A205 Hawker Light Point Project in Nelamangala, Bangalore, Karnataka

The Project approval document can be found at-

http://docs.google.com/Doc?id=dft8hdgq_12fc4g3xsk


The project financials can be found at-

http://spreadsheets.google.com/pub?key=pwRdPi0mYDcI42Cu3i6ZMfA

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

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 showed willingness to give Ravi a loan of Rs 1,00,000 with partial guarantee by S3IDF for 25% of the loan amount. The loan tenure was to be for 3 years.

However at the last stage of processing of the loan, SBI rejected the loan application citing depreciating equipments and batteries and the risks associated with it. Srinath Aithal and Ravi also approached Malaprabha Grameen Bank to secure transfer of the loan from Srinath to Ravi. However, the bank was not agreeable to the same.

Srinath Aithal and Ravi next approached S3IDF for direct financing. However, seeing the risks and efforts involved in the same, S3IDF suggested that Srinath continues the project and the loan while slowly transferring the project to Ravi. Therefore, Srinath Aithal has decided to continue the project as well as the loan.

Therefore, the project details remain the same. Meanwhile, Srinath’s payments will be monitored so that our FD is released at the earliest.

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

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