Pochampally Chenetha Kalanetha 020708

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Pochampally Chenetha Kalanetha 020708

  1. 1. Srijan Microfinance Business Plan Competition Final Round Presentations, 3 July 2008 Pochampally Chenetha Kalanetha (start up) Pochampally Chenetha Kalanetha Collectives Business Plan (2008 -2011)
  2. 2. Overview <ul><li>Entrepreneurs’ profile </li></ul><ul><li>Business Proposition </li></ul><ul><li>Financial Analysis </li></ul><ul><li>Management and Human Resources </li></ul>
  3. 3. Entrepreneurs’ Profile
  4. 4. Entrepreneurs’ Profile <ul><li>G Muralidhar – Project Lead </li></ul><ul><li>Murali Vepoor – Project Coordinator </li></ul><ul><li>Supported by a multidisciplinary team with 100+ person years of experience in livelihoods domain </li></ul><ul><li>Motivated by a desire to apply the livelihoods principles and interventions for the benefit of the poor and the marginalized. </li></ul><ul><li>Familiar with most of the weaving clusters in and around Andhra Pradesh. </li></ul><ul><li>Associated with the work of several NGOs and weaver leaders in Pochampally cluster. </li></ul>
  5. 5. Entrepreneurs’ Profile <ul><li>G Muralidhar – Project Lead </li></ul><ul><ul><li>20 + years of experience as Development Management Professional; Livelihoods Thought Leader </li></ul></ul><ul><ul><li>Intense exposure and experience in diversified livelihoods portfolio – NTFP, Dairy, Oilseeds, Paddy, Handlooms, Watershed Development, Tribal Development etc. </li></ul></ul><ul><ul><li>Instrumental in linking collectives with markets </li></ul></ul><ul><ul><li>Core competency in building/nurturing/ supporting people and organizations at various levels, that work with the poor </li></ul></ul><ul><ul><li>Specific experiences include: </li></ul></ul><ul><ul><ul><li>State Project Advisor, Livelihoods - SERP </li></ul></ul></ul><ul><ul><ul><li>Member of the core team of NDDB-MIO </li></ul></ul></ul>
  6. 6. Entrepreneurs’ Profile <ul><li>Murali Vepoor – Project Coordinator </li></ul><ul><ul><li>13 + years of experience in working with People’s Projects like Watersheds, UNDP, Velugu/IKP, NREGA etc.; People’s Projects Facilitator </li></ul></ul><ul><ul><li>Core competency include participatory methodologies, CBO visioning and strategic planning </li></ul></ul><ul><ul><li>Specific experiences include: </li></ul></ul><ul><ul><ul><li>collectivizing the poor producers in Mahabubnagar </li></ul></ul></ul><ul><ul><ul><li>collectivising the poor in Pochampally and coordinating the ETP Project, Defluoridation plants and Zero-waste planning </li></ul></ul></ul>
  7. 7. Akshara <ul><li>Akshara Network is a not-for-profit development support organization initiated by practicing development management professionals to fulfill the need for affordable and timely professional support to individuals and organizations in the development sector. </li></ul><ul><li>Key Achievements – </li></ul><ul><li>Outreach 20+ million poor families </li></ul><ul><li>10000 + inducted into livelihoods thought & practice </li></ul><ul><li>Worked with 100 + organizations </li></ul><ul><li>Worked in 12 States in the country </li></ul>
  8. 8. Business Proposition
  9. 9. Business Concept Pochampally Current Reality <ul><li>Weaving cluster </li></ul><ul><li>Not remunerative for Weavers </li></ul><ul><li>Weaving is one of the livelihoods </li></ul><ul><li>Push & Pull migrations are prevalent </li></ul><ul><li>Non-weaving communities into weaving </li></ul><ul><li>Movement from Cotton to Silk </li></ul>
  10. 10. Business Concept Livelihoods Framework <ul><li>Livelihoods is the Play of Six Capitals (natural, physical, social, human, financial and spiritual) towards Four Arrows (income, expenditure, employment and risk) within Four Contexts (ecological, techno-economic, distribution and income-expenditure pattern) </li></ul>
  11. 11. Business Concept Proposition <ul><li>Work with the entire poor in the village and not just with poor weavers </li></ul><ul><li>Solution through Pochampally Chenetha Kalanetha </li></ul><ul><ul><li>Enhance capacities of the poor to place them on the cutting edge of the market; </li></ul></ul><ul><ul><li>Build enabling infrastructure for the poor including collectives; and </li></ul></ul><ul><ul><li>Facilitate improved access to funds and various linkages for the poor </li></ul></ul>
  12. 12. Products and Methodologies <ul><li>Pochampally Chenetha Kalanetha offers the following products/services – </li></ul><ul><li>Promotion of in situ experimentation – to bring out newer designs and value added products. This initiative will help move the artisans towards the right side of value-chain </li></ul><ul><li>Building Collectives of the poor – to collectively manage costs and risks and to benefit from scale in procurement and sales </li></ul><ul><li>Access to leverage fund and linkages – to enable poor to break free from existing supply channel web </li></ul>
  13. 13. Products’ Road Map <ul><li>In situ experimentation – </li></ul><ul><li>Collectives will take up experimentation </li></ul><ul><li>Gurus will be identified and oriented </li></ul><ul><li>Gurukulams will be set up </li></ul><ul><li>Risks and costs will be supported </li></ul><ul><li>10 innovations in 3 years </li></ul><ul><li>Collectives – </li></ul><ul><li>Geographic/Product specific Collectives (2500 members) </li></ul><ul><li>Managed by professionals hired by Collectives </li></ul><ul><li>Handholding support by PCK initially </li></ul><ul><li>Funds & Linkages – </li></ul><ul><li>Rs.12.5 Million Leverage Fund to Collectives for meeting members’ credit and working capital needs </li></ul><ul><li>Rs.1.0 Million Risk fund to absorb risks in experimentation </li></ul><ul><li>Convergence, Bank Linkages, backward and forward linkages for Collectives </li></ul>
  14. 14. Areas of Operation <ul><li>Geographic Outreach in coming 3 Years – 50 villages in Pochampally cluster </li></ul>
  15. 15. Target Market and Customer Base <ul><li>Target Market – The Poor in the weaving villages of Pochampally cluster (including silk and cotton weavers, non-weaving artisans and other poor practicing other livelihoods) – 25000 families </li></ul><ul><li>Customer Base - For the plan period 2008-2011, the outreach will be 2500 poor families, of which weaving families will be more than 50% </li></ul><ul><li>Competitive Analysis – </li></ul><ul><ul><li>Currently there is no service provider offering end-to-end (production to market) integrated services like PCK </li></ul></ul><ul><ul><li>In weaving villages, most organizations work with only poor weavers but not with poor in general. Inclusive approach is absent which is the unique strength of PCK </li></ul></ul>
  16. 16. SWOT Analysis <ul><li>Strengths </li></ul><ul><li>Strong team with intense and wide development experience </li></ul><ul><li>Established experience in weaving villages </li></ul><ul><li>Partnerships </li></ul><ul><li>Weaknesses </li></ul><ul><li>Limited rapport with other villages in Pochampally cluster </li></ul><ul><li>Limited exposure to marketing channels like e-marketing etc </li></ul><ul><li>Threats </li></ul><ul><li>Artisans feel insecure to lose existing trade relations </li></ul><ul><li>Traders might engage in unhealthy competition </li></ul><ul><li>Opportunities </li></ul><ul><li>Recognized GI </li></ul><ul><li>Pochampally - a recognized brand </li></ul><ul><li>Niche market is not saturated yet </li></ul>
  17. 17. Social Impact <ul><li>By the end of the plan period – </li></ul><ul><li>Collectives servicing 2500+ families will have turnover of Rs.35+ Million </li></ul><ul><li>5 functional outlets, independently managed by the collective </li></ul><ul><li>10 design and process innovations tried out by the community in various livelihoods </li></ul><ul><li>Rs.2000 savings and Rs.10000 increase in income per target poor household </li></ul><ul><li>Access to cost-effective financial services </li></ul><ul><li>Significant risk bearing capacity of members </li></ul>
  18. 18. Financial Analysis
  19. 19. Growth Projections In three years: Coverage: Families  2500 Company Revenue: Rs.3.4 Million/year Collectives’ Turnover: Rs.25 Million/Year Additional benefit to members: Rs.25 Million/Year In the long-run (in a decade): 50000 families Company Revenue to cross Rs.10 Million/year Collectives’ Turnover to cross Rs.500 Million/year
  20. 20. Growth Projections (Rs in Million) 48 21 ROA % - Company + Collectives 144 108 SROI 10.7 10.7 10.7 8.5 5.5 Total Grants (cumulative) 19 4 Return on Assets % - Company Particulars 2008-09 2009-10 2010-11 2011-12 2012-13 INR INR INR INR INR Total Income 0.1 1.7 3.4 5.3 9.3 EBITDA (Earnings before Interest, Tax, Depreciation, Provisions)   -9.1 -3.4  -1.5 2.5 7.0 PAT   -9.2 -4.5  -2.7 1.2 5.6 Total Shareholders Funds (at-the-end-of-the-year) 8.8 8.8  8.8  8.8 8.8 Total Debts (end of the year) 0.0   10.0 10.5 10.5 10.5
  21. 21. Financial Ratios 8.75 Million Equity Requirement (INR) 10.70 Million Grant Requirement (INR) Particulars Current (or 2008/2009) 2011/12 (Projected) 2012/13 (Projected) Turnover Company (INR Million) 0.1 5.3 9.3 Turnover Collectives (INR Million) 1.0 58.5 108.0 Turnover Company + Collectives (INR Million) 1.1 63.8 117.3 Operating and administrative expenses/average gross turnover (%) – Company/Company + Collectives 9200/837 53/4 25/2 <ul><li>Profit after Tax / Gross Turnover (%) </li></ul><ul><li>Company/Company + Collectives </li></ul>-9181/835 23/2 60/5 Return on Assets (ROA) % - Company/Company + Collectives 4/21 19/48 SROI % 108 144 Debt to Equity ratio 0 1.21 0.80 Debt Requirement (INR) 10.55 Million
  22. 22. Management and Human Resources
  23. 23. Management and Human Resources Management Committee (5+2) (for review, e-support, finance and process support) from Akshara Project Lead Mgmt Oversight Project Coordinator COO/Team Leader Project Support (15) (for facilitation, documentation, resource persons) from Akshara Project Staff (16) Resident Manager Livelihoods & Marketing Managers Executives Accountants Other Staff Governance & Staff for Collectives Management
  24. 24. Way Forward <ul><li>For the interventions to evolve on a desired scale and deliver results to the 2500 Poor households, Pochampally Chenetha Kalanetha seeks – </li></ul><ul><ul><li>Rs. 30.00 Million over a period of 3 years as below: </li></ul></ul><ul><ul><li>Rs. 7.75 Million as Equity from Venture Capital </li></ul></ul><ul><ul><li>Rs. 10.55 Million as Loan from Venture Capital </li></ul></ul><ul><ul><li>Rs. 10.70 Million as Grant </li></ul></ul><ul><ul><li>The Loan shall be repaid over a period of 5 years from revenues generated through: </li></ul></ul><ul><ul><ul><li>Service charges from collectives </li></ul></ul></ul><ul><ul><ul><li>Interest on funds given to collectives </li></ul></ul></ul>
  25. 25. Thank You <ul><li>Pochampally Chenetha Kalanetha </li></ul><ul><li>c/o Akshara Network </li></ul><ul><li>HIG II B 25 F 6 APHB Colony Baghlingampally </li></ul><ul><li>Hyderabad – 44, Andhra Pradesh. </li></ul><ul><li>G Muralidhar – 9394843008 </li></ul><ul><li>[email_address] , [email_address] </li></ul><ul><li>Vepoor Muralidhar – 9849930037 </li></ul><ul><li>[email_address] </li></ul><ul><li>www.kalanetha.com </li></ul><ul><li>www.aksharakriti.org </li></ul>

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