Rmai Fr Ximb(Rural Managemnt Sandeeppatil

8/9/2019 Rmai Fr Ximb(Rural Managemnt Sandeeppatil

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Background Of The study

India is a land of arts and artisans. It has earned name and fame for the wonderful artistic

works and materials manufactured by the committed and devoted artisans. It is a matter of

great pleasure to witness that artisan sector is not confined to a few states of the country but it

encompasses almost all the states of the country. All of us know that rural artisans play animportant role in the economy of the country like India. Artisan units use locally available

raw materials, work on them with simple tools and sell their products in a local market, or if

any market linkage is available then sell in organized or modern markets. Artisan sector plays

an important role in the pattern of industrial development .The development of artisan is a

means of promoting large scale employment and is also a means of meeting the demands for

consumer goods. The industrial policy statement of 1980 states that The government is

determined to promote such a form of industrialization in the country that promotes such

form of industrialization in the country that can generate economic viability in the village

However in recent years these units have come across with several problems, particularly

after the manufacturing of machine products. Of the various problems that the artisans have

faced the major hurdle is that of finance. On account of the decay of the patronage by the

Rajas, Maharajas, Jamindars and the exploitative characters of local money lenders, the

artisans have felt dearth of finance. Apart of the major problem of finance they face the

problems such as lack of skills, less exposure to info & tech., lack of formal training, absence

of non-farm policy, marketing support, non-competitive products, unable to sustain

competition, application of traditional left over technologies etc.


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Background Of The Company FINO for which the study was carried out:

FINO (Financial Information Network and Operations) is the largest Business Correspondent

in the world. The company was founded with the single objective of building technologies to

enable financial institutions (FIs) and to serve the under-served and the unbanked sector and

also to service the technology requirements of entities engaged in servicing the bottom of thepyramid customers. In India it is present in 233 districts of 22 states with a customer base of

nearly 1.8 crores. The company provides end to end technology and operational solutions to

financial institutions, revolutionizing the way their services reach the base of the pyramid

citizens. FINO has its own network of agents (Business Correspondents) at ground level and

also works with several partners to reach the remotest parts of the country. These business

correspondents are called as Bandhus in their respective areas and the company is having

more than 10000 such Bandhus all over the country and some of them are women from the

villages itself. Company has realized that these customer service providers are a very critical

part of the delivery chain and customer experience. Hence company invests aggressively in

their training, insurance benefits and has a code of conduct for them to ensure lower risk and

better customer experience. There is certain criteria for their selection and once selected they

are given training on the basic aspects of finance such as book keeping, budgeting, cash

management etc.The training also gives equal emphasis on people management and other

skill set building.

Objective of the Study

The study was conducted to check the feasibility analysis on how FINO can use its strong

distribution of Customer Service Providers to make appropriate linkages in terms ofFinancial

and Marketing for the rural artisans (Kondapalli Toys Makers) and to replicate the same

model in the entire country.

The study also involved the probable plan of action and strategy for the company through

which it can help the rural artisans as well as help its customer service providers to increase

their own income.

Area of the Study

The study was conducted in the Krishna District of Andhra Pradesh and the target artisan

community selected was Kondapalli toys makers .The reason for this selection was that FINO

as a company is well established in the entire district with more than 1100 customer service


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providers and the place is close to the markets such as Vijayawada and Hyderabad in order to

make forward linkages.

Methodology of the study

Data was collected on techno-economic status of Kondapalli artisans of this region to find

their educational, economic, technological levels through personal interactions with them.

The field study has been undertaken with the help of a questionnaire and a sample of 150

Kondapalli toys artisans was selected for eliciting relevant information from them .Besides

this officials of institutional credit agencies and the NGOs working for rural artisans were

interviewed personally to elicit their opinion on certain issues having bearing on the study .

Overview of Toys Industry in India

The size of Indian Toy industry is about Rs.4000 crores of which Rs.1500 crores the

organized sector while Rs.2500 crores comes from the unorganized sector. Indian Toy

industry is characterized by small-scale establishments and is highly labour intensive. There

are approximately 2000 manufacturing units consisting of micro (1500 units in cottage

sector) small & medium (450 units) and large (about 20) units operating in the sector.

Kondapalli toys are being famous for being eco friendly and different from others .Made out

of softwood known as Tella Poniki, the toys of Kondapalli utilize sawdust, tamarind seedpowder ,enamel gums and watercolors in their production.Kondapalli artisans are famous for

their output of life-like, thematic carved sculptures depicting rural life, deities and animals.

The artisan families of Kondapalli and surrounding villages near Vijayawada belong to a

community known as Arya Kshatriyas, who had migrated to Kondapalli from Rajasthan in

the 16th century.

The toys have a definite grammar of color composition of their own, and a reflection of

native rural life. The theme of Kondapalli toys is of three distinct categories: animals and

birds, male and female figures depicting various forms of rural-life and mythological figures.

The uniqueness of the toys of different animals, birds and human figures reflect dignity of

expression. Traditional toys include figures from Hindu mythology and popular village

themes.


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Organization Structure of the company in the area of study

The organization structure of the company is similar to PRI institution who works in the rural

areas and it is very important to understand it for the implementation of the above project.

Outcomes or Findings Of the study

It was found that artisans in the area were not aware about various rural development

functionaries such as R&D institutions, financial institutions, marketing institutions and

training institutions. Some of the other key findings of the study were as following

y Almost 64 % of the artisans family are leaving under the below poverty status in thearea.

y Of the artisan community almost 40 % are now working under National RuralEmployment Guarantee Scheme and left their toys making work.

y More than 65 % of the artisans are facing the problems of finance and not able toscale up their operations and marketing linkages due to shortage of credit.

y There are very few artisans who are actually sending their toys in the outside marketand rests are dependent on the local markets for the same.

y Some of the artisans have taken loan from the local money lenders at an interest rateof almost 60 %

y Almost negligible artisans are covered with insurance schemes and this percentage iseven less than 20 %

Zonal Office (Hyderabad)

District Coordinator

(Krishna)

Mandal coordinator

(Ibrahimpatnam)

Customer Service Providers

(all villages in the mandal)


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y There is a society named as Kondapalli Toys Manufacturers Mutually AidedCooperative Society which is supposed to take care of the marketing activities of the

toys makers but this society also severely needs funds for existence.

y The society doesnt even have its own website for the marketing of the toys.

Approach to be adopted by FINO as a company

The approach which was suggested to FINO is the MARTS 3 M (Microfinance, Micro

market and Micro planning) livelihood promotion model as it was evident from the base

study that most of the problems can be solved by providing financial and marketing linkages

for the toys making artisan in the region and for this planning at the micro level is very

important and once successfully implemented the model then can be successfully replicated

in the other parts of the country. The other reason for adapting this model is the nature of the

company where which can easily leverage upon its network with different banks as it has

already tie up with banks such as Axis bank and other Public Sector Unit banks (Union Bank

Of India) and if we seen the contribution of Axis bank which is the major partner or client of

FINO in the district is less than 2 % to the total credit disbursement.

The unique feature of the implementation of the entire project will be that the main centre of

activity or planning center will be in the villages in the form of customer service providers of

the company .So they will be responsible for all the activities which are to be carried out in

the different phases of the project .So there will be ultimately capacity building of the rural

people and it will also increase the overall income level of the artisans as well as the rural

representative of the company so it will ultimately result into multiplier effect in the local

area and economy.


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Stakeholder analysis and their interests

Stakeholder Objective

/Interest

Strength Weakness Potential

Kondapalli toys

makers

*To get proper

financial and

marketing

linkages to

improve the

current situation

*Skill

enhancement &

modernization

in the current

production of

toys

The strength lies

in the making of

unique products

of its type

Facing financial

as well as

forward linkages

problems

The toy industry

has a great

demand in the

local ,national

and international

markets

FINO *Increase its

operations

through linkages

with proper

banks

*The

implementation

of the project

will increase the

current

remuneration for

all the customer

service

providers in the

area as it is

based on the

amount of

*It is the largest

in its business in

the country.

*Good

reputation

among the banks

as well as

government

Currently only

in providing

financial

services

Can diversify

itself into other

form of viable

and feasible

business


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transaction done

by them

Axis bank * Increase its

customer base as

well as market

penetration in

the rural area.

* Cost reduction

in the operations

as it will be

working with

the FINO with

business

correspondent

model

* Increase in the

contribution to

the credit

disbursement

which is

currently less

than 2% for the

entire district

One of the

major private

bank in the

region

Less number of

physical

branches

available in the

region

Can use the

artisan base to

increase its

penetration

through suitable

products

Kondapalli Toys

Manufacturers

Mutually Aided

Cooperative

Society

To see the best

that can happen

with the toys

makers

*It is also facing

financial crunch

*Heavily

dependent of

external sources

Can be use as

effective

medium for the

development of

the artisans


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Actual Plan of Action For the i lementation

As ri tl sai t proj t wit out a formal planning process is li e a ship without a

destination so itis very importantto plan the projectin a right direction and forthatthe entire

planning process is divided into three phases as

Pyramid showing three phases ofimplementation

The entire implementation plan is divided over a one year time span .Prior to the actual

implementation of the phases the customer service providers of the company will be given

training in the different aspects related to the project. The various activities are identified as

follows in the different phases of the implementation and the timeline for the same can be

explained with the help ofProject Planning atrix.

Phase Activities Objectively

Verifiable Indicators

Timeline for

implementation

inancial Linkages 1)Awareness

generation by

Customer Service

Providers of INO

2) ormation of

clusters

1)Artisans positive

response towards the

activities

2)Number of artisans

included

3)Amount of loan

The entire phase

should be completed

in the three month

of time span starting

from the awareness

generation up to

Fin n i l Lin k s

Hu n sous s d lop nt nd skill

up d tion

k tin link s


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3)Introduction or

induction to different

banks offerings or

products

4) Customer

acquisition though

KYC norms

5) Providing or

disbursing the

amount

6)Keeping the

records of all the

transactions done by

the artisans

received by the

artisans

4)Money invested for

productive purpose

by the artisans

actual money

invested in the

business

Skill up gradation of

the artisans as well as

the business

Collaboration with

the organizations

such as

1) The Design and

Technical

Development

Centre(Bangalore)

2)Crafts Council of

India

3) National Institute

ofFashion Tech.

Carrying out

workshops with the

help of above

mentioned

organizations

1)Number of such

workshops

happening and the

number of footfall of

artisans to these

workshops

2)Change in the skill

set of the artisans

The timeline of this

phase will be ofsi

months as this is the

most important phase

of the entire

implementation


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develop new and

striking designs

Making marketing

linkages

1)Formation and

maintenance of

website

2)Tie up with

organizations such as

Chitrika

3)Convenience its

partners to use these

toys as corporate

gifts for the festivals

4)Convenience its

employees to do the

same

5)Finding linkages

on a national level

1)Number of such tie

ups

2)Number of toys

sold after all these

activities carried out

The time line for this

phase will be kept as

three months

Financial Aspects of the project

There will be an estimation for the total amount required for the completion of the project and

budget will be allocated to carry out different activities .Once the artisans will get the amount

from the bank there will be formation of common fund by keeping a minimum amount that

will be contributed by each toy maker .Attempts will be made to form partnerships with the

corporate working in the area to help for the same reason. The FINO as company will also

invest certain amount in the entire project as it will involve income increase activities of its

customer service providers as they will be the centre of activity at the village level for the

planning and execution of the entire project.

All the above factors combine to create a unique value proposition for artisans & at the end of

a given financial period when we equate the costs incurred with the revenue generated we

shall be able to gauge the success/failure of the model. The model has been proven profitable

& sustainable in the various financial evaluation parameters with the breakeven point being

achieved in the 1st year itself.


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Bibliography

www fino co in

http://andhrabank in/scripts/slbc asp

http://www sadhan net/Adls/Microfinance/MIS/OrganisationalManagementPlaning pdf

http://www hindu com/2006/01/18/stories/20060118 00890200 htm

http://www nistads res in/indiasnt2008/t6rural/t6rur5 htm

http://www chitrika org/

http://www martrural com/

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Rmai Fr Ximb(Rural Managemnt Sandeeppatil