Embed Size (px)
Citation preview
VILLAGE PROJECT REPORT Kabilpur/Jogur/Balagachi/Borjumla
December 2015
Prepared by
Rehbar Financial Consultants
For
Rehab India Foundation
1
Table of Contents
Contents Executive Summary .................................................................................................................................................2
Interest Free Loans..................................................................................................................................................3
Sericulture investment ............................................................................................................................................4
Other Recommendations and Insights ...................................................................................................................4
Appendix .................................................................................................................................................................6
Kabilpur, Murshidabad ........................................................................................................................................6
Jogur, Murshidabad ......................................................................................................................................... 10
Balagachi, Murshidabad ................................................................................................................................... 13
Borjumlla, Murshidabad .................................................................................................................................. 16
Kabilpur 2nd Round - Sericulture ...................................................................................................................... 19
2
Executive Summary
In reality, the health of the economy of any country is not indicated by stock market indicators, such
as the SENSEX and NIFTY, but by the overall prosperity of the people of that country. Majority of the
people in India live in the rural areas, yet it remains neglected in majority of the budget outlays made
by the government as well as NGOs which are aimed at boosting the economy. This has led to an
exodus of people from the villages to the cities, accompanied usually by an increase in their level of
misery.
Rehab India Foundation has been working in villages across the country through Village Development
Programs, to improve the socio-economic conditions in these villages. Since May 2015, Rehbar
Financial Consultants has been working along with them towards the economic development of
these villages. The first project was conducted in 2 villages in the interiors of Andhra Pradhesh. This
second project was conducted in 4 villages in Murshidabad district of West Bengal, namely Kabilpur,
Jugore, Balagachi and Borjumla.
One learning from the first village project that was reinforced in this one was that the nature of the
economic activity in one village is very different from the other. Even though these 4 villages are in
the same district and at close proximity to one another, each one has its own peculiarities. To try
implementing a single solution across all villages would have disastrous consequences.
In the 4 villages that we studied, there did not seem to be too many opportunities to structure profit-
loss sharing investments. The reasons for this are two-fold. The size of the investment required in
most of the cases is too small to justify the amount of overhead and due diligence that would go in to
structuring and successfully executing a viable investment. Further, the businesses are generally not
profitable enough in their current form to sustain such an investment. Hence for such cases, we have
recommended interest free loans. These will provide sources of income for the promoter, and they
will be able to repay the capital on a monthly basis without much difficulty insha Allah. The total
recommended outlay for interest free loans is Rs. 1.65 Lakh to 11 individuals.
In Kabilpur, we are suggesting profit-loss sharing investment in sericulture with 3 farmers. The total
recommended outlay for this is Rs 3 Lakh. This investment will be important even from a
psychological perspective, as the farmers in these areas are stuck in their old practices, and hesitant
to try anything new, even if their practices are leading them to losses every time. By introducing
3
them to sericulture and providing them the know-how and finance required to try something new
and more profitable, we would also be encouraging them to innovate and think out of the box. This
trait, more than anything else we have analysed so far, is crucial for economic development of
villages.
Apart from these financial recommendations, there are some other important learnings from the
project, that we have included in the section of the report called Other Recommendations and
Insights.
Interest Free Loans We have recommended interest free loans (Qarz-e-Hasana) to 4 ladies in Kabilpur, 6 men in
Balagachi and 1 man in Borjumla. The reason why we feel that profit-loss sharing investments, such
as the ones we have expertise with at Rehbar will not be feasible here are twofold. The size of the
investment required in these cases are too small to justify the amount of overhead and due diligence
that would go in to structuring and successfully executing a viable investment. Further, the
businesses are generally not profitable enough in their current form to sustain such an investment.
The details of the loans we recommend and their details are as follows:
Name, Village Purpose Amount Monthly repayment Period (months)
Ms. Ala P Khatoon, Kabilpur
Working capital for tailoring
10000 400 25
Ms. Helena Khatoon, Kabilpur
Sewing machine purchase
10000 400 25
Ms. Akhtar Bibi, Kabilpur
Working capital for tailoring
10000 500 20
Ms. Farida Bibi, Kabilpur
Cow purchase for selling milk
20000 500 40
Gazlu Shaikh, Balagachi
Working capital for utensil trading
15000 1000 15
Ummer Ali, Balagachi
Working capital for garment trading
15000 1000 15
Azaad Husain, Balagachi
Working capital for utensil trade
15000 1000 15
Rafiq Saith, Balagachi
Working capital for spice trade
15000 1000 15
4
Mufeezuddin, Balagachi
Working capital for spice trade
15000 1000 15
Naushad Sheikh, Balagachi
Working capital for garments trade
15000 1000 15
Barikul Saith, Borjumla
Working capital for rice trading
25000 2500 10
Total: 1,65,000
Sericulture investment After discussion with farmers and understanding that traditional crops are causing them to incur
losses year after year, we met experts from Krishi Vidhan Kendran (KVK) who suggested that
sericulture and floriculture are more viable options in these villages. 3 farmers from Kabilpur - Md
Ishraf, Naimuddin, Mujeebur Rahman have agreed to take up sericulture in part of their land (3/10th
of an acre).
We have recommended profit-loss sharing investments of Rs. 1 Lakh with each of them. The
investment will go towards setting up the infrastructure necessary for sericulture, as well as financing
the first 6 months of the plantation process when they are not in a position to start earning from the
business. We have arranged training for them on the technical and financial aspects of this business
at KVK, and set up a village committee of 3 members to ensure the training, fund disbursal and
monitoring of the business goes on as expected.
The investment schedule for each of the farmers is as follows:
Months 1-4 Rs. 4,000/month
Months 5 and 6* - Rs. 42,000/month
*After progress inspection by the village committee appointed for the purpose.
Expected ROI from the project is 15% - Refer appendix for calculations.
Other Recommendations and Insights
Mills can be started to process the produce, such as paddy mills, coconut oil mills etc.
5
Conventional crops are not profitable in their current state, but having green houses and with the use of new
technology, agriculture in these villages can be made more profitable.
Initiatives should be such that their existing land is used rather than doing something completely different.
Dairy based activities can be considered. Lots of people have experience in rearing cows. However, it is not for
selling milk. They buy a cow and sell it later on, utilising the milk for house use only.
A striking similarity between all the women doing Beedi work is that none of them want to do this work but
due to the lack of alternate options and resources end up working anyway, even if that has an obviously
adverse impact on their health.
Rehab can conduct tailoring classes in Jogur, and other such villages, where preference should be given to
ladies who are already working, especially the ones who are doing beedi work as these are the hardworking
and dedicated one, which means lower risk of investment.
Whenever a new and profitable source of livelihood comes up, so many people adopt it due to the lack of other
options that the initial lucrativeness of this option is soon diminished. Tuk-tuk vehicle is a classical example of
that, where there already seems to be an oversupply.
Every year after the harvest, the farmers make a resolution that they will do something different from the next
season onwards, but on the onset of the next season, end up doing the same thing with the same exact
results/outcome. This vicious cycle needs to be broken one for all.
Sericulture is one step in the direction of encouraging out-of-the-box thinking and continuous skill upgradation.
These are crucial traits in remaining profitable in a copy-cat economy, like that existent in villages. If it is
successful, it can be replicated, and new areas can be explored with the help of subject matter experts.
6
Appendix
Kabilpur, Murshidabad
Kabilpur has a population of about 10,000 of which 200 families have been surveyed by Rehab India
Foundation. They have formed 2 self-support groups so far – 1 for women with 10 members and another for
men with 11 members. Rehab has a center where they give tailoring coaching to ladies.
Ala P Khatoon – She is unmarried, owns a sewing machine which had cost her Rs. 8k, has been taking the
tailoring classes at the Rehab center. Cost of raw material is Rs. 86 per piece (2 meter) and the gross profit is
Rs. 30 per piece. She needs 100 m of raw material for each round and would like to have the capital for atleast
2 rounds – comes to about Rs. 10k. She can sew upto 10 pieces per day implying an average monthly profit of
about Rs. 9k per month. Will be working for 6 hours per day. She wants to stop making beedis because of
which she has respiratory problems. She has been doing this for the past 2-3 years. Apparently, all the girls in
this village do this beedi work and have some or the other health problems. She does the beedi work for an
average of about 4.5 hours per day. She makes about Rs. 3000 profit per month making 1000 beedis in 1-2
days.
Recommended loan – Rs. 10,000
Amount to be returned every month – Rs. 400
From the sample of 7 girls who had come for the meeting, I came to know that all of them are involved in this
beedi work. Following were the numbers of years for which they have been working – 3 years, 10 years, 20
years, 10 years, 12 years and 3 years. Some of them complained of headache problems while some of them
complained about body pains.
Helena Khatoon – She is an orphan (father died) and her story is similar to Ala P Khatoon. She wants to buy a
sewing machine and also needs capital for raw material.
Recommended loan – Rs. 10,000
Amount to be returned every month – Rs. 400
Akhtar Bibi – She has a sewing machine and needs money only for raw material.
Recommended loan – Rs. 10,000
Amount to be returned every month – Rs. 500
7
Farida Bibi – She wants to buy a Jersey cow and sell its milk. She had earlier purchased a calf for Rs. 5k and
then sold it for Rs. 22k after sometime. She expects to get 5 litres of milk per day which implies a revenue of
Rs. 150 per day, cost of cattle food comes to Rs. 100 per day implying a daily gross profit of Rs. 50 – monthly
profit of Rs. 1,500.
Recommended loan – Rs. 20,000
Amount to be returned every month – Rs. 500
Meeting beneficiaries from Kabilpur
Meeting with Farmers:
Main Crops: Paddy, Jute and Wheat
Two Seasons:
Winter – Wheat, Mustard and Paddy
Rainy – Paddy and Jute
8
Rainy season – 4 months; Winter season – 5 months
Census: Mohammed Masood Alam
Owns 2 acres of land
Lichee ganda on 50%. Rest 50% is given to someone else since they are not many people in the family to work.
Depends on rainfall and borewell.
Taidul Islam
0.16 acre land near river
Does cultivate himself by getting water directly from river.
Crops: Jute, wheat and mustard.
Works in another field to earn and to finance his field.
Normuddin Sheikh
Owns 7 acres of land out of which he cultivates 5 acres himself and gives the rest 2 acres to someone else. His
farm is far from home and has 7 sons. He has not taken any loans so far as he never felt the need for them.
Grows Paddy, onion, wheat and mustard.
Has borewell only in 1 land and therefore buys water from other fields who have borewells.
Hashimuddin
Owns 3-acre land in 3 places out of which he cultivates on his own. Rest is given others because he has to
incur losses if he does this on his own as cost of labour is high. If he is able to work on his own, he will do it
else he would give it to someone else.
Abdul Hannan
Does not own a land and hence has leased 0.6 acre where he works by himself and if need be employs
labours. Paid Rs 42,000 as lease and does not pay rent.
Abdul Kabir
Does not own a land hence has leased 1 acre for Rs 15,000 for 1 year and will not get the money back. He
works by himself, grows vegetables and uses borewell for irrigation.
9
Mujeeb ur Rehman
Owns 0.6 acre where he works by himself growing paddy, wheat and mustard. As for water, he gets it from a
close-by river.
Luqman Shaikh:
Owns 2.3 acre where he works with his 9 sons growing paddy, wheat and mustard. Some of his sons also work
elsewhere.
Shoaib ur Rehman
Has leased 0.6 acre for Rs 10,000 where he works by himself growing paddy and jute. As for water, he uses a
borewell.
Emazuddin
Owns 2.6 acre where he works with his 2 sons growing paddy (0.75 acre), wheat and mustard.
He depends on rainfall and if need be uses water from a borewell from a neighbouring field
Naimuddin
Owns 2 acre land where he works by himself and if required even takes help from outside. He grows paddy
and vegetables. He depends on rainfall and if need be uses water from a borewell from a neighbouring field
None of these farmers have taken interest based loan as they come with very high rate of interest which are
very difficult to pay even if they sell their entire yield. They often lend to each other and take share of the
profit from the amount earned. They are unaware of banks and hence do not approach them for any kind of
loans to the effect that they have not a single person has taken an interest based loan for almost 25 years. The
income from agriculture is very low and hence cannot afford to even employ labourers on their field. Even
after working so hard, they are hardly able to make any money out of cultivation and hence many have
resorted to migrating in search of other forms of work and employment.
Most of the people who are still in this field are old people who get some sort of part time help from their
sons and relatives. Even then they are hardly able to generate any income. This just gets worse when there is
shortage of water and it has to be bought from neighbouring fields for close to Rs 100/hr. They will need a
minimum of 12 such hours 3 times during the entire season for as little as 1 acre of land. This being another
10
significant reason for high costs and very less income. With this, the handful of farmers who have a borewell
have seen some profits.
--------------------------------------------------------------------------------------------------------------------------------------
Jogur, Murshidabad
Population: 10,000 (mostly Muslims)
Survey Families: 200 (all Muslims)
Main activities :
- near 90% Migrant Labour (Delhi, Gujarat, Maharashtra, Kerala, Karnataka, Tamil Nadu etc.)
- Farmers
- Small shops
1. Ishmail Moliky
Drives a rickshaw in Delhi earning Rs 10-15k/month and is willing to stay back if he can get even Rs
8,000/month.
2. Abu Sufyan
Painter in Mumbai, Gujarat and Kerala. Now has started working here but is not able to make as much.
3. Muzaffar
His father drives a rickshaw in Delhi earning Rs 10,000 and would have chosen to stay back if could get even Rs
8,000.
4. Musharuddin
He does farming on a land he owns of 2.6 acres where he grows paddy, wheat and mustard. He is heavily
dependent on rain and generally buys water from neighbouring borewells for winter paddy paying nearly Rs
1500 for it for a 3-month period.
He cannot afford to hire labourers because of the high cost and hence works all by himself. Even then he is
hardly able to make it through taking care of his family and their basic necessities.
Insights: Mills can be started - paddy mills, coconut oil mills etc. Conventional crops are not working but having
green houses and with the use of new technology, it could get more profitable.
5. Alamgeer
11
Works as a labourer in and around his village only. He gets work for about 10 days in a month. He even tried
going outside but had to stop as it was taking a toll on his health and even got jaundice when he was in
Maharashtra. He earns about Rs 6000/ month which includes income from varied jobs like loading, cattle
tilling and work in farms.
6. Rizwan Khan
Quack doctor who has done his BA. Earns around Rs 7000/month.
7. Alauddin
Took a 0.5 acre land on lease for a one-time amount of Rs 68,000. He does farming himself on this field along
with his family. Collectively they earn Rs 8000 profit despite not having to pay for labour.
Insights: Initiatives should be such that their existing land is used rather than doing something completely
different. Also could do something based on dairy. Lots of people have experience in rearing cows. However, it
is not for selling milk. They buy a calf and sell the cow utilising the milk for house use only.
Abu Sufyan’s friend did a greenhouse project in a village nearby on 0.3 acre of land for which he spent Rs 2.75
lakh from which he profited Rs 4 lakh in 2 years. Abu Sufyan wanted to replicate this but did not do so yet due
to lack of funds and risk aversion.
Abu Sufiyan and his friend are trying to start a poultry farm. They have developed the structure but unable to
start due to lack of funds. They have applied for a bank for a loan about 2 weeks back and are waiting for
approval. Need Rs 1.4 lakh to start and hence have applied for the same through the loan. This Rs 1.4 lakh
would be utilised in making borewell, sumps, buy chicks and make a boundary for housing them and their
medicine.
Cost for 100 chicks would be Rs 40,000 - Sale for the same would be Rs 55,000
There is another arrangement where a company provides all the chicks and even provides a vet doctor for a
commission of Rs 10,000. But, however, doing it by oneself could give even Rs 30,000.
Currently he is thinking of doing this through the company due to lack of funds.
Abu Sufiyan had his own poultry business about 8 years back which he did for 3 years but later stopped as he
wanted to learn painting work.
Poultry Farm:
It takes 40 days for a chicken to become hen. Typically, each of these are small and can accommodate around
400 chicks in each one.
They buy the chicks when they are 1 day old. There is a company (Estone Co) from whom they purchase this 1-
12
day old chick, they take care of it and once they old enough they sell it for eating purposes.
It has been 8-9 months since this person started. Until now, he had a tie up with the company. Now he has
started doing it on his own. Land registered is owned by him which comes upto around 450 sqft.
Cost of constructing a shed is Rs 40,000
400 chicks bought for Rs 11,000
Feed Cost for 40 days is RS 55,000
10-12 chicks die each time
Need borewell, cannot use water from the pond
In general, profit is around Rs 8,000 – 10,000.
He has even had a loss of Rs 5000-6000 a few times.
Borewell (with hand pumps) will cost Rs 68,000. The depth of which is more than 130ft.
Only 2 poultry farms exist in this village, therefore making it a relatively new concept. However, the only
roadblock is the lack of funds in order to make the investment.
Green House:
There was a Government scheme where they paid Rs 3 lakh to a farmer as government subsidy for a
greenhouse project. The farmer got the money in his bank account. The person who got the tender from the
government for him spent less than a lakh to get the approval, took the entire Rs 3 lakh from the farmer and
left for good. The farmer got no benefit at all and was cheated in the process.
13
The politicians in the village have similarly benefited immensely from such schemes where they would take
nearly 75% of the money which would have been to the people.
Only 1 lady does beedi work out of 8 ladies, where she works 3 hours in a day earning about Rs 55/day from
this. She is willing to learn stitching.
I suggest Rehab starts a tailoring class, where preference should be given to ladies who are already working.
Especially the ones who are doing beedi work as these are the hardworking and dedicated one, which means
lower risk of investment.
A person who is driving rickshaws in Delhi says that if he can purchase a tuk–tuk here for Rs 1 lakh, he can
earn Rs 10,000 – 12,000/month profit. Rs 50,000 down payment and rest is paid by bank. Then EMI of Rs
3000/month. However, it is likely that as more people get these vehicles, the profitability will decline.
Tuk-tuk vehicles in Berhampore, Murshidabad
Insight: Whenever a new and profitable source of livelihood comes up, so many people adopt it due to the lack
of other options that the initial lucrativeness of this option is soon lost.
--------------------------------------------------------------------------------------------------------
Balagachi, Murshidabad
14
1) Gazlu Shaikh:
He is into farming and mainly cultivates vegetables and onions. He does not own a land and hence has
leased a land of 0.3 acres for Rs 30,000.
He even sources the water for his crops from neighbouring borewells for which he has to pay Rs 1200-
1500 per crop.
He works on the field for about 5-6 days a month and also takes helps from his 2 sons from time to
time. (2-3 days a month)
He also does other work like masonry etc and earns about Rs 8000/month.
His son also goes to Kolkata for about 10 days a month for additional work. He also does business of
selling steel utensils every day for which he even makes the purchases on the same day. Current
investment of Rs 15,000. Takes the utensils on cycle and sells from village to village. Current profit
from this business is Rs 6000.
20-22 days are spent on this.
It takes 3-4 hours to fetch the goods plus Rs 300 for transport charges every day. He is asking for Rs
30,000 for this one week’s inventory and can return Rs 3000/month. We will begin with Rs 15,000 for
him and then look at funding the remaining at a later stage. He will pay back Rs 1000/month.
2) Ummer Ali:
Does not own any land. Purchases garments and sells from village to village. He does this work for 25
days in a month. He does masonry work for the remainder. He does not have any investment in this
business and takes the garments on credit and pays Rs 4000-5000 to the vendor every day and gets
more garments from him. Monthly profit is around Rs 7000. The profit will increase significantly (Rs
2500/month) if he starts doing business on cash rather than credit. (Rs 10/cloth).
He is asking for an investment of Rs 30,000 so that he can start doing the entire business on cash. Part
cash- Part credit will not work as the shop owner will not agree as it is in his interest to keep all of this
on credit.
I have suggested a loan of Rs 15,000 whereby he will have to pay Rs 1000/month.
3) Azaad Hussain
Sells steel utensils from village to village. For 25 days a month. The profit comes to Rs 2000-3000/month
Also owns a 0.3-acre land where he cultivates onion and paddy.
Suggested a loan of Rs 15,000 whereby he will be able to return Rs1000/month.
4) Rafiq Saith
15
Owns 0.3 acres of land where he cultivates onion, paddy etc. Also does spice like turmeric, mirchi etc.
Does wholesale (to shops in villages) Works 15 days a month. Has receivables from the market of Rs
40,000.
He gets stock of RS 50,000 from the vendor of which Rs 40,000 is his investment. Total investment is RS
80,000. Monthly profit from this business is Rs 7000-8000
Suggest loan of Rs 15,000, where he will be able to return Rs 1000/month
5) Mufeezuddin
Does not have his own land. Does spice business. Does not have any investment from his side. Purchases
on credit and gives money back to the shop by end of day. Works 20-25 days a month. He has a credit limit
of about Rs 25,000. He gets a profit of Rs 6000/month. His profits can increase by Rs 5000- 6000 of he
does purchase in cash.
Suggest loan of Rs 15,000 loan, he will give Rs 1000/month.
6) Naushad Sheikh
Does not have own land. Garments business. Purchase garments from wholesale market in Kolkata and
sells elsewhere. His investment in the business is RS 20,000. Monthly profit of Rs 6000. The cycle is 1
weeks, he wants to increases it to be 2 weeks, which will decrease his travel costs and save time for
business.
Suggest loan of Rs 15,000 will return Rs 1000/month.
16
Meeting with beneficiaries in Balagachi
------------------------------------------------------------------------------------------------------------------------
Borjumlla, Murshidabad
Women:
1) Shamsurnahai Bibi:
Been doing Beedi work for the past 15 years. Works for about 6 hours a day and earns about Rs
100/day. She often complains of headache and problem in her lungs and is on periodic medication.
She has also bought sewing machine for Rs 8000 about 5 months back but hardly uses it much making
about Rs 200/month only. She has not been getting much work for sewing and is not very well trained
in sewing. She prefers doing something at home rather than going out.
2) Runa Bibi:
Been doing Beedi work for the past 16 years. Earns about Rs 100/day. She also seems to complain of a
head ache often. She does not know sewing and cannot leave home to learn this type of work.
3) Mustara Bibi:
She was also into making beedis for 6 years and due to severe pain in her eyes and body, left this job 6
17
month back. Feeling a lot better now but is not able make an earning. Sewing is also difficult due to
eye problems.
4) Komala Bibi:
Been doing Beedi work for the past 16 years. Works for about 7 hours a day and earns about Rs
100/day. She often complains of headache, body pain and problem in her eyes and is on periodic
medication.
Insight: A striking similarity between all these women doing Beedi work is that none of them want to
do this beedi work but due to the lack of alternate options and sources end up working anyway, even if
that means it’s a direct hit to their health condition.
5) Erana Bibi:
Been doing Beedi work for the past 30 years. Works for about 6-7 hours a day and earns about Rs
60/day. She often complains body pain due to which she is on periodic medication which comes at
cost of Rs 40/day.
6) Reshma Bibi:
Been doing Beedi work for the past 7 years now. Works for about 5 hours a day and earns Rs 60/day.
She is only 19 years of age and often body pain due to which she is on periodic medication which
comes at cost of Rs 1000/month. She finds it difficult to make time to learn sewing as she even has to
work at her in-law’s place.
7) Rubina Khatoon:
Been doing Beedi work for the past 7 years now. Works for about 5 hours a day and earns Rs 60/day.
Does not have any health problems so far and has been learning to sew from Rehab centre from the
past 11 months. She has been wanting to purchase a sewing machine but is short of funds. Also wants
to start learning to cut in another 3-4 months. She plans to stop doing this beedi work and make a
permanent shift as she is scared of contracting any kind of ailments through the current job.
8) Mili Bibi:
Been doing Beedi work for the past 7 years now. Works for about 5 hours a day and earns Rs 60/day.
Does not have any health problems so far and is ready to start taking training for sewing from the very
next batch.
18
MEN:
1) Shafikil Islam:
Has a tailoring shop which he has been running for over 12 years drawing an income of Rs 8-9k/
month. Also teaches sewing at Rehab for Rs 2000/month. He wants to start goat farming, but does
not find the time. However, knows the right person for the job. This way he wishes to keep atleast
30-35 goats with an investment of Rs 1 lakh. He says he can contribute upto Rs 30,000 for this. But
after having analysed his situation, I have advised to him start this all by himself putting his own
money. In case, this does well, Rehab could then help (loan) him expand.
2) Shaki-ul-shaikh:
Completed 1st year of graduation but then discontinued. Is currently doing a vocational course in
pathology and wants to start a lab once he completes this course after 6-7 months.
3) Esraful Haq:
He is doing his 3rd year BA. Have advised to start planning career right away.
4) Moidul Shaikh:
He along with a team of 3 others had taken a loan of Rs 40,000 from Rehab in Feb-15 for a period
of 1 year. This was to pay Rs 22,000 towards the lease of a mango garden of 1 acre for the season
in the same village. 3 out of these 4 men have had experience in this field in the past. Due to
heavy winds and rainfall, they incurred a huge loss where they were able to recover only Rs 7000.
The rest of the amount from the loan taken (i.e. Rs 18,000) was given to another person who
made a very good profit and even returned the entire capital amount.
As for their capital amount, (i.e. Rs 22,000) they have returned Rs 14,000 so far and will be
returning the balance amount before the end of the loan period.
5) Barikul Saith:
He goes to another district for mason work earning Rs 15,000/month.
He did his graduation (BA) and started working for these Sharadha type chit funds where he
channelled Rs 3 lakh from people who lost all their money.
He is single for now and is the only son. He has his father with him and hence does not want go
out for work.
He has invested Rs 1.2 lakh in the rice business.
Inventory: Rs 16-17k as of now; Cash: Rs 30k; Payables: Rs 30k; Receivables: Rs 90k
19
Apparently, the business has low profitability. He purchases about Rs 20,000 worth of stock each
time. He will be able to purchase at a much better discount and pass on the profit to end clients.
Thus increasing the sale if he directly purchases from the rice mills. But, the investment required
will be much higher, whereby he will need to purchase a minimum stock worth of Rs 1 lakh.
The minimum value of rice which should be bought from these mills to make this a viable business
is of Rs 60,000
He is wanting a loan from Rehab of Rs 25,000 and will be willing to put the balance amount of Rs
35,000 making it Rs 60,000. He is ready to pay Rs 2,500 per month towards the loan from Rehab.
Therefore, I suggest loan of Rs 25,000 where he will return Rs 2500/month.
---------------------------------------------------------------------------------------
Kabilpur 2nd Round - Sericulture
According to experts in KVK (Krishi Vidhan Kendran) whom we met, there are only losses in growing
conventional crops such as wheat, paddy and mustard.
They suggest other options like:
- Sericulture (Silkworm farming)
- Floriculture (flowers)
13 people attended the meeting, out of which 6 were farmers. Out of them, 5 were there with us earlier. 5 are
teachers of which 3 have land.
Insight: Every year after the harvest, they make a resolution that they will do something different from the next
season onwards, but on the onset of the next season, end up doing the same thing with the same exact
results/outcome. This vicious cycle needs to be broken one for all.
20
Meeting with Kabilpur farmers
Criteria:
1. They should have their own lands
2. They or their family members should do most of the work in the field.
3 farmers agreed to take up sericulture.
Farmers who will take up Sericulture:
1) Md Ishraf:
Land: 2.3 acres of which he will use 0.3 acres for sericulture.
Water: Own borewell with submersible pumps.
Labour: Will work all by himself, however in case its required, will take help from labourers.
2) Naimuddin:
Land: 5 acres of which 1 acre is suitable for agriculture. Out of this 1 acre, he will use 0.3 acres for sericulture.
Water: Own borewell
Labour: Will work all by himself, however in case its required, will take help from labourers
21
3) Mujeebur Rehman:
Land: 0.6 acres of which 0.3 acres will be used for silk.
Water: Own borewell
Labour: Will work on it all by himself
----------------------
Village Committee:
1) Mohammed Abdul Hamid: (Training in-charge)
Will co-ordinate with the KVK instructor and farmers to ensure that the training is done properly. Only after he
gives a verbal certificate that they are fully trained will we proceed further. If the farmers face any problems
going forward, he will be co-ordinate and fix meetings with KVK instructors.
2) Md Raisuddin: (Funds disbursement in-charge)
He will decide how much funds are required at any point in time and give approvals for disbursement of funds
accordingly. He needs to go KVK and understand the expenses expected and investment required. In the first 6
months of investment, he needs to monitor progress, and the funds disbursement for the 5th and 6th month
should only be made after seeing the progress in the Mulberry plantation and whether things are on track. He
might need guidance from KVK on this.
3) Shahidul Islam: (Monitoring accounting in-charge)
He will note all the expenses incurred every time, keep receipts wherever applicable, note the quantity and
price at which the product was sold etc. and will finally determine the net profit of the venture and share of
each party involved accordingly.
22
From Right to Left: 3 Farmers, Village Committee, Rehab representative and Rehbar Representative
Meeting of the 3 farmers with sericulture expert at KVK
23
Financials of Sericulture investment
Entire investment of working capital including payment to the farmers for their work will be done by Rehab. If
any loss, it will be entirely borne by Rehab. And in case of profits, 50% should be shared with Rehab.
Cost to build room and other infrastructure required: Rs. 76,000
Monthly allowance for farmers: Rs. 3,500
Expected monthly cost for fertilizer and power: Rs. 500
Expected monthly cost for silkworm eggs, transport costs etc: Rs. 1,000
(First 6 months involves planting and growing the mulberry plants, while harvest starts from month 7, by
which time the room should be ready)
Initial investment (Rs. 1 Lakh):
Month 1: Rs. 4,000 (allowance, fertilizer and power)
Month 2: Rs. 4,000 (allowance, fertilizer and power)
Month 3: Rs. 4,000 (allowance, fertilizer and power)
Month 4: Rs. 4,000 (allowance, fertilizer and power) – conduct inspection of mulberry plantation on 0.3 Acres
Month 5: Rs. 4,000 + 38,000 (allowance, fertilizer and power plus room building)
Month 6: Rs. 4,000 + 38,000 (allowance, fertilizer and power plus room building)
Returns (in the year starting from month 7, and in subsequent years):
Minimum 5 cycles of breeding/annum, each yielding average of 18,000 at sale;
Total revenue 90,000; Expected Cost (5,000*12) - Rs. 60,000; Expected Profit – Rs. 30,000
Investor’s share – Rs. 15,000 (ROI of 15%)
Investment Tenure – Minimum 3 years (15-18 cycles)
Farmers can reduce the investment by repaying capital apart from the profits, if they are able to, in certain
seasons. The profit share of the investors would vary correspondingly.
Initial investment 100000
Annual Revenue 90000
Monthly Operating Cost 5000
Annual Operating Expense 60000
Profit 30000
Investor's share 15000
ROI 15%
