Milaap’s Educational Lending: Training for Self-Employed | Milaap

Milaap’s Educational Lending: Training for Self-Employed Artisans

One area where Milaap has found supplementary education to be effective in creating employment is in the crafting industry.

We started lending to women and men who wanted to become self-employed artisans in March 2012 in association with Industree Crafts Foundation (ICF). ICF places individuals interested in craft training programs into Self Help Groups (SHG).  Then ICF trains the SHGs on how to design and coil natural eco-friendly materials into home décor products.  After the 50-day training program is complete, the SHG becomes a production unit for ICF.  As a production unit, the newly trained artisans can sell their products to ICF to be sold in urban markets and receive 58% of the revenue share- the highest in this industry.  ICF partners with urban retailers, like Mother Earth, to sell these artisan goods.

ICF’s training courses is a government-developed program that is supported by the Union Ministry of Textiles called Ambedkar Hastashipla Vikas Yojna. Based on a Sanction Order issued in the beginning of the program, all the training costs will be reimbursed by the Union Government on successful completion of the training. However, many of the trainees do not have the funds to front their tuition.  Funds, provided by a Milaap loan, bridge this gap in financing so individuals of low-income can enroll in this government program. After the courses are completed, the entrepreneur can pay back their Milaap loan with the funds from this government program or from their increased income.

We have chosen Orissa, Bihar, and Rajasthan for starting the program. These districts were chosen based on the baseline surveys. Our ICF borrowers live on INR 35 per family member per day.  Initially, a group of 20 trainee artisans was provided a loan of INR 150,000 at 15% for 12 months. ICF is guaranteed this loan with the Sanction Order issued by the Governemnt of India; we have appended a copy of the Sanction Oder in Annexure. The retail arm of Industree, Industree Crafts Pvt. Ltd., provides a purchase order for the trainees at the beginning of the training; with this we ensure that the artisans have assured demand for their goods on completion of training.  Impact of the program:

  • Program commenced with 40 trainees in March 2012, and as of August 2012, we have 180 training loans
  • Currently operating in three remote locations in Orissa, Bihar, and Rajasthan
  • This program will benefit 2000 people over 2 years in remote locations
  • Estimated employment value – INR 5000 per month for an artisan
  • Assured demand for goods produced after completion of training – the craftsmen will become vendors for Industree Crafts Foundation after they complete training courses
  • Impact on livelihoods of people based in remote areas of Bihar, Rajasthan, Orissa etc.

Through Milaap’s partnership with ICF, unemployed individuals from remote areas are gaining skills and finding work.  The loans are very secure because employment for the artisans is guaranteed by ICF upon completion of the training.  This program is helping hundreds to enter a program they otherwise would not be able to afford and creating jobs for a marginalized population. This partnership is beneficial to Milaap not only because of the initial education loan but also because it insures future loans.  Once the SHG becomes a production unit, they turn to Milaap for capital to buy equipment and materials to produce their crafts.