What we do is pioneering. Our products have multiplier effect in micro enterprise promotion. Technology plays a very limited role while domain intelligence plays the dominant role. It has taken over five years of action research in field to develop the products. And we have just started. We have got miles to go.
Local Market Intelligence
We start out with capturing all kinds of businesses and markets in a region. The data collected from primary census, focused group discussions and stratified surveys, is then fed into our proprietary technology platform, which has been built using intelligence from 100,000 data points from twelve states across India. The intelligence is then presented in an interactive and user-friendly software interface to potential entrepreneur for decision making. The tool discourages herd behavior in first generation entrepreneurs. The intelligence also helps Micro Venture Consultant in phasing out locations for micro enterprise promotion. It is determined, based on local context, whether resources should be deployed in strengthening existing enterprises or in promoting new enterprises. Wherever existing base is strong, focus is on strengthening it rather than promoting a new base to compete with.
Screening of applicants
Based on entrepreneurship psychometric tool, applicants are segregated into opportunity entrepreneurs and necessity entrepreneurs. Opportunity entrepreneurs are encouraged to startup large growth businesses while necessity entrepreneurs are encouraged to startup (community level) limited growth businesses. Applicants then undergo credit risk appraisal. Owing to multiplicity of livelihoods, intermingled cash movements and complex economics of poor families in unorganized sector, meticulous appraisal of repayment capacity and credit worthiness becomes a daunting task (thereby, forcing bankers to resort to collateral). We have created, over a period of time with numerous trials in different states, a credit risk appraisal tool that can quantify credit risk in an individual applicant.
Individualised Business Plans
Due to cognitive biases like over-confidence and putting horse-before-the-cart, the first generation entrepreneurs end up over-spending while starting up. Ideology of lean startup is seldom followed. Our proprietary technology platform, based on advanced financial modelling with regional data as input, projects the capital required for starting up or growing a business at particular location. The financial product is tailor-made for individual applicant based on cashflow seasonality and risk appetite. The platform also generates individual business plans that serve as ready reckoner to our customers, entrepreneurs and Micro Venture Consultants.
The bookkeeping module has been developed with an objective of helping an entrepreneur – in cashflow projections and in becoming bankable. Through this mobile application, key financial data is collated on regular basis to process financial statements like profit-loss statement, balance sheet and cash flow statement. The mobile-based interface feeds sales and expense figures – on daily basis & weekly basis.
At any point of time, entrepreneur or Micro Venture Consultant can generate simplified profitability, balance sheet and cashflow statements. The same report is also available on the tablet/ printable format. The diagnosis is used by Micro Venture Consultant to provide advisory to the village entrepreneur.
The business data is then compared with local peers to see how an individual entrepreneur is performing. An alert is triggered if performance deviates significantly from local peers.