The concept, now a Harvard Business School case study, is simple. A fully-owned
subsidiary of Fabindia, Artisans Micro Finance, a venture fund, facilitates the
setting up of these companies, which are owned 49 per cent by the fund, 26 per cent
by the artisans, 15 per cent by private investors and 10 per cent by the employees
of the community-owned company.
The investment by these four categories of investors provides the paid-up capital.
The company promotes the sales of its artisan community to Fabindia, which is the
principal buyer. Eventually the companies will sell to other buyers, too. Haryana
and Faridabad have already started independent sales.
After expenditure and tax are deducted from the principal sale value for the year,
the year's profits before and after tax are worked out. Based on this, the valuation
of the company and its enhanced share value can be calculated.
The artisans gain in many ways. The value of their shares goes up. They earn
dividends when the company is in a position to declare them. Eventually the company
will try and offer loans to the artisans, arranged through banks.
Image: Artisans work on a hand embroided silk saree. | Photograph: Noah Seelam/AFP/Getty Images
Also read:
Success story of a small Indian village
Advertisement
