A204 Lighting services for Hawkers in Jagalur, Davengere District, Karnataka

Project Dates

Implementation Start: October 2008

Project Details

Jaglur already has an infrastructure shop being run by CRWCWS. Plus there are close to 30 plus hawkers in jaglur.

CRWCWS tested Flexitron 1 watt-LED lights for more than 15 days and after finding the light to be satisfactory, gave the light to one family in a hamlet in Nayakanahatti on a trial basis. The family found the light to be better than the candles and kerosene lanterns that they were currently using. 10 more families in the hamlet evinced interest in the lights and more were expected to follow once the project is in operations. As CRWCWS found the numbers to be low for the project, they had also decided to target petty shops near the hamlet which are also not connected to the grid. There are 10 such shops in the area, and after seeing the lights, they too are willing to use the lights.

However, the households differed on the pricing of the light (Rs. 4/day) and refused to take the light. Therefore, CRWCWS shifted the project to Jagalur and started giving the lights to the hawkers for a price of Rs. 5/day. The hawkers are very happy with the lights and more are expected to follow suit.

The 1 watt-LED lights by Flexitron have a good potential for such rural areas with sizeable hawkers without connection to grid and using inefficient lighting. However, they are new in the market and would have to be adequately tested. Therefore, this project has been designed for a period of 2 months to understand the issues involved with the lights per se (technical) and response of the customers to the same. A rental model has been agreed upon along with CRWCWS and the customers have agreed to pay Rs 5/light/day. At the end of 2 month period, the business model will be transferred to an entrepreneur either through a loan from the bank or S³IDF.

Project Financials

http://spreadsheets.google.com/pub?key=pwRdPi0mYDcJKWMhnE9Q9YQ

Project Size Details

The size of the customers will be limited to not more than 20 customers, which might increase after the 2 month period if the lights do well.

Project Impact Details

The project will impact petty shops who will gain access to clean, cheaper and brighter lighting. Candles and kerosene lanterns do not give adequate light and cast a shadow as well. And with the daily expenditure on lights being more than Rs 5 for households and petty shops, the rental of Rs 5 will enable them to save unnecessary expenditure on not so efficient sources of lights.

Estimated Pre-investment Costs

Total Costs- Rs. 6510

S3IDF costs

Personnel Costs – Rs. 5010

Other costs - Rs. 1500

Total S3IDF costs – Rs. 6510

Returns for S3IDF Revolving Fund

11% average annual returns

Project Indicators

Investment Indicators:

Investment size – Rs. 17000

Revolving fund – Rs. 17000

RF to investment size – 100%

Cost Indicators

Total pre investment cost – Rs. 6510

Pre investment cost/Investment Ratio – 38%

Impact indicators

Number of direct beneficiaries – 20 (at the start of the project)

Investment size/no. of beneficiaries – Rs. 850

Project Risks

Project owner/operator risk:

CRWCWS have been involved in a lot of projects before. Even after the two months period, CRWCWS is planning to transfer it to a woman entrepreneur and keep monitoring the enterprise.

Market risk:

The market risk seems to be less as there are more than 20 shops in Jagalur. Initial response by the hawkers seem to be positive towards the light. Moreover, the rental of Rs 5 is a good rate for such good quality of light for the hawkers.

Technology risk:

There is a technology risk as Flexitron lights are relatively untested in the market. However, a period of 2 months should be good enough testing time for us to ascertain the quality and impact of the technology.

Portfolio risk:

There is no portfolio risk.

Mission risk:

There is no mission risk.

Partners

CRWCWS and Flexitron