Project Update

Moving poor households out of poverty Action Research Project on Impact of Micro-credit

July 15, 2013

Project Status Report 15 July 2013 Moving poor households out of poverty Action Research Project on Impact of Micro-credit

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Field Mentor Workshop Mentoring of beneficiaries in key to the success of this project. The objective is to build knowledge, attitude and skills of 50 beneficiaries at each location to enhance their income and scale up their businesses. It is also expected that the mentoring will also help in micro-enterprise development for some of them. The field mentors will play a crucial role in skill development of the beneficiaries. It is therefore important that the field mentors should not only have good community rapport and understanding of local dynamics but also should be equipped with skills which will help them mentor the beneficiaries. Keeping the above in mind a total of 6 staff members, 2 from each field partner location have been identified for this role. The identification of 2 mentors at each location is to ensure that there is continuity in case one of them leaves mid way. Following field partner staff members have been nominated for skill development and attended the training workshop. S.No. 1 2 3 4 5 6 7 Name Santosh Kumar Manish Kumar Mishra Rajiv Tiwari Shivraj Singh Mohan Mehetre Nagorao Bidwal Neilofer Khan
(Special Invitee)

Organisation Jeevan Jyoti Kala Kendra

Location Muzaffarpur, Bihar

Shakti Mahila Sangh

Majholi (Jabalpur), Madhya Pradesh

Samagra Gram Vikas Kendra

Pusad (Yavatmal), Maharashtra

Bal Vikas Mahila Samiti

Gwalior, Madhya Pradesh

The 5 day residential training was organized at Nagpur from 25th to 29th June, 2013. During the training various topics relevant to entrepreneurship and business were covered which include business plan development, marketing, cash flow statements and break even analysis. Some the main areas covered during the training and the expected outcomes are as follows: S.No. 1 Session Micro-credit and microenterprise development approach for economic empowerment Objective To acquaint the FMs with role of micro-enterprises & value chains in economic empowerment Expected Outcome FMs internalize the importance of the role of micro-enterprise & value chains in perspective of overall objectives of the rang de research program

Project Status Report 15 July 2013 Moving poor households out of poverty Action Research Project on Impact of Micro-credit

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S.No. 2

Session Challenges in transition from micro- credit to micro- enterprise development and Expectations from FMs Role of selected beneficiaries enterprise development

Objective Enable FMs to internalize the challenges & their roles to develop micro- enterprises in their project are

Expected Outcome The FMs adapts towards facing the challenges

To enable the FMs to acknowledge the strategic role of women beyond household work

The FMs understand the managerial and risk taking abilities of beneficiaries already displayed at household level and which can be applied in enterprise as well. The FMs are able to undertake feasibility exercise for enterprise selection and come up with a business plan for the selected beneficiaries based on the information gathered.

Enterprise Planning SWOT Analysis Market Feasibility Costing and Pricing Break Even Analysis

To enable the FMs to undertake the feasibility test of the business and prepare a business plan

Establishing an enterpriseResource Mobilization and organizing production/services Market & Marketing 5 Ps of Marketing Critical aspects of Marketing (Branding, Positioning, USP, market segmentation, customer relations) Market Survey, tapping markets

To enable the FMs analyze the financial & non-financial resources required for an enterprise To make the FMs understand the concept of market and marketing practices which could be taken up for selected product, draft a marketing plan for the promotion of the products/services

The FMs are able to analyze the financial & non-financial resources for enterprise establishment The FMs can articulate the market & marketing concept. They are able to draft a Promotional Plan for a product/services

Understanding business challenges

To empathise with the borrowers to understand their businesses and challenges

FMs will be able to understand the businesses in a better manner in order to offer their services.

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In addition to the above there were group discussion and role playing sessions to ensure that the trainee field mentors understand the business concepts and are ready to implement the learnings in the field. During the course of the training and beneficiary identification process, the teams came across a few challenges. The challenges and ways to resolve them were also discussed during the workshop which are summarized as under: 1. There are variety of businesses ranging from animal husbandry, dairy, fisheries and petty shops spread across a few beneficiaries. It will be a challenge for business mentors to provide business specific mentoring services. For example mentoring services for poultry farming will be very different from fisheries or goat rearing. Solution: The field mentors will have to work hard to identify the business problem and its resolution. In few cases the field mentors may have to reach out to local resources for technical trainings for example fisheries, poultry etc. 2. The beneficiaries had been identified with respect to income and other criteria as per the project plan and not with respect to their entrepreneurial attitude. In some cases the beneficiaries may not be ready for being mentored. Solution: In such cases the mentors are expected to counsel and help mentees understand the importance of services being provided. 3. In most of the cases the beneficiaries have existing businesses for which even basic accounting records are not being maintained, in such cases measurement of income levels challenge. Solution: In such cases it has been advised to ascertain monthly turnover and profit margins to arrive at monthly income levels for the household. For example a petty shop with a daily sales of Rs.1,000-Rs.1,200 may have a monthly turnover of Rs.36,000 but with a margin of 8%-10%, the profits will be in range of Rs.3,600 per month. 4. The data relating to business will be collected monthly and quarterly from the beneficiaries. It is expected that field mentors will help the mentees in maintaining basic sales and expenditure records. However, the other group of 50 beneficiaries is not being mentored and therefore will not have understanding of record keeping and therefore getting information from them with respect to their businesses will be a challenge. Solution: One of the ways it can be resolved is to provide basic record keeping training to all the beneficiaries. 5. The field partners will have to incur additional cost on human resource, travel and related expenses in the mentorship project which is over and above the normal cost of operations for Rang De portfolio. Solution: We hope to resolve this by allocating a certain portion of administrative budget to the field partners in order to meet these costs. 6. This being a 3 year project there can be drop outs from the program in long and short run 4 6

Project Status Report 15 July 2013 Moving poor households out of poverty Action Research Project on Impact of Micro-credit

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Solution: It is to be ensured by the field partner and field mentor that there should not be any dropout post training of beneficiaries and before disbursement of funds. Special focus should be on identification of right candidate for the program.

Pictures from Field Mentorship Training Workshop

Trainees listening to the talk

Learning Business plan development

Trainers listed down various activities identified by field mentors

Participant clarifying their doubts

Training session

Group photograph of participants

Project Status Report 15 July 2013 Moving poor households out of poverty Action Research Project on Impact of Micro-credit

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Post field mentor training activities Business Plan Development The field mentors are in the process of preparing business plans for 50 beneficiaries who will be mentored as a part of the project. The business plan will include information about the proposed business, credit requirement, revenue streams, cash flow and business mentoring services required. It is to be noted that business plans will be prepared individually for all businesses however common business plan will be developed in case where group members have planned to work together. A copy of business plan from a beneficiary from Bihar is attached for your reference. Training of beneficiaries Once the business plans have been developed. A field level 2-3 days training for 50 beneficiaries at each location will be organised. The training will be provided keeping in view the local requirements and will include the following: Differentiation between livelihood framework and enterprise framework Identification and selection of an appropriate enterprise Concept of market and marketing Value chain analysis Formulating business plan Feasibility and break even, SWOT (Strength Weakness Opportunity and Threat) analysis.

The training of the beneficiaries are expected to be complete by the end of this month following which funds will be required for disbursement. We will be sharing the dates of training and later updates from the field next month. Fund Disbursement The funds will be disbursed to all 300 beneficiaries post training. The disbursement is scheduled in first week of August, 2013.

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