Project Dates
Implementation Start: August 2008
Project Details
A70 is the expansion of A39, which has been in operations from April 2005. The project has been running successfully on hybrid system and has been catering to 40 hawkers. The enterprise consists of 34 Sakthi batteries, 6 Supreme batteries, 40 Selco light Units, 8 TTT light units, 3 panels of 34 watts and 2 chargers (1 solar and 1 grid charger). However, the entrepreneur Srinath Aital is now shifting his base to Udupi and hence the need for transferring the enterprise to a new entrepreneur.
Mr. Ravi Vasant Sollapure has come forward to take up the successful enterprise. He has worked with Srinath in his business before (Parimala Traders) and has been a resident of Belgaum for almost 24 years. From the last 3 years, he is in the Electronic Weighing Machine stamping and servicing business.
Srinath Aital had procured a loan of Rs. 1,27,925 in April 2005 for the project with the help of S3IDF’s partial guarantee for 25% of the project cost (Rs 31,982) from Malaprabha Grameen Bank. The loan term is for 5 years. Srinath has quoted a a price of Rs. 1,00,000 for the purchase of the enterprise to Ravi, which includes remaining repayments for the loan. Once Srinath repays the loan, our FD in Malaprabha Grameen Bank will be released.
Since Ravi does not have the capacity to buy the enterprise, State bank of India (Shivbasava Nagar branch, Belgaum) has been approached for the loan. The bank is willing to give Ravi a loan of Rs 1,00,000 with partial guarantee by S3IDF for 25% of the loan amount. The loan tenure will be for 3 years.
Project Financials
http://spreadsheets.google.com/pub?key=pwRdPi0mYDcKkFqsHMA75Dw
Project Size Details
The entrepreneur has a ready-made business of 40 hawkers, with close to 15 more hawkers demanding the lights. He plans to invest in more batteries once the enterprise is transferred to his name.
Project Impact Details
The project will benefit the entrepreneur. The hawkers will benefit from access to convenient and clean lighting. Further, the enterprise will continue to run in Belgaum, providing energy efficient lights to hawkers.
Estimated Pre-investment Costs
Total Costs- Rs. 13680
S3IDF costs
Personnel Costs – Rs. 6680
Other costs - Rs. 7000
Total S3IDF costs – Rs. 13680
Returns for S3IDF Revolving Fund
22% average annual returns
Project Indicators
Investment Indicators:
Investment size – Rs. 100000
Revolving fund – Rs. 25000
RF to investment size – 25%
Cost Indicators
Total pre investment cost – Rs. 13680
Pre investment cost/Investment Ratio – 14%
Impact indicators
Number of direct beneficiaries – 41
Investment size/no. of beneficiaries – Rs. 2439
Project Risks
Project owner/operator risk:
Mr. Ravi has worked under Mr. Srinath in his other business before, and has helped him in the hawkers lighting business too. Since he is already involved in a business, he seems capable enough of running the enterprise. Moreover, Srinath will help Ravi in the running of the business ensuring the successful transfer of the enterprise.
Market risk:
Ravi is taking over an already existing market and hence the risk is less. Moreover, there is demand fro more lights which Ravi is planning to cater to by buying more batteries.
Technology risk:
There is no technology risk as the batteries and light points have been in use for three years now. Moreover, Srinath will be teaching Ravi about maintaining the batteries and where to procure own batteries for future.
Portfolio risk:
There is no portfolio risk.
Mission risk:
There is no mission risk.
Partners
The entrepreneurs, Mr. Srinath and Mr. Ravi, State Bank of India.
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