This is a commercial model, without subsidy. Access to Funding: Fabindia's subsidiary company - Artisans Micro Finance Private Limited (AMFPL) has negotiated loans from a leading bank. Agreements are in place to finance community owned company expansion and working capital.
Training Programs: Initial managerial training is being provided in association with an apex industry body and a leading management institute. Pool of Product Designers and Domain Specialists: Fabindia is making available specialized inputs to enhance and strengthen the product offering by providing design inputs. Technology Support: Implementation of technology platforms across all community owned companies.
Measures of Success:
- Number of lives affected: 500,000
- Number of microfinance institutions supported: 100
- Number of microfinance borrowers supported: 100,000
- Number of small and medium enterprises supported with capital, technical assistance, technology, markets, etc: 100
- Amount of new capital invested in or loaned to small and medium enterprises: $25 million
The focus of this commitment is to bring rural artisans the required support infrastructure and best practices, including affordable working capital, access to new technology, design inputs, warehousing and storage facilities, quality guidelines and continuous training. Rural craftpersons today lack the incentive to continue their craft as a profitable business - the company's vision is to reverse this trend and make them the direct beneficiaries of the growth and wealth creation through its community owned companies.
Fabindia intends to create 100,000 artisan shareholders while setting up community owned companies across the country, which will be the supply base of the company. Fabindia is now in the process of aggregating clusters of rural/urban artisans and marginal crafts workers into shareholders of decentralized local community owned companies that will effectively become the supply base of Fabindia. This will bring to the artisans and craft-workers not only to participation in the retail opportunity through the supply process, but also by making them share-owners in the community owned companies, and direct beneficiaries of the wealth creation process.
The principles will include keeping the entry barriers to new shareholders low so that the poorest artisans can be made partners in the process, while educating artisan shareholders about the benefits of owning equity in a for-profit corporation. It also includes providing a fair valuation methodology so that artisan shareholders realize their 'net worth'. This focuses on creating asset based wealth, and giving each shareholder access to liquidity by providing for a simple way for them to sell their shares and run each company in accordance with the law, in a transparent manner and within the norms of corporate governance.
The community owned company will be a conduit to provide artisans with not only sustained demand assurance given Fabindia's sophisticated front end presence, but will also ensure access to loans, design inputs, training and technology to strengthen the product offering, while effectively accelerating demand.
Craft is the second largest employer after agriculture in India - it is also plagued by issues that surround some of the lowest incomes, and suffers from lack of sustained inputs and assurance of market linkages. Through the community owned companies and facilitated / supported by the Joint Investment Fund set up by Fabindia, the company hopes to take the capitalism model to its logical conclusion in a sector that sorely needs sustained inputs in terms of funds and product/process strengthening while impacting at least 500,000 lives over the next 3-5 years.
SEEKING: financial resources, implementing partners, best practices information. The final objective is to make the concept self-sustaining; at present, however, the commitment maker is looking at funding for working capital, training programs, provisio