Project A136- Hawkers’ Light points Expansion at Bangalore (A69), Bangalore District, Karnataka

Project dates
Implementation start: November 2007

Project details
This is a hawker’s light point business for vendors in Bomanahalli and Madiwala in Bangalore. The entrepreneur, Mr. Vijayakumar, started operations in August 2005. Mr. Vijayakumar began his business supplying about 30 hawkers in Bomanahalli with batteries and light fixtures for Rs. 15 per day.

In December 2006, S3IDF helped Mr. Vijayakumar to expand from 80 lights to 120 lights with an improved transportation system (A second hand modified car instead of an autorickshaw). A restructuring of the loan with S3IDF was done in August 2007, along with additional loan to help Vijayakumar repay his bank loan amount. The restructuring was done after Vijayakumar faced losses after investing in faulty batteries and light points to help him recoup his losses and sustain his business.

Mr. Vijayakumar is going for further expansion with 50 more batteries (Sakthi batteries). S3IDF is giving him the required financial assistance, looking at his business performance after the restructuring.

Project Financials
http://spreadsheets.google.com/pub?key=pwRdPi0mYDcKWAe1kYH3RTg

Project Size Details
Project A136 involves the purchase of 50 additional batteries at Rs. 2413 each from Sakthi in November 2007.

Project Impact Details
Because of the expansion, Mr. Vijayakumar’s income will further increase by Rs. 6000.
The project will in turn impact new hawkers availing the services of Mr. Vijayakumar.

Estimated Pre-investment Costs
Total Costs – Rs. 5510

S3IDF costs
Personnel costs – Rs. 5010
Other costs – Rs. 500
Total S3IDF costs – Rs. 5510

Returns for S3IDF Revolving Fund
Actual returns of 8%

Project Indicators

Investment indicators:
Investment size : Rs. 128131
S3IDF Revolving Fund: Rs. 128131
RF to investment size: 100%

Cost Indicators
Total pre investment costs – Rs. 5510
Pre-investment cost to investment ratio – 4%

Impact indicators
Number of direct beneficiaries – 50
Investment size per beneficiary – Rs. 2563

Project Risks

Project Owner/Operator Risk:
Vijayakumar has been running the hawker light points business enterprise for more than 2 years. After the losses in between, he is looking to stabilize and expand. With reliable batteries and light points, the risk of the business undergoing losses again seems minimal.

Market risks:
There are no market risks as Vijayakumar is expanding due to increase in demand for lights.

Technology Performance risks:
Our experience shows that Sakthi batteries are more reliable than those from informal suppliers. The batteries come with a 2-year warranty. Hence the technology risk is minimal.

Portfolio risks:
Since it is an expansion of an existing hawker light points project, there is no portfolio risk.

Mission/Regulator’s perception risk:
The project is adequately pro-poor to pose no significant mission/regulator risk.

Partners
Sakthi Electronics, Mr. Vijayakumar