Taking SHGs to markets

By any reckoning, Pragati Mahila Udyog Sahkar Sansthan is not a commercial entity.

Founded in 1993 by the Pune Municipal Corporation (PMC), the 40-odd lower middle class women who belong to this self-help group make a variety of products stitched from cloth, such as files, folders, bags, and shirts. After a modest annual output for over a decade, the group got a break in 2004, when the PMC gave it a large order for school uniforms. That's when Pragati's annual turnover touched Rs 30 lakh.

Still, the group functions on a non-commercial basis. Its manufacturing centre is a large hall adjacent to a PMC-run school where around 20 sewing machines have been installed. Pragati does not pay rent for the premises. It got the machines free from the PMC and does not have to pay for electricity. Additionally, some women members who work from home have been given free sewing machines.

Pragati did not have to worry about the marketing aspect. While a bulk of its production - uniforms - was supplied to the PMC, other products were sold through outlets set up by the municipal corporation or bought by non-government and charitable organisations.

As a business model, however, Pragati was not sustainable; it depended entirely on the social welfare approach of the PMC.

This is set to change in the coming years. Sandhi, a venture in which IFMR Trust has invested, is helping Pragati graduate to a market-based model.

Inside Pragati's production centre at Pune

Sandhi is a social enterprise that develops sustainable livelihood opportunities for unorganised producers of hand-crafted products, by providing the missing pieces that help them connect to markets.

With some hand-holding by Sandhi, Pragati has procured and fulfilled test orders for shirts from large retail chains like Pantaloons and Big Bazaar. The group is currently working on a large order from the former.

Apart from serving as a bridge (sandhi means bridge in Sanskrit) to large retail chains, Sandhi also works with the women of Pragati to enhance their capabilities, help them take on large orders and meet quality requirements.

This will directly impact members' earnings. While they get between Rs 13 and Rs 15 for each shirt produced and supplied to the PMC, they earn Rs 18 per shirt through retail chain orders. In a day, each woman makes six to 10 shirts, depending on her experience and responsibilities at home. In a factory setup, women make around 15 shirts a day.

Vaishali Dhamnaskar, the PMC-appointed coordinator at Pragati's manufacturing centre, says: "The average income of our members is around Rs 2,500 per month. With commercial orders, incomes increase by 25%. As we gain confidence and produce more, members are able to earn up to Rs 5,000 per month."

The income is to be viewed against the traditional option. Many of Pragati's members come from families where women make a living by rolling beedis. They earn an average of Rs 40 for a day's work.

Increased income is good for Sandhi too, which charges a facilitation fee on every order successfully completed, on the gross receipt.

Sandhi has two wings. While Sandhi Craft Foundation is a not-for-profit Section 25 company that works with producer groups to set up long-term capacities, Sandhi Hand Craft Pvt Ltd builds appropriate business models and merchandising solutions to connect producers to markets.

The process is easier said than done, however. Prachi Nautiyal, who is in charge of capacity-building at Sandhi, identifies the disadvantages people like the women members of Pragati face: "The women are illiterate or semi-literate. They have little knowledge of manpower-planning, accounts and management. They do not have firsthand knowledge of market requirements. Due to all these reasons, they cannot produce to their capacity and their products suffer a lot of quality rejections. As the women are not geared towards working as a commercial entity, there is a lot of absenteeism."

Sandhi is working on all these areas, providing guidance to Pragati members as they strive to meet orders.

Members of Pragati were given the opportunity to learn from Dhirendra, a textile designer trained at the National Institute of Fashion Technology (NIFT). Working with the women for a week, in May 2008, Dhirendra helped identify and iron out a number of basic flaws in the production process.

He explains: "The women had received training in tailoring from the PMC, but they did not know how to correctly handle their machines. They did not know about proper finishing - they were used to making unfinished products for local markets. They also did not know the various stitching techniques, and ways of handling different kinds of fabrics."

Pratibha Saili, one of the earliest members of Pragati, elaborates on the training programme: "I have worked on the machine for 14 years but have never learnt as much as I learnt this one week."

While the skills of people like Pratibha are being built up, some members do not attain the requisite competency. In a factory setup they would probably have been asked to leave. But not at Pragati.

Dhirendra says: "People can be used for different skills. For example, some women can be engaged only for making button holes. Others can be used in ancillary operations like stocktaking and packing."

It helps that some retail chains like Pantaloons have an enabling attitude to Sandhi's initiative and empathise with production groups like Pragati.

A spokesperson at Pantaloons explains: "We believe in sustainable rural development which goes beyond corporate social responsibility, as we have woven it into our business processes by sourcing fabrics and products made by the cottage industry in rural India... We recognise the inherent variability on the supply side due to the nature of the manufacturers - a large number of rural women - and hence, though we do not get consistency in delivery schedules that the larger mill-woven suppliers might provide, we continue to work with Sandhi to support the cause of rural development."

"At the same time," the spokesperson adds, "we are working with Sandhi to try and improve the processes at the back-end to make the product supply more consistent."

Sandhi works with groups in other parts of the country too. Its business plan is to build cross-product regional hubs, each with its own teams for design, accounts, merchandising, and marketing. This way there will be an aggregation of back-end and marketing for a variety of products made by producer groups scattered across various locations.

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