Arranging capital for business

I wind my way deep into the streets — into lanes and by-lanes and find myself at the house of Bhargavi. The house is really two rooms, one of which is the kitchen. Bhargavi later tells me it has been partitioned off from the ancestral property of her husband’s family. I guess these rooms are his inheritance. Bhargavi lives here with her husband aged 40 and two sons aged 17 and 15. The already small house is stacked with bundles of sarees — some wrapped in cellophane, some not. Bhargavi is seated on the floor with a customer, the stream of endless, colourful fabric covering both their laps. Bhargavi’s customer — a woman about the same age as her is looking for something specific. Bhargavi pushes another saree towards her as it is evident her customer can’t make up her mind. Finally, the woman pays Bhargavi, picks up two sarees and leaves with a satisfied smile. Bhargavi rolls up the cash and stuffs it in her purse, her glass bangles jingling with her quick movements and turns to talk to me.

Bhargavi is about 36 years old. She is lean, smooth-skinned and has rounded shoulders. Her hair, long and wavy is tied into a tight braid. A bindi dots her forehead and she speaks quickly in Telugu interspersed with a few words in English. Born and brought up in Bengaluru, she is no stranger to hardships. ‘My parents were government employees, and our financial condition was average’ she recollects. Bhargavi completed her higher secondary schooling and joined a computer course in MS Office. Soon after, she took up a job as a computer teacher at a private institute and worked for some years after she got married. ‘I left my home and came to this Dodda Banaswadi. This was too far from here, and I started getting a backache’ she says which forced her to quit. Bhargavi’s husband is a carpenter and finds work in people houses through a contractor. While he is gainfully employed, his income comes in bursts and far between months. As their children grew older, Bhargavi felt the need to earn an income and began to pine for some work. At the time, her mother had retired and was running a saree business from home. She advised Bhargavi to do the same, lent her some capital and taught her the ropes. It has been six years since Bhargavi has been supplementing the family’s income with her business.

Bhargavi’s initial customers were her friends and family. As the word spread, more customers started coming to her. She buys the sarees in bulk from a local wholesaler at Bengaluru’s saree market. She does not share with me her cost but discloses that for every 5000 rupees she spends, she makes a profit of 2000 rupees after sale. Bhargavi buys the sarees once in every five to six months. Since the lockdown in Bengaluru, the household income has been almost nil. ‘Naa husband ku pani dorakaledhu mariyu naa customers kuda antaga raledhu. Naa arthika paristidhi antaga bagoledhu’ (My husband cannot find work and my customers too have dwindled. We are in a bad financial condition) she says worried. The household had to dip into their savings to keep surviving and as a result have depleted all of it.

Bhargavi’s monthly earnings before the lockdown averaged to about 10–12,000 rupees per month. While her income has been halved, the cost of running the household has stayed the same. With no savings to see them through, they have been forced to borrow, plunging them further into poverty. Her household spends a total of Rs. 12,000 on groceries and utilities and another Rs. 8000 on school and tuition fees. Bhargavi had taken a loan of Rs. 40,000 from a microfinance institution few months ago and is paying Rs. 2,940 towards instalments. The household borrows regularly from the institution to cover expenses or as capital to invest in her business. In addition Bhargavi also borrows from family or friends for emergencies. For instance, last year, Bhargavi borrowed Rs.70,000 for hospitalization in her family from a friend.

Bhargavi’s husband owns a smartphone but they do not use it for financial transactions. She aspires to educate her sons and move house to a better location. ‘That will depend on my sons’ choices as well. Once they grow up, I will have to go along with what they want’ she emphasises. She wants to expand her business to sell dress-material in addition to sarees. She lets me in on a secret desire as well. ‘Bhavisyattu lo naa pillalu kosam kothaga oka computer browsing center pramabinchalini nirmanamu chestunnanu. Dhaani kosam kuda nenu dabbulu save chesukovali’. (I would like to start a business that is useful for my children in the future like a computer browsing centre. I will have to save money for starting this business) she adds. I am impressed with her vision and her courage in looking to build something of value that she can pass on to her children.

Bhargavi is confident that business will soon pick up and she will be able to see her dreams coming true. I see in her the markings of a resourceful and animated entrepreneur. Like the gold that borders most of her sarees, she is certainly looking at the silver lining in the doubtful clouds of these times.

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This story has been developed in partnership with Kaleidofin. A portfolio startup of CIIE.CO. Kaleidofin is a FinTech platform that propels under-banked customers towards meeting their real life goals by providing intuitive & tailored financial solutions.

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About the Authors:

Akhil.G as one of the young and bright account managers at Kaleidofin. He manages business operations across southern India and is passionate about working with leading institutional networks to enable goal-based financial solutions/digital payments for over 2 million low-income women entrepreneur-borrowers. He is a classic engineering plus management graduate with a great sense of social responsibility. As an “aspirational district fellow” he has worked on many interesting projects partnering with the Ministry of Home Affairs, Govt. of India. He tweets @akhtlk

Valerie Mendonca is a Senior Research Associate at CIIE.CO, India’s foremost entrepreneurship centre housed at IIM Ahmedabad. Her research interests are women, entrepreneurs, society and storytelling. She tweets @ValerieHood17.

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About Bharat Inclusion Initiative (BII):

Bharat Inclusion Initiative (BII) is an incubator platform at CIIE.CO that provides entrepreneurs with the domain knowledge, training, financial support, mentorship, and market access they need to bring inclusive, for profit-business to life. BII’s core design is to promote technology-driven entrepreneurship towards the delivery of affordable services to the “Bharat Segment- the poorest 200 million households in India who survive on less than $5 per person a day” through programs, fellowships, and funding where possible.

The program focuses on solutions leveraging technology, especially the India Stack. It integrates financial inclusion research with entrepreneurship and training to transform these solutions into scalable, viable and high impact businesses. We are keen on partnering with entrepreneurs who are driven by building next-generation digital services for India. Reach out to us at bharatinclusion@ciieindia.org or ask your questions in the comments section below.