Most Microfinance Institutions however have so far focused only on Microcredit products. A lot of the borrowers utilize this for income generating activities at an individual level. So while they are able to sustain themselves, there is no significant increase in their income levels over a long period of time.
A Micro Venture or microenterprise can be defined as a small business, requiring initial capital of no more than $20,000 and employing fewer than 10 individuals. Currently most microenterprises are individually managed, target local markets and work on a small scale.
The key enablers for success in micro-enterprises are:
1. Selection of appropriate products,
2. Quality control & packaging,
3. Direct links to markets
Most microenterprises stay small due to their inability to effectively implement the last two. There is a huge untapped potential in this space for smart microenterprises to create a quality product and scale up operations by developing direct market links.
Our Micro Venture proposal aims to become the next rung of the ladder and provide equity financing to take these micro-enterprises to take them to the next level. This program provides equity capital to build sustainable small businesses from an end-to-end perspective that will include identifying the right activity, training the individuals, monitoring and mentoring them, ensuring quality control and helping in marketing and sales of the end products.
Micro-Enterprises identified currently include:
a) Dairy and poultry farming
b) Vermi-composting and Bee rearing
c) Setting up of small computer centres
d) Setting up of provision (kirana) stores and other small retail outlets
e) Setting up of small bakeries or eateries
f) Processing of agricultural produce (arecanuts, tamarind, vanilla, cocoa etc.)
g) Setting up of tailoring, knitting shop
h) Manufacture of edible items like pickles, papads, masalas etc.
i) Rearing of ornamental fishes (gold-fish etc.)
j) Commercial goat rearing
k) Handicrafts, baskets, candles and agarbatti manufacture
We will identify the micro-entrepreneurs, the appropriate products, provide training and mentoring and market linkages for eventual sale of the products. We will also help the entrepreneurs to obtain government subsidies and other available infrastructural support (e.g. from NABARD, SIDBI etc.) in success of the venture.
Our ultimate goal is to ensure there is at least a 300% increase in the annual income level of each participating member at the end of 5 years.
Shalmala Finance is kicking off the Micro Venture program with two enterprises.