A201 Chilli Powder Unit with woman entrepreneur through NGO NEEDS, Nukapur, Haveri District, Karnataka

Project Dates:

Implementation Start: September 2008

Project Details:

This project involves investment in a 1HP chili pounding machine for an entrepreneur, Ms. Channabasamma Somanakatti, in the village of Nukapur in Haveri District. The project was identified by the NGO NEEDS (Navodaya Educational and Environment Development Service) in Ranebennur, Haveri District. The project will be implemented and monitored jointly by S³IDF and NEEDS.

The Entrepreneur is a member of Sri Krishnadeveray SHG, which was formed in 2006. She does weekly savings of Rs. 10/-. She has completed SSLC, is the first representative of her SHG, and has an active interest in taking up this micro enterprise. She approached NEEDS with her request earlier this year and NEEDS has connected her with S3IDF for business development support.

The entrepreneur is deeply familiar with the village of Nukapur and surrounding villages of Hnaumapur, Kuragund, and Madavarayapur, an area which is home to approximately 1500 families. Through informal surveys, the entrepreneur has determined that there is a lack of chili powder grinding infrastructure in the local area. Villagers who grow or purchase chilis must travel relatively long distances to have those chilis ground into powder. Thus, as a primary line of business, she plans to provide chili pounding services to local households. Households will bring their raw material, and she will provide grinding services at a rate of Rs. 10/kg. She will be able to work six hours in a day and can process 15 to 20 kgs per day.

As a secondary line of business, the entrepreneur will process and market her own branded chili powder. She plans to purchase chilis in wholesale from Ranebennur and/or Byadgi and grind powder to market to local schools as well as shops and hotels in the village and nearby Ranebennur. Initially, she will market 200kgs of her own chili powder per month at Rs. 80/kg, a competitive retail price.

Project Financials:

http://spreadsheets.google.com/pub?key=pwRdPi0mYDcKvgmcfOIibQA

Project Size Details:

The chili pounding enterprise will service the approximately 1500 families living in the area of Nukapur and surrounding villages. 15 to 20 kgs will be ground per day. Additionally, the entrepreneur will manufacture and market approximately 200kgs of branded chili powder per month.

Project Impact Details:

The project will benefit the entrepreneur, as well as families in the local area who will now have the convenience of producing chili powder from their own chilis locally for a reasonable service fee. .

Estimated Pre-investment Costs:

Total Costs- Rs. 9785

S3IDF costs

Personnel Costs – Rs. 9185

Other costs - Rs. 600

Total S3IDF costs – Rs. 9785

Returns for S3IDF Revolving Fund:

12% returns on a reducing balance basis

(By mutual agreement, 8% of the total project cost will go to NEEDS to cover their preinvestment and monitoring work for this particular project and to cement a positive relationship with S3IDF.)

Project Indicators:

Investment Indicators

Investment size – Rs. 34,265

Revolving fund – Rs. 27,412

RF to investment size – 80%

Cost Indicators

Total pre investment cost – Rs.9785

Pre investment cost/Investment Ratio – 29%

Impact indicators

Number of direct beneficiaries – 1

Investment size/no. of beneficiaries – Rs.27,412

Project Risks:

Project owner/operator risk

Ms. Somanakatti is a new entrepreneur and is establishing a brand-new business, rather than expanding on an existing one. However, she has been recommended after a rigorous selection process from NEEDS (i.e., of the 60+ SHG groups that NEEDS works with, she is one of the most active and responsible members of one of the best-performing SHG groups). She is active and consistent in her savings and is the first representative of her SHG group. After conducting the necessary market survey, Ms. Somanakatti came to NEEDS herself seeking support for the new business, and was intent on establishing the enterprise in any way possible, demonstrating her ambition to make the enterprise a success. For those reasons, we believe the entrepreneur risk is minimized.

Market risk

The entrepreneur is highly familiar with the local market of Nukapur and surrounding villages. She has identified a latent demand for local chili grinding services, as most families must travel a minimum of 15 km to Ranebennur town to grind the chillis they purchase in markets or grow locally. Risk is that demand is either overestimated or highly seasonal, leading to inconsistency in revenues. However, the risk of overestimated demand is mitigated by the fact that the entrepreneur knows the market so well, and the risk of seasonality is mitigated by the fact that the entrepreneur has a secondary line of business in the marketing of her own branded chili powder.

Technology risk

Required machinery for the enterprise is a standard 1HP chili pounding machine, a tried-and-true technology. Machinery will be provided by a reputable technology supplier offering reliable servicing. The machine does require routine maintenance, but the entrepreneur will be instructed on maintenance practices and monitored closely in this regard. Thus, technology risk is low.

Portfolio risk

This is a very small investment, meant to be a trial project to explore potential future collaborations with NEEDS, so portfolio risk is low.

Mission risk

This is without a doubt a pro-poor project, so there is no mission risk.

Partners:

The entrepreneur, Ms. Somanakatti, and NEEDS NGO in Ranebennur.

A70: Restructuring of Hawkers’ Light Point Expansion at Belgaum, Belgaum district, Karnataka

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.

A198 Provision of efficient and smokeless clay stoves in Siddehalli and Mustur villages, Chitradurga District, Karnataka

PAD at
http://docs.google.com/Doc?id=dft8hdgq_11f8d5nqch

Financials at
http://spreadsheets.google.com/pub?key=pwRdPi0mYDcKY1o10eQZFDw

A75y Provision of transportation service for infrastructure device sales in Chitradurga and Bellary District, Karnataka

PAD available at
http://docs.google.com/Doc?id=dft8hdgq_10dxb35zgp

Financials available at
http://spreadsheets.google.com/pub?key=pwRdPi0mYDcIT2_JNKr6KNQ

A197. Support for Productive end-use and and Livelihood Ventures via NGO Spoorthy at Mysore and Chamrajnagar districts, Karnataka

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

A187 Hawkers Light Point Project in Banashankari (Restructuring)

New cash flows applicable from June 2008.

http://spreadsheets.google.com/pub?key=pwRdPi0mYDcLy5OLFmU6AWA

A75ac- LPG Connection financing at Jaglur and Kanahosalli

A75ac- LPG Connection financing at Jaglur and Kanahosalli

Project Dates

Project Approval Document – August 4, 2008

Project Photos

Project Details

• The project is an expansion of A75u, A75w, A75ab. Through these three projects, 146 customers have been given connection financing at Nayakanahatti and Jaglur through our infrastructure shops. Another 19 customers are still to be given the connection financing loans, which will be done by end August 08.
• There is a great demand for LPG connection financing. The supply has again opened up and another 100 customers can be given. Most of these new customers have already taken loan from S3IDF for household infrastructure products such as pressure cookers, coin phones etc.
• Since we have the infrastructure for giving and collection in place, this can be done easily.
• There have been no defaults till date. Of the Rs. 595000 repayment that needs to be made to S3, Rs. 2,79,000 has already been repaid by customers, which makes it 46% of the total repayment amount.

Project Size Details

The size of the project will be as follows:

Location	Number	Price of 1 connection	Total Project Cost
Jaglur	60	5300	318000
Kanahosalli	40	5300	212000
Total	100		53000

Project Financials

Main Spreadsheet

http://spreadsheets.google.com/pub?key=pwRdPi0mYDcKbJDsN_ZzDNg

Revised repayment schedule, put on Oct 28, 2008

http://spreadsheets.google.com/pub?key=pwRdPi0mYDcK3pTMds-gdNg

Project Impact Details

The project will provide LPG for cooking to 100 households. The impact of the project will be access of LPG cooking to 100 poor households.

Estimated Pre-investment Costs

Total Expected Costs – Rs. 7340

S3IDF costs

Personnel costs – Rs. 3340

Other costs –

Total S3IDF costs – Rs. 3340

Partner costs

Personnel costs – 2000

Other costs - 2000

Total Partner costs – 4000

Returns for S3IDF Revolving Fund

10% flat annual returns;

17.75 % returns on a reducing balance method

Project Indicators

Investment indicators:

Investment size – Rs. 530000

Revolving fund – Rs. 400000

RF to investment size – 75%

Cost Indicators

Total pre investment cost – Rs. 7340

Pre investment cost/Investment Ratio – 2%

Impact indicators

No. of direct beneficiaries – 100

Investment size /no. of beneficiaries – Rs. 5300

Project Risks

Project Owner/operator risk:

The operator is Chaitanya microfinance. This is a new microfinance institution. So there is a risk associated with a new comer. However, Chaitanya has done multiple projects with S3IDF and their repayments have had no problems. Hence this is not such a big risk.

Market risk: There is no market risk

Technology risk: There is no technology risk

Portfolio risk: There is no portfolio risk

Mission risk: There is no mission risk

Partners

Chaitanya, local LPG suppliers in Jaglur and Kanahosalli