DARE - Because Entrepreneurs Do

We organized most of the 400,000 women households, who were manufacturing bidis into Self Help Groups (SHG). Our aim was to give the SHGs alternative work and ensure that the products manufactured by them are marketed

The first challenge we faced was in 2002 when SIRI Gramodyoga Samsthe was started. We wanted to actually provide additional employment to rural folks who wanted to migrate to Andhra Pradesh and Madhya Pradesh in search of livelihood. There were 400,000 women households, engaged in bidi manufacturing. We organized most of them into Self Help Groups (SHG).

L H Manjunath

Our aim was to give the SHGs alternative work and ensure that the products manufactured by them are marketed. The first biggest challenge that we faced was the technology know-how. We had identified a variety of product line that can be manufactured by these SHGs. These include readymade garments, sweets, confectionery and personal care products such as toilet soap.

In the beginning, we did not have the right kind of know-how and technology to produce any of these. For instance, we did not know the standard formula to make soap or to get the standard odor. Such things were a major challenge for us. Knowledge was not readily available.

We started hiring technically qualified people from the chemical business and the soap industry. It was difficult even for the experts to come up with specific formulae because all the formulae they were exposed to belonged to different companies with proprietary rights. That turned into a bigger challenge. However, over a period of time these people learned what kind of formulae they could apply.

With their own formulae, each group started launching the products. That’s when we hit our next challenge. The SHGs were not ready to accept this as an enterprise. They were only doing labor arbitrage where they were basically comfortable doing labor for a specified cost. So we had to think hard on how to convert these SHGs into the entrepreneurships where they could start producing their products and sell it in the market.

We had to introduce to the SHGs the entrepreneurship model of producing and the concept of micro-credit. SIRI started extending micro finances to the SHGs. Eventually, with the help of micro finance they were able to commence production in their chosen domain.

Then the SHGs hit the next natural challenge—quality. The quality of the product from the various SHGs became an issue because they were not able to maintain the same quality. There was no uniformity in the quality across locations and groups.

We got professional trainers to train SHGs in quality processes and appointed quality personnel to check the quality of product before they were released into the marketplace.

The real test was in the market. Both the distributors and the retailers were demanding extended credit periods. We did not have people who understood the
market and the product well.

When we wanted to hire good marketing professional we hit the high salary barrier.

As a result we tried out different marketing teams and different kinds of marketing channels. We dabbled in direct sales through our own outlets called the SIRI Outlets. We also started selling through line-sales where our people would go in a van and start distributing the product.

Today SIRI is a successful experiment with a turnover of `15 crore and we are making a profit of around `1 crore.

One of our most successful products is agarbatti (Incense sticks). Today, we export agarbattis to the tune of `34 lakh per month. However, our last challenge remains unsolved. Finding good people who can go to the clusters, work at the grassroots level and take the organisation to the next level is still the biggest challenge that we face at SIRI.