesh is the son of Vijay Kumar’s elder sister. Vijay Kumar brought Ramesh to Bangalore from Shimoga about 4 years back. Ramesh is married with a 4 year old daughter. He owns an auto. He uses the auto to supply milk to houses. He supplies 300 lts. Per day and gets 80 paise per liter as commission. He also picks and drops school children from home to school. From these two services he earns, Rs. 6000 + Rs. 1500, that is a total of Rs. 7500 per month. Since the last 6 months he has on his own started running a hawkers light point business. He supplies around 30 light points on a daily basis. The small batteries he was using are now giving only 3 hours of backup due to which he is now losing customers. Since, he does not have the money to invest in batteries now, he came to us for financial assistance.

He needs around 50 batteries and lights to run his business in Naganathpura and has potential to expand his business to 75.

Candidate Investment Site: Naganathpura. This is around 20 km from Bangalore on the Bangalore Hosur highway. It is 5 km from Bomanahalli, where Vijay Kumar is located.

Project Financials
http://spreadsheets.google.com/pub?key=pwRdPi0mYDcLjqdYLOshhPg

Know-how and Technology Partners and Supply Chain Issues: The battery supplier is Mr. Sankar, who assembles batteries near lal bagh main gate. Since Sankar himself assembles batteries, he will be in a position to address any major problem that arises. Mr. Sankar’s works has been visited and seems to be fairly ok and has a decent understanding of the battery business. Mr. Sankar will be giving a warranty of 2 years

In spite of this, there will be the risk of battery failure. Sankar says he will give a guarantee of 2 years. There is always a risk that he will not be able to provide this is all batteries die out at the same time within the 2 year period. This risk will be addressed by the entrepreneur keeping aside Rs. 1000 every month for the battery fund. In addition to this, S3IDF will also keep Rs. 1000 or Rs. 500 aside as the battery risk fund.

Other Partners Stakeholders and Beneficiaries and Related Issues:

Partners: Vijay Kumar, who will do the installation of the batteries and lights and Sankar, the battery manufacturer

The beneficiaries will be Mr. Ramesh, the person running the project and the hawkers of Naganathpura

Implementation and Other Issues: This is a simple project and has little risks as Ramesh is already running the business. The only risk is battery performance.

Single or Multiple transactions:

This is the single transaction with the operator

This is the first transaction with battery supplier, Mr. Sankar

This is multiple transactions with Vijay Kumar

Slab for approval:

KCR

Budget and S³IDF’s exposure:

Sl. No	Item	Approx Cost in rupees	Person months
1.	Personnel costs (Pre-investment and implementation)	Rs. 9000 [- Rs. 4000 (AR)+ Rs. 3000 (Dayanand) + Rs. 2000 (Vijay Kumar)]	20 hrs of AR + 4 days of Dayanand + 8 days of Vijay Kumar
2.	Travel costs (Pre-investment and implementation)	Included above
	Total pre investment costs	Approx Rs. 10000
3.	Personnel & Travel costs for M & E	Approx Rs. 5000
4.	Other costs (Demonstration or new set up or satellite office)
5.	S3IDF revolving fund (Partial Guarantee or Debt or Equity etc)	Rs. 49000

Capital cost of the infrastructure:

Total cost – Rs. 1,10,500/-

S³IDF’s revenue and cost recovery:

Sl. No	Item	Approx Cost in rupees
1.	Guarantee fees
2.	Developer fees
3.	Sales fees
4.	Direct financing profits from interest charged	Rs. 7463/-
5.	Royalty fee	Rs. 4800/-
6.	Profit Sharing
TOTAL		Rs. 12,263/-

Total expenses – Rs. 10,000 and total cost recovery is Rs. 12,000

Timeline:

Sl. No	Item	Estimated Time required	Current Status
1.	Entry into Category B	10 days	Completed
2.	Information gathering on technology and other due diligence	10 days	Completed
3.	Entry into Category A	10 days	Completed
4.	Feasibility analysis and DPR	10 days	Ongoing
5.	Project in implementation	10 days
6.	Project in operation	10 days
TOTAL TIME REQUIRED		60 days

Various Risks:

1. Market risks: Expanding market of hawkers in the area. So, market risk is less. Also, complete grid, so low cost technology

2. Technology Performance risks: Battery performance for 2 years is the biggest. This is being addressed by:

1. Getting battery custom made by a person who is knowledgeable of the workings of the project, who can also repair the batteries if things go bad.
2. Operator will maintain battery fund
3. S3IDF will also maintain a battery fund

3. Organisational risks: Person already running project. Also person is relative of Bomanahalli entrepreneur, Mr. Vijay Kumar. So, personal risk is less

4. Portfolio risks: No significant portfolio risks

5. Mission/Regulator’s perception risk: Is a pro poor project

A69 & A136 Vijay Kumar Hawkers in Bangalore

Project loan repayment excel file.
THis is the latest updated loan repayment file
http://spreadsheets.google.com/pub?key=pwRdPi0mYDcJyT6HrZHiSaQ