Crafting ‘Access’ the CAFNE way
From time immemorial artistry and craftsmanship have been an inherent part of the Indian societal fabric that has portrayed our culture and the uniqueness that it embodies in different shades and hues. Practiced for generations, craft, apparel and furnishings sector is one of the largest decentralized and unorganized sector of the Indian economy, accounting for second largest employment after agriculture. True to its vastness, the sector has a long and probably one of the most complex supply-chains imbibed in it.
Due to its unorganized and decentralized nature, the sector faces issues in relation to striking market linkages to match supply-demand gap, availability of timely information on market and on raw materials, proper training and skill updation, and also in availability of capital requirements.
To identify and address such supply chain issues in the sector, the Crafts, Apparel and Furnishings Network Enterprise (CAFNE) team, IFMR Ventures, has dedicated itself to this cause.
At a fundamental level the CAFNE team addresses ‘access’ issues with one of its core objectives being to provide access to finance by enabling entities to meet their financial requirements. It has already dealt with two such organizations in this regard – Sandhi and Masuta.
Sandhi Hand Craft Pvt. Ltd. works as an interface between the market and artisans to develop sustainable livelihood opportunities for unorganized producers of hand-crafted products. It works towards improving product design & sampling, raw material sourcing, order management, quality control and training.
Masuta, involving a combined effort of IFMR Capital and CAFNE on the other hand, is involved with yarn processing. Dealing with women producers who do reeling / spinning activity to produce tasar yarn from cocoon, Masuta arranges working capital, buys raw material & provides market linkage to these women producers by purchasing yarn from them and selling it in the market. For better value realization, it also makes fabric and final products and sells it in the market.
Also, within this sector, it is noticed that SMEs do face liquidity crunch in the form of working capital requirement which hinders their growth to a great extent. To address such gap, the CAFNE team is in the process of rolling out a “Receivable Financing” product. It is a combined effort of IFMR Capital and CAFNE team once again. The product enables the producer to receive financing against their receivables and improve their cash flow. Its USP being that is it collateral free and can be scaled up quickly, thus empowering the producer with liquidity to meet further orders and offer competitive terms to the buyer without being tied-down – creating a win-win solution for both buyer and supplier.
Another of its core objective is in addressing issues with respect to market access by opening up newer avenues and enabling market linkages to producer organizations.
Madhukar Choudhary and Kaushiki Rao are part of the CAFNE team and can be reached for more information about CAFNE and its work.
At Craft, Apparel and Furnishings NE (CAFNE), we are pursuing an operating model that has the following characteristics:
