A118a. Expansion of Hawker light point in Peenya, Bangalore, Karnataka
A118b. Three-wheeler for hawker lighting project in Peenya, Bangalore, Karnataka
A170. Hawker lighting in Malleshwaram, Bangalore, Karnataka
A170. Hawker lighting in Malleshwaram, Bangalore, Karnataka
Project dates:
Implementation start: July 2007
Project details:
This is a hawker’s light point business for vendors in Dasarahalli and Malleshwaram in Bangalore. The entrepreneur, Mr. Jayakumar, started operations in September 2006. Mr. Jayakumar began his business supplying about 30 hawkers in Dasarahalli with batteries and light fixtures for Rs. 15 per day. His business had dropped down to 18 customers in April 2007 due to competition. At that point, he began supplying lights to 6 hawkers in Malleshwaram as well.
Jayakumar obtained about 40 batteries from a small supplier in Bangalore (Vishal). Because of the low quality of these batteries and the fact that they only hold a charge for up to two hours, Mr. Jayakumar had to provide each customer with two batteries. Vishal has not provided a warranty on the batteries, as he claims the batteries have been damaged by current fluctuations. The light fixtures, provided by Mr. Vijaykumar (proprietor of S3IDF-supported light point business in Bomanahalli), were of similarly poor quality, with internal circuitry corroding and burning out.
In July 2007, S3IDF purchased 30 batteries for Mr. Jayakumar from Sakthi Electronics, a well-established supplier. This was followed by an expansion where 25 more batteries were bought in August 2007 to replace faulty batteries and expand customer base (A118 a). Mr. Jayakumar also solved the issue of the light fixtures by producing the light fixtures on his own using better quality raw materials for the fixtures, even though it has meant increase in the cost of the lights as compared to the previous ones.
S3IDF procured 20 batteries each in November and December 2007 from Sakthi Electronics to aid Jayakumar to establish his business in Malleshwaram, along with a loan to transfer his charging station to a more spacious place (A170). Further, S3IDF helped Jayakumar with down payment for his three wheeler vehicle, to enable him to transport batteries to his expanding customer base efficiently (A118b).
Implementation start: July 2007
Project details:
This is a hawker’s light point business for vendors in Dasarahalli and Malleshwaram in Bangalore. The entrepreneur, Mr. Jayakumar, started operations in September 2006. Mr. Jayakumar began his business supplying about 30 hawkers in Dasarahalli with batteries and light fixtures for Rs. 15 per day. His business had dropped down to 18 customers in April 2007 due to competition. At that point, he began supplying lights to 6 hawkers in Malleshwaram as well.
Jayakumar obtained about 40 batteries from a small supplier in Bangalore (Vishal). Because of the low quality of these batteries and the fact that they only hold a charge for up to two hours, Mr. Jayakumar had to provide each customer with two batteries. Vishal has not provided a warranty on the batteries, as he claims the batteries have been damaged by current fluctuations. The light fixtures, provided by Mr. Vijaykumar (proprietor of S3IDF-supported light point business in Bomanahalli), were of similarly poor quality, with internal circuitry corroding and burning out.
In July 2007, S3IDF purchased 30 batteries for Mr. Jayakumar from Sakthi Electronics, a well-established supplier. This was followed by an expansion where 25 more batteries were bought in August 2007 to replace faulty batteries and expand customer base (A118 a). Mr. Jayakumar also solved the issue of the light fixtures by producing the light fixtures on his own using better quality raw materials for the fixtures, even though it has meant increase in the cost of the lights as compared to the previous ones.
S3IDF procured 20 batteries each in November and December 2007 from Sakthi Electronics to aid Jayakumar to establish his business in Malleshwaram, along with a loan to transfer his charging station to a more spacious place (A170). Further, S3IDF helped Jayakumar with down payment for his three wheeler vehicle, to enable him to transport batteries to his expanding customer base efficiently (A118b).
Project financials
Project Size Details
Project A118a covers the purchase of 25 additional batteries at Rs. 2278 each from Sakthi in August 2007. In order to make use of and pay for the batteries, Mr. Jayakumar agreed to increase his customer base from approximately 30 to at least 50 by October 2007. Project 118b covers the down payment amount (Rs. 45000) loaned to the entrepreneur for Bajaj three wheeler transportation. The total cost of the three wheeler is Rs 1,40,000, of which the remaining Rs. 95000 has been taken as a loan from Ashok Leyland.
Project 170 involves buying 20 batteries in November 2007 at Rs. 2413 each and 20 more in December 2007 at Rs 2355 each from Sakthi Electronics. It also includes the loan given to Mr. Jayakumar for advance towards the new charging station (Rs. 20000).
As a result of these additional investments, the entrepreneur is servicing 90 hawkers at present.
Project Impact Details
Mr. Jayakumar was formerly an auto driver. As his wife does not work, and he has two children in private schools, he has been working to increase his income in order to make ends meet and continue to meet his children’s educational needs. Mr. Jayakumar was earning about Rs. 3000 in profit each month from the lighting enterprise, which increased to Rs. 8000 after expansion (A118a). The additional investments in his lighting business should provide an additional increase of Rs 3000 to Mr. Jayakumar’s income. Moreover, Mr. Jayakumar has hired a relative from his village to help him out in the business and is paying a monthly salary to him.
The project will in turn impact Mr. Jayakumar’s clientele, consisting of petty shopkeepers and hawkers in Bangalore’s Peenya Industrial Area in Dasarahalli and Malleshwaram.
Estimated Pre-investment Costs
Total Costs – Rs. 14690
S3IDF costs
Personnel costs – Rs. 11690
Other costs – Rs. 3000
Total S3IDF costs – Rs. 14690
Returns for S3IDF Revolving Fund
Annual returns of 8% for 3 years
Project Indicators
Investment indicators:
Investment size : Rs. 3,70,608
S3IDF Revolving Fund: Rs. 2,75,608
RF to investment size: 74%
As a result of these additional investments, the entrepreneur is servicing 90 hawkers at present.
Project Impact Details
Mr. Jayakumar was formerly an auto driver. As his wife does not work, and he has two children in private schools, he has been working to increase his income in order to make ends meet and continue to meet his children’s educational needs. Mr. Jayakumar was earning about Rs. 3000 in profit each month from the lighting enterprise, which increased to Rs. 8000 after expansion (A118a). The additional investments in his lighting business should provide an additional increase of Rs 3000 to Mr. Jayakumar’s income. Moreover, Mr. Jayakumar has hired a relative from his village to help him out in the business and is paying a monthly salary to him.
The project will in turn impact Mr. Jayakumar’s clientele, consisting of petty shopkeepers and hawkers in Bangalore’s Peenya Industrial Area in Dasarahalli and Malleshwaram.
Estimated Pre-investment Costs
Total Costs – Rs. 14690
S3IDF costs
Personnel costs – Rs. 11690
Other costs – Rs. 3000
Total S3IDF costs – Rs. 14690
Returns for S3IDF Revolving Fund
Annual returns of 8% for 3 years
Project Indicators
Investment indicators:
Investment size : Rs. 3,70,608
S3IDF Revolving Fund: Rs. 2,75,608
RF to investment size: 74%
Cost Indicators
Total pre investment costs – Rs. 14690
Pre-investment cost to investment ratio – 4%
Total pre investment costs – Rs. 14690
Pre-investment cost to investment ratio – 4%
Impact indicators
Number of direct beneficiaries – 65
Investment size per beneficiary – Rs. 5702
Project Risks
Project Owner/Operator Risk:
Jayakumar has been reliably running the hawker light points business enterprise for more than a year. Initially he was facing the risk of closure due to competition, faulty batteries and poor quality light points. However, with additional investment in good quality batteries and light points and efficient handling, he has increased his customer base successfully and is looking to expand more.
Market risks:
Our key competition is from emergency lights (sold in lease towards purchase model) and street lights. Due diligence on the emergency lights indicates that significant portion of the hawker community have not bought it intentionally because they last for only 6 – 8 months, at most a year + due to the hawkers routine (need to procure vegetables early in the morning), they do not like carry it around as they would need to if they charge it at home. Those under the street light are expected to hire our lights anyway. Also these competitions are one of the reasons full grid is being taken up.
Technology Performance risks: Technology performance risk is a factor. However, one of the primary purposes of selecting Sakthi Batteries is to minimize the chances of technology performance risks that come from less reputable, informal brands. Our experience shows that Sakthi batteries are more reliable than those from informal suppliers. The batteries come with a 2-year warranty
Portfolio risks: Since this is a repeat of the hawkers lighting project, it does represent a portfolio risk. However it is equally designed to capture greater returns.
Mission/Regulator’s perception risk: The project is adequately pro-poor to pose no significant mission/regulator risk.
Partners:
Number of direct beneficiaries – 65
Investment size per beneficiary – Rs. 5702
Project Risks
Project Owner/Operator Risk:
Jayakumar has been reliably running the hawker light points business enterprise for more than a year. Initially he was facing the risk of closure due to competition, faulty batteries and poor quality light points. However, with additional investment in good quality batteries and light points and efficient handling, he has increased his customer base successfully and is looking to expand more.
Market risks:
Our key competition is from emergency lights (sold in lease towards purchase model) and street lights. Due diligence on the emergency lights indicates that significant portion of the hawker community have not bought it intentionally because they last for only 6 – 8 months, at most a year + due to the hawkers routine (need to procure vegetables early in the morning), they do not like carry it around as they would need to if they charge it at home. Those under the street light are expected to hire our lights anyway. Also these competitions are one of the reasons full grid is being taken up.
Technology Performance risks: Technology performance risk is a factor. However, one of the primary purposes of selecting Sakthi Batteries is to minimize the chances of technology performance risks that come from less reputable, informal brands. Our experience shows that Sakthi batteries are more reliable than those from informal suppliers. The batteries come with a 2-year warranty
Portfolio risks: Since this is a repeat of the hawkers lighting project, it does represent a portfolio risk. However it is equally designed to capture greater returns.
Mission/Regulator’s perception risk: The project is adequately pro-poor to pose no significant mission/regulator risk.
Partners:
Sakthi Electronics, Mr. Jayakumar
Monitoring Reports
Monitoring Report done By Ms. Surekha in Nov 07
http://docs.google.com/Doc?id=dft8hdgq_79dsfdvhq
Monitoring Reports
Monitoring Report done By Ms. Surekha in Nov 07
http://docs.google.com/Doc?id=dft8hdgq_79dsfdvhq
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