Project Dates
Implementation Start: July 2008
Project Details
The project concept involves providing financial assistance to 38 individual SHG members who have started/expanded various self employment activities after undergoing training by Entrepreneurship Development Institute of India (EDI). The NGO Spoorthi was responsible for the selection of the candidates and now is involved in monitoring these women entrepreneurs on a constant basis along with EDI.
Verification of the women entrepreneurs has been done through a visit to their places of business in Kollegala and Mysore. The women are highly motivated to expand their businesses and are already seeing profits ranging from Rs. 2000 to Rs. 12000. Only women needing infrastructure services for their busnesses (like machines) and women dealing with infrastructure products/services have been selected for the loan. The details of the entrepreneurs are attached.
About Spoorthi: Spoorthi Janaabhivrudhi Samste (hereafter referred to as “Spoorthi”) has been registered under the Karnataka Societies Registration Act, 1960 in 2006. Spoorthi has been involved in SHG creation and various awareness programs in addition to providing financial assistance to the women’s groups that it has mentored. Right now it has close to 70 SHGs in Mysore District.
State Bank of India, Chamundipuram Branch has come forward to provide loans to these women entrepreneurs. The beneficiaries will give a margin money of 25% of the project cost and S3IDF will have to put in a partial guarantee of 50% of the loan amount. The loan will be given to Spoorthi against the partial guarantee given by S3IDF, which in turn will give the loan to the individual SHG members. The rate of interest levied by the bank will be maximum 15% and that levied by the NGO would be maximum 20%. (The rate of interest will be decided by the bank once a detailed project report is submitted by the NGO. The Manager has assured between 11 to 15%. The NGO is looking at leveraging lesser rate of interest from the bank so as to keep the overall rate of interest to less than 20% for the benefeciaries). The loan period will be 1 year. Details are attached in the excel file.
Project Financials
http://spreadsheets.google.com/pub?key=pwRdPi0mYDcLmZqg4SVCgEA
Project Size Details
The project involves providing loans to 38 individual SHG members (except for 4 non SHG members). The project cost comes upto Rs 10,35,000.
Project Impact Details
The project will impact first and foremost the women entrepreneurs who have been motivated by the EDI training to start/expand their own various enterprises and belong to low income group striving to improve their standard of living.
The NGO will also benefit from the loan as it is still finding its feet and this will enable it to support the women it helped to get trained. This loan will also enable the NGO to train more interested women entrepreneurs under EDI.
Estimated Pre-investment Costs
Total Costs- Rs. 18690
S3IDF costs
Personnel Costs – Rs. 11690
Other costs - Rs. 7000
Total S3IDF costs – Rs. 18690
Returns for S3IDF Revolving Fund
17% annual returns for 1 year
Project Indicators
Investment Indicators:
Investment size – Rs. 1035000
Revolving fund – Rs. 388125
RF to investment size – 38%
Cost Indicators
Total pre investment cost – Rs. 18690
Pre investment cost/Investment Ratio – 1.81%
Impact indicators
Number of direct beneficiaries – 44
Investment size/no. of beneficiaries – Rs. 23523
Project Risks
Project owner/operator risk:
There is a risk involved as the NGO Spoorthi has been around for 2 years and has never taken a loan as an NGO. However, the NGO has experience with 70 SHGs and is looking to expand more. Seeing the fact that they did a good job with the first batch of trainees in terms of selection across different SHG groups (many belonging to other NGOs) and are still actively involved in monitoring the entrepreneurs, the NGO seems to be serious about its work. The NGO can be looked at partnership in the same way as CRWCWS. It is training more SHG members under EDI again; hence S3IDF can look into supporting more such women entrepreneurs for them.
With regards to repayment, the NGO has animators constantly on the field in Mysore and Kollegala. The repayment will be collected by them during the monthly meeting of the SHGs, and a system of fines and checks (already developed for SHGs for SHG loans) will ensure timely repayment.
Market risk:
There can be market risk for the entrepreneurs as most are into tailoring and are looking at expanding in that field. However, all of them have been getting orders and materials from merchants, and as such do not act as tailors for their areas. There is a lot of market in Mandya and Mysore and the entrepreneurs are tapping such areas. Moreover, they are into specialized work such as chamki work and embroidery, which is better paying and is still in demand.
Technology risk:
There is no technology risk.
Portfolio risk:
There is no portfolio risk.
Mission risk:
There is no mission risk. Entrepreneurs who were not falling under our mission had to be dropped and only those which came under the purview of infrastructure have been selected.
Partners
Spoorthi, State Bank of India
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