Project Dates
Implementation Start: June 2008
Project Details
This project concept involves the creation of a new micro enterprise investment, which, located in the un-electrified/under-electrified Hawker’s (street sellers) community in Vijayanagar, Bangalore, will provide lighting to the Hawkers.
Anand, who has been helping Srinivas in Banashankari, approached S3IDF for starting his own enterprise in Vijayanagar market. However, hawkers from KR Market approached Srinivas to restart his business there at about the same time. The project had gone into hiatus due to problems faced by the administration in KR Market and the entrepreneur had consequently shifted to Banashankari market. The hawkers and their leaders came together to demand for the lights again and have asked the entrepreneur to resume his business in KR Market. They have also assured that he will not face any more problems from the administration or any other organization. However as Srinivas is trying to set up in Banashankari, he asked his brother Anand to resume the business in KR Market.
Seeing the risks involved in KR Market, Anand has decided to use the charging station in KR Market but start operations with Vijayanagar market. The distance between the charging station and Vijayanagar market is 2 kms.
In this specific instance, the charging will be done by full grid charging. The current capacity for the charging station is designed to be for 50 hawkers.
For this project, 55 batteries along with 50 light points, 1 charger and other accessories will be used. Initially it was decided that batteries, a charger, lightpoints and other accessories will be shifted from Banashankari. However, Srinivas has increased his customers to close to 70 and is looking to expand more. Therefore, only the charger is being transferred to Vijayanagar project. The charging station which was being used earlier has still not been occupied and will be used by Anand again.
Syndicate Bank, Chikpet branch has been approached for the financing of the project. The Bank Manager has suggested providing the loan under SJSRY and other subsidy schemes under DIC (these schemes require just registration for caste quota or women quota, which Anand’s wife can do). Their targets for these schemes have not been met and they would definitely look at our entrepreneurs under those categories. In case, we are not able to leverage those schemes, he will be providing loan to the entrepreneur provided Anand gets a guarantor and we might have to put partial guarantee too.
The direct loan is being given on a short term basis till the loan with the bank is done. One of the reason is that the hawkers had been using emergency lanterns which are giving away now and the entrepreneur feels that it is the right time to start the project. The modalities of transferring the project have been discussed with the bank manager and they have agreed for the transfer too.
Note: Srinivas gives one battery in a place for 2 days. The usage is from 6:30/7 pm to maximum 10 pm. This means that he charges close to 40 batteries in a day and hence needs only one charger. I have got batteries checked through the altometer (after charging and after usage) by Purushottam and the batteries seem to be well maintained. Srinivas has been informed that he will have to buy a charger on his own in case he needs it in the future.
Project Financials
http://spreadsheets.google.com/pub?key=pwRdPi0mYDcKOkRUsCEagCg
Project Size Details
The entrepreneur will initially start servicing 50 hawkers, expanding the business once the demand for the lights increase.
Project Impact Details
The project will benefit the entrepreneur, currently assisting Srinivas in Banashankari. Additionally, the hawkers will also benefit from access to convenient and clean lighting.
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
11% average annual returns
Project Indicators
Investment Indicators:
Investment size – Rs. 222779
Revolving fund – Rs. 222779
RF to investment size – 100%
Cost Indicators
Total pre investment cost – Rs. 5510
Pre investment cost/Investment Ratio – 2%
Impact indicators
Number of direct beneficiaries – 51 (at the start of the project)
Investment size/no. of beneficiaries – Rs. 4368
Project Risks
Project owner/operator risk:
Mr. Anand had been involved with another hawker light points project and is familiar with the dynamics of the enterprise. Hence, the risk is less.
Market risk:
The hawkers in Vijayanagar market use a combination of gas and kerosene lanterns. Some of them have started using emergency lanterns while others use the street light available to them. The entrepreneur is confident of targeting the hawkers using kerosene and gas lanterns initially, slowly covering others when their emergency lanterns give away. The entrepreneur is confident of getting close to 30 customers in the market after the demonstration of the lights.
Technology risk:
There is no technology risk as the batteries (Shakti batteries) and the light points designed are being used by other entrepreneurs in their own project without any problems.
Portfolio risk:
There is no portfolio risk.
Mission risk:
There is no mission risk.
Partners
The entrepreneur, Mr. Anand and the battery supplier, Sakthi batteries.
Subscribe to:
Post Comments (Atom)
2 comments:
1. You have not mentioned lease to purchase as I assume direct financing by us is lease to purchase.
2. How are you taking care of the sales tax problem which Srinivas faced. it is a risk for all our hawkers projects in Bangalore.
How do you get the battery expertise which is there with Naganathpura Ramesh to our other projects, if we can do it, the cost of the project reduces and everyone gains.
we had talked about training our entrepreneurs before they take up a project, are you training Anand in technical and accounting details?
Post a Comment