a. A165a - Siruguppa, Bellary District, Karnataka
b. A165b –Nayakanahatti, Chitradurga District, Karnataka
c. A165c – Jaglur, Davengere District, Karnataka
d. A165d – Kanahosalli, Bellary District, Karnataka
Project Dates
October 07
Project
Photos
Photo 1: Our Siriguppa office
Photo 2: Sankarappa, who runs the Siriguppa office
Project Financials
http://spreadsheets.google.com/pub?key=pProject Details
This project concept is to provide very Small Household Energy/Infrastructure Devices such as pressure cookers, water filters, solar lanterns etc. to rural households through S3IDF run infrastructure shops. Another variant of supplying these devices is to develop entrepreneurs through working capital support who will sell these devices to poor customers. The S3IDF run infrastructure shop concept started when S3IDF’s partner organization, CRWCWS (Chaitanya) completed several multiple projects of selling lights, pressure cookers and coin phones. The infrastructure shop started in the month of July 07 in Nayakanahatti. The earlier sales were considered as individual projects (A75j – telecom Chitradurga, A75k – pressure cookers in Nayakanahatti, A75l – mobile phones in Nayakanahatti, A75m – telecom Nayakanahatti).
In addition to doing sales of infrastructure devices, these infrastructure shops will also do LPG connection financing and also get other local S3IDF projects, such as A164-Siriguppa lighting).
Initially, the plan was to run the shops through S3IDF’s SPV, S3IDF Infraserve. However, since this was not possible, the sales are being planned to be done through a contract with S3IDF’s partner, Chaitanya. Chaitanya has got the necessary tax clearances (VAT) to do sales of the products. Chaitanya is doing this through a separate legal entity called as Chaitanya Enterprises which is a partnership firm. The contract between S3IDF and Chaitanaya is such that, Chaitanya’s contract employees will run the infrastructure shops. The expenses for running the shops will come from S3IDF. All profits that come from the shops will come to S3IDF.
To make the centers profitable, the centers will also sell other household kitchen items such as electric mixers etc. The required financing for conducting the sales will be given through a contract agreement to Chaitanya enterprises. Chaitanya will return all the monies with profit to S3IDF.
Project Size Details
The total sales from three months of operations (October, November and December 07) are expected to be Rs. 75,000
Project Impact Details
The project is expected to impact 60 households
Estimated Pre-investment Costs
Total Costs – Rs. 40850
S3IDF costs
Personnel costs – Rs.8350
Other costs – Rs. 2500
Total S3IDF costs – Rs. 10850
Partner costs
Personnel costs –
Other costs -
Total Partner costs – Rs. 30000
Returns for S3IDF Revolving Fund
Project Indicators
Investment indicators:
Investment size – Rs. 75000
Revolving fund – Rs. 58000
RF to investment size – 77%
Cost Indicators
Pre investment cost/Investment Ratio – 54%
Impact indicators
No. of expected direct beneficiaries - 60
Investment size /no. of beneficiaries – Rs. 1250
Project Risks
Project Owner/operator risk:
The project operator is Chaitanya who has done several projects with S3IDF and has an excellent track record. Based on this, the operator risk is minimal
Market risk:
This is the biggest risk of this project. The risk is that for the costs incurred the sales cannot be made and the shops do not reach sustainability. However, sales of pressure cookers, water filters done through projects earlier at Nayakanhatti indicates that there is demand for these projects and a sustainable business can be run.
Technology risk:
There is no technology risk as the products that will be sold will be standard products
Portfolio risk:
There is no portfolio risk
Mission risk:
There is no mission risk
Partners
Chaitanya, local suppliers of Energy/Infrastructure Devices.
1 comment:
Would it make sense to include servicing as part of this supply chain? If the sales are sufficient, some commission-based service could ensure additional part-time employment.
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