Prayas- Business Plan

8/4/2019 Prayas- Business Plan

http://slidepdf.com/reader/full/prayas-business-plan 1/22

Business Plan Template

Pryas

Contents

1. Confidentiality Agreement

2. Executive Summary

3. Business Focus

3.1 - Mission Statement

3.2 - Business Details

3.3 - Professional Support

3.4 - Personal Profiles

3.5 - Operations3.6 - Operation Cycle

3.7 - Payment

3.8 - Aims & Objectives

4. Market Research

4.1 - Marketing Environment

4.2 - Competitor Profiling

4.3 - SWOT Analysis

5. Marketing Plan

6. Financial Plan

6.1 - Start Up Costs

6.2 - Sales Forecasts

6.3 - Cash-flow Forecasts

6.4 - Other Financials

7. Appendix

1. Confidentiality Agreement

It’s a good idea here to put some kind of confidentiality agreement between you and anyone that mightread the plan. You don’t want to leave yourself open to people divulging your great business idea to anyold Tom, Dick or Harry.



There’s a good example of an agreement on this A List Apart Article

Executive Summary

http://www.google.com/url?q=http%3A%2F%2Fwww.alistapart.com%2Farticles%2Fbusiness1%2F&sa=D&sntz=1&usg=AFQjCNEl9cJFvR25yZB1DlcJzi1hYoVyFQ





2. Executive Summary

Prayas is an online micro-credit organization through which lenders can lend to small and marginalentrepreneurs in the rural and semi-urban areas of the so-called “Bimaru” states of central and northernIndia. It has a for-profit business model and offers competitive rates of returns to all its lenders. Itattempts to occupy a niche in the Indian micro-finance sector through its web-based model. The main

objectives of Prayas are:1. To provide easy credit access to financially excluded small and marginal entrepreneurs in rural andsemi-urban areas and thereby empower them and improve their standard of living

2. To act as a bridge between economically secure and insecure sections of society through appropriateuse of technology and create a climate where entrepreneurship can flourish in every nook and corner of the country.

3. Provide lenders as well as borrowers with competitive rates of return/interest.

4. To create awareness among aspiring small entrepreneurs in rural/semi-urban areas about successfultrade practices and guide them towards success in their respective ventures.

5. To encourage people in rural/semi-urban areas to come out of the vicious circle of poverty by

participating in entrepreneurship ventures.

6. To be an effective and responsible partner to all its field co-partners.



Business Focus



3. Business Focus

The business focus section details any aspect of how the business will be run, who will help set it up and

any aims & objectives you have.

3.1 - Mission Statement

Mission

The mission of ‘Prayas’ is to enable the small and marginal entrepreneurs in India to achievesuccess in their businesses by providing them with funding opportunities from lenders acrossIndia.

3.2 - Business Details

Need and the concept

Prayas is an internet portal through which lenders would be able to fund small ventures in the socalled ‘Bimaru’ states of central and northern India. The details of the micro-entrepreneurs inneed of money would be posted on the portal by our ‘Field Partners’. The field partners are localintermediary NGOs who would be doing a pre-screening of the entrepreneur’s business. Theywould be doing a viability check, would provide us a credit assessment report, provide socialreputation index of the entrepreneur as well. The money would be disbursed to the micro-



entrepreneur through the field partners. The field partner would get a share on the interest earnedon the credit in lieu of their services.

Our Role

Prayas is an intermediary between the lender and the receiver. We bridge the physical gap between the two parties and enable a win-win situation for all involved parties. The micro-entrepreneur gets the money that the enterprise needs, the lender would get a steady interest rateon the loaned amount, the field partners would get their due and to make this all happen Prayaswould get a small share in the profit.

3.4 - Personal Profiles

Leadership Team

Prayas has an excellent mix of leadership that has diverse experiences in Consulting, IT, Sales,Marketing and Finance.

Angshuman Das – Co-Founder and Head of Finance, PGDM, IIM Indore

Anil Kumar – Co-Founder and Head of Strategy and IT, PGDM, IIM Indore

Amal Anand – Co-Founder and Head of Marketing, PGDM, IIM Indore

Amit Ranjan – Co-Founder and Head of Operations, PGDM, IIM Indore

Alok Diwedi – Co-Founder and Head of Business Development, PGDM IIM Indore



Operations



3.5 - Operations

Key people:

Field partners: Individuals having knowledge of local area. They are proficient in English, Hindi and thelocal language. They are the face of ‘Prayas’ in the field and they will help us in identifying the right people.

Reviewers: People responsible for reviewing business plan. They should have ability to assess feasibilitysuccess of rural business.

Individual Lenders: Individuals who wish to lend money for greater cause.

Individual borrowers: Entrepreneurs seeking loan to kick off their business plan.MFI( Microfinance Institutions): Already using microcredit to alleviate poverty

XYZ Company: Company responsible for bringing above entities to the right platform

1) Partnering with MFIs and Individual lenders.

• Partnering with MFIs to leverage their expertise in microcredit

• Connecting individuals and providing them right platform who want to alleviate poverty



• Using field partners who have fair idea of local area to channelize microcredit to right person

• Field partners will play major role for getting loans to potential entrepreneur

2) Uploading business plans

• Field partners will upload stories of loan seeking people on company’s website

• Sorties will include their business plan, loan request, any past experience etc

• Field partners will have to review business plan within 15 days after submission

• Plan should be uploaded on the website within 30 days after submission

• Filed partners can suggest change in their business plan.

3) Reviewing the venture and business plans

• Volunteer editors will review business plan and sent information to lenders regarding the same

•

Lenders will browse loan requests and select which one they want to fund• They can fund as little as Rs.500 and as much as entire amount of loan

• In case of any concerns, lenders can directly contact to field partners

• Company will aggregates funds and provides them to field partners

4) Replenishing the loan amount and Uploading successful stories

• Field partners channelize the loan amount to the borrower

• Field partners will upload successful stories on the company’s website

5) Repaying the loans

• Field Partners collects repayments from entrepreneurs as well as any interest due

• Interest rates are set by the Company, and that interest is used to cover the operating cost of thecompany

• Interests will be used to cover currency losses

• If borrower is able to repay his loan amount in stipulated time then he will be able to get secondloan of double amount

6) Repayments to Lenders

• Once the payment is received from field partners, company uses funds to credit their lenders

• Lenders can re-lend their fund to another entrepreneur or withdraw their funds as per their wish.

Operation Requirements:

• Complete information of the borrower and their business plan should be provided.

• Regular updates and journal entries of borrowers business



• Legally accept debt from foreign lender

• Field partners will have to serve at least50 people annually

3.8 - Aims & Objectives

○ Short Term

○ Anything you want to achieve within the coming weeks and months (e.g. from now until3 months).

○ Medium Term

○ Anything you want to achieve within the first year of operation. An example could be totarget a certain turnover.

○ Long Term

○

We saw these as where we would like to see the company in 1-2 years.

4. Market Research

4.1- Market Environment

Microfinance

The term microfinance refers to small-scale financial services, both credit and savings -- that are extendedto the poor in rural, semi-urban, and urban areas, who traditionally lack access to banking and relatedservices. The poor depend on microfinance to undertake economic activity, increase savings, mitigatethemselves from income shocks and support self-empowerment. The microfinance movement has been anoutgrowth of the cooperative banking movement started in the 19th century in Germany. Initially limitedto microcredit, today the microfinance label captures all kinds of financial services that are beingextended to the poor, notably, credit, saving deposits, insurance and remittances.

The organizations that provide microfinance services are called Microfinance Institutions (MFI). TheWorld Bank estimates at there are now over 7000 microfinance institutions, serving some 16 million poor people in developing countries. The total cash turnover of MFIs world-wide is estimated at US$2.5 billion

and the potential for new growth is outstanding1.The success of the Microfinance movement ishighlighted by a Nobel Prize to Muhammad Yunus and his bank, the Grameen bank, perhaps the mostreplicated model.

Microfinance in India

Microfinance has made tremendous strides in India over the years and it has become a household name inview of the multi-pronged benefits reaped/ receivable from microfinance services by the poor in our

1 http://www.gdrc.org/icm/data/d-snapshot.html

http://www.gdrc.org/icm/data/d-snapshot.html

http://www.gdrc.org/icm/data/d-snapshot.html



country. It began in the 1980s with the formation of pockets of informal Self Help Groups (SHG)engaging in micro activities financed by Microfinance. But India’s first Microfinance Institution ‘ShriMahila SEWA Sahkari Bank was set up as an urban co-operative bank, by the Self Employed Women’sAssociation (SEWA) soon after the group (founder Ms. Ela Bhatt) was formed in 1974.

MFIs are the main players in the microfinance space in India; their primary product is microcredit. Other

players that extend microfinance services, in addition to their core businesses include banks and insurancecompanies, agricultural and dairy co-operatives, corporate organisations such as fertiliser companies andhandloom houses, and the postal network. Additionally, there are specialised lenders, called apex MFIsthat provide both loans and capacity building support to MFIs.

In terms of lending model, MFIs may be classified as lenders to groups or as lenders to individuals. InIndia, MFIs usually adopt the group-based lending models, which are of two types ― the self-help group(SHG) model and the joint-liability group (JLG)/solidarity group model. Under the SHG model, an MFIlends to a group of 10 to 20 women. Under the SHG-bank linkage model, an NGO promotes a group andgets banks to extend loans to the group. Under the JLG model, loans are extended to, and recovered from,each member of the group (unlike under the SHG model, where the loan is extended to the group as awhole).

Most MFIs following the JLG model adopt the weekly and fortnightly repayment structure; those under the SHG model have a monthly repayment structure. MFIs following the JLG model charge flat interestrates of 12 to 18 million per cent on their loans, while MFIs following the SHG model charge 18 to 24 per cent interest per annum based on the reducing balance method. In addition to interest rates, some MFIsalso charge a processing fee comprising a certain proportion of the loan amount sanctioned, at the time of disbursement.

With respect to legal structure, MFIs may be classified as follows:

• Not-for-profit MFIs

o Societies (such as Bandhan, Rashtriya Seva Samithi, and Gram Utthan)

o Public trusts (such as Shri Kshetra Dharmasthala Rural Development Project, and

Community Development Centre)

o Non-profit companies (such as Indian Association for Savings and Credit, and Cashpor

Micro Credit)

• Mutual benefit MFIs

o Co-operatives registered under State or National Acts (such as Pustikar Laghu Vyaparik

Pratisthan Bachat and Sakh Sahkari Samiti Limited)

o Mutually-aided co-operative societies (MACS; such as Sewa Mutually Aided

Cooperative Thrift Societies Federation Ltd)

• For-profit MFIs

o

Non-banking financial companies (NBFCs; such as Bhartiya Samruddhi Finance Ltd,SKS Microfinance Ltd and Spandana Sphoorthy Financials Ltd)

o Producer companies (such as Sri Vijaya Visakha Milk Producers Co Ltd)

o Local area banks (the only such MFI is Krishna Bhima Samruddhi Local Area Bank)

As of March 31, 2009, Indian microfinance has recorded 30% growth compared to the previous year andthe overall coverage of the sector is estimated to have reached 76.6 million. The total outstanding



microfinance loans is at Rs 359.39 billion and MFIs so far has reached 234 of the 331 poorest districtsidentified by the government.2

Person-to-person lending and microfinance

Person-to-person lending (also known as peer-to-peer lending and social lending) is the name given to acertain breed of financial transaction which occurs directly between individuals ("peers") without theintermediation/participation of a traditional financial institution. An enabling technology for person-to- person lending has been the Internet.

Peer-to-peer platformshave also developed inthe microfinance sector.Some of these platformsenable microfinanceinstitutions to accesscapital; they might havenot got otherwise

through conventionalsources of credit such aslocal banks. Peer-to- peer platforms allow thegeneral public to participate in alleviating poverty by lending,guaranteeing or contributing to micro-entrepreneurs

Kiva Model

Kiva Microfunds(http://www.kiva.org/)

is an organization that allows people to lend money via the Internet to microfinance institutions indeveloping countries around the world and in the United States, which in turn lend the money to small businesses.

The basic model of the Kiva intermediary model, illustrated in Figure 1, is that small lenders lend to Kiva.Kiva lends to MFIs. These MFIs then lend to poor people. Thus the MFIs are using Kiva as a financingagency. Kiva is actually providing a service to small lenders who want to participate directly in themicrofinance movement. In the Kiva model, there is no interest given by Kiva to the lender and nointerest charged by Kiva to the MFI. However, the MFI charges normal interest rates to the poor borrower. Kiva is a not-for-profit.

4.2- Competitor Profiling

The various organizations engaged in P2P lending in India are:

• Rang De (http://www.rangde.org/index.htm)

o Runs on basic Kiva Lending model

2 www.microfinanceindia.org/download_ reports/N_Srinivasan. ppt

http://www.kiva.org/

http://www.rangde.org/index.htm

http://www.microfinanceindia.org/download_reports/N_Srinivasan.ppt







http://www.kiva.org/

http://www.rangde.org/index.htm



o Is a not-for-profit trust

o Employs NGO s as field partners

o Borrowers pay 8.5% flat p.a. (16% APR). The breakup of the 8.5% flat p.a.

interest is as follows3:

5% is for the field partner

2%(3.5% APY) is the financial return for the social investor

1% is for Rang De to cover its operational costs

0.5% goes to a contingency fund that is maintained by Rang De torepay social investors in case a borrower dies or defaults on a loan

o Pays back the investor from the contingency in case of a default

• DhanaX (http://www.dhanax.com/)

o Runs on basic Kiva Lending model

o Is a for profit organization.

o Employs NGOs as partners.

o Borrowers form SHGs

o Borrower Interest is 24% - 25% per annum. The lender earns back his money

with an interest rate of 14%. Remaining form the service fee4.

o DhanaX stands as a third party guarantor of the loan. So it guarantees

principal amount back

4.3 - SWOT Analysis (Industry)

Strengths

• Maturity of the sector: The microfinance sector has passed its evolutionary phase, whensuch as the profit-oriented working model of MFIs was perceived by the market asexceptionable; acceptance for the same has increased. Also, investors now have a wider

choice of MFIs with scalable processes.

• Low Rate of Interest: The only credit alternatives for hundreds of millions of people arelocal pawnbrokers or moneylenders, who usually charge exorbitant 50% - 120% interestrates per annum. This makes for a strong case to generate affordable, easily availableloans for needy borrowers. Especially when one doesn't have to look far to source them.

3 http://www.rangde.org/faq.htm4 http://www.dhanax.com/FAQs/about

http://www.dhanax.com/

http://www.rangde.org/faq.htm

http://www.dhanax.com/FAQs/about

http://www.rangde.org/faq.htm

http://www.dhanax.com/

http://www.dhanax.com/FAQs/about



• High Rate of Returns: MFIs provide better returns than provided by bank deposits(about 8% interest).

Weaknesses

• Steady Access to Capital: In order to maintain high growth rates, MFIs would need asteady access to capital. Small scale MFI’s have traditionally depended a lot on donationsand funding from CSRs for their operations.

• Heavy dependence on banks and financial institutions: MFIs are dependent on borrowings from banks and FIs, and do not raise debt from the capital market. So theyhave to face higher rate of interest. For many MFIs, funding sources are restricted to private banks and apex MFIs; the public sector banks have not been aggressive lenders toMFIs.

• Weak governance architecture: The legal structure and the attendant regulatoryrequirements of an MFI have a strong bearing on governance practices because they

influence management practices and levels of transparency. MFIs that are either unable(for lack of adequate sponsor funding) or unwilling to convert to a corporate structuretend to remain 'closed' to transparency and improved governance standards, andtherefore, continue to be unable to attract capital.

Opportunities

• High percent of financial exclusion: In India, around 120 million households are facingfinancial exclusion: this translates into a credit demand of around Rs.1.2 trillion 5. MFIsare uniquely positioned to facilitate financial inclusion and tap this huge market by providing financial services to a clientele poorer and more vulnerable than the traditional bank clientele.

•

Government Policies: Government of India's has initiated many steps to achieve greater financial inclusion.

• Growing Economy: India is today a rapidly growing economic power with more andmore Indians enjoying prosperity and higher investable income.

• Growing Retail Market: The growing retail market in India also provides opportunitiesfor MFIs to act as intermediaries in the retail supply chain.

• Expanding Internet Usage: Growing internet users in India (currently pegged at 81million users6) increases the number of potential investors for P2P lending.

Threats

• Absence of regulatory control: Microfinance activities are undertaken by organisationsthat are registered under several legal forms. However, currently, only NBFCs are under the regulatory and supervisory purview -the NBFCs are regulated by RBI. The absence of prudential norms and accounting guidelines for non-NBFC MFIs leads to lack of

5 http://www.crisil.com/credit-ratings-risk-assessment/CRISIL-ratings_india-top-50-mfis.pdf 6 http://www.internetworldstats.com/stats3.htm#asia

http://www.crisil.com/credit-ratings-risk-assessment/CRISIL-ratings_india-top-50-mfis.pdf

http://www.internetworldstats.com/stats3.htm#asia

http://www.crisil.com/credit-ratings-risk-assessment/CRISIL-ratings_india-top-50-mfis.pdf

http://www.internetworldstats.com/stats3.htm#asia



uniformity in accounting practices and highly-leveraged balance sheets among MFIs.Savings is an important component of microfinance. Currently, however, savings anddeposit services can be offered only by banks and co-operatives.

• Political sensitivity of interest rates: Given MFIs' operating and cost structures, mostMFIs need to charge high interest rates to recover costs and remain in business. But,

interest rates charged to the poor constitute a politically-sensitive issue, and therefore, achallenging proposition for MFIs.

• Pressure on processes and controls due to aggressive growth plans: MFIs' risk management practices have weakened over the past couple of years, on account of shiftin focus towards business growth and network expansion. Some credit sanction andmonitoring practices have been diluted. These include lending to clients with multipleloans from different MFIs, reduction in the average waiting period for loans, and doingaway with staggered disbursements to JLGs and loan utilisation checks postdisbursement.

• Aversion to Social Lending: The concept of social lending has not yet caught on inIndia, where people have always been hankering for more, owing to a legacy of poverty.

Therefore, it will take some time for the common man to start giving, since he himself has not got enough.

• Preference to Personal Relationships: The family and friends come first, another cultural legacy of social inter-dependence in poor countries. These relationships do notneed a website.

• Saving for the future: There is a strong need to leave something for the futuregenerations of offspring and their descendants. The culture of not spoiling the children bygiving too much, has not yet come in. Therefore, the social lending is limited to the veryupper middle classes or lower rich classes: usually highly educated individuals.

5. Marketing PlanServices Offered:

We provide platform wherein we facilitate loans to people from rural areas who are interested in doingsome kind of business of their own. These loans come from the individuals who are interested in spendingmoney on the venture of our rural entrepreneur.

We host the profiles of these rural entrepreneurs on our website and our field partners disburse these loansto the entrepreneurs. Lenders on the other hand choose from different profiles and lend the moneyaccordingly.

Follow On Services:

Apart from these services we are also planning to impart some basic knowledge on entrepreneurship to

these new and probably first time entrepreneurs, which will help them to better utilize their capital andrun their enterprise efficiently and successfully.

Market Research:

In India significant number of rural population is interested in doing their own business but due tomonitory constraints their businesses do not take off. Poor people are very motivated and have a lot of potential. We can tap this potential for the overall good of the society by creating new jobs, alleviating poverty and creating a sense of self-esteem in this section of society.



Marketing Plan:

Market Size

The total size of the market is very huge if we consider the number of entrepreneurs in whole IndianRural region

Growth Prospects

There is a lot of scope of development in this market as a large number of people want loans for their businesses and Banks are unable to provide loans to such a large number of applicants. Moreover,thehectic paper work and collateral being major reasons why people don't want loans from the banks.

Target Market

We will target the Rural Entrpreneurs of North and Central India, which will include Uttar Pradesh,Bihar.

Promotion

In order to promote our platform among the people we will use different advertising medium.

Promotion strategy for entrepreneurs:

1. Promotion through local or regional radio channels

2. Promotion through local news papers.

Determining the Market size

Analyzing the growth prospects

Selecting the Target Market

Promotion Strategies



3. Awareness camps conducted by our field partners

Promotion strategy for Lenders:

In order to engage Lenders, which are mostly from urban regions,we need more specific and focused promotion strategy.

1. Creating awareness through social networking sites like Facebook, Orkut, MySpace etc.2. Promotion through blogs.

3. Advertisement in leading newspapers.

4. Some target professionals will be sent mails containing information about our organization.

6. Financial Plan

Number of households facing financial exclusion in India is 120 mn( as per CRISIL microfinancereport -2009). As per World Bank statistics on India, there are 150 mn households with an



average credit demand of R 20,000 per household. The credit demand is adjusted with a 20%upside for urban poor households.

Even if we take 120 mn households with a requirement of Rs 20,000/ household, the totalrequirement for microcredit in India is R2400 bn which is the figure that has also been estimated by World Bank.

Now in 2008-09, the amount estimated to be disbursed by micro finance institutions (MFIs)stands at around 287 bn with an outstanding of 114 bn. So, the scope of financial coverage bylending is still huge (around 2113 bn).

If we look into the costs involved in such operations, they can be broadly divided into 3 types:

a) The cost of funds for on-lending

b) The cost of risk (loan loss)

c) Administrative costs (identifying and screening clients, processing loan applications,disbursing payments, collecting repayments, and following up on non-repayment)

No of active internet users in India is 52 million as of Sept 2009(IAMAI report, 08-09)

6.1 - Start Up Costs

These include:

1. Equipment

2. Software

3. Stationary

4. Marketing and liasioning costs.

START-UP COSTS:

Average cost(R) No of units Total cost(R)

Laptops 35000 3 105000

Stationary 1500

Brochures 35 1000 35000

Newspaper ads 18000 10 180000



Conveyance anddearness allowances

300000

Promotional pamphlets

1 10000 10000

Miscellaneousexpenses

200000

TOTAL 831500

The total start-up cost of the enterprise is expected to be around R 831500. This capital will be raised

from:1. Own cash of start-up entrepreneurs2. Loan from govt./bank 3. Philanthropic organizations.

Business model of loan disbursement:

“Prayas” will be providing return rates to its lenders based on the credit assessment of the borrowers,varying from 8.5% to 15%. The average ROI for its lenders is expected to be 12%. The higher the creditrisks of the borrower, higher the ROI.However, the number of bad debts for the first 3 years is not expected to be more than 10% for any year’stotal loan disbursements.

Loans disbursed to a particular borrower have to be repaid within 3 years. The borrower will repay theloan amount in three equal installments annually with the interest due for the borrowed amount for theyear. For eg, if a person takes a loan of 30000 at a rate of 10%, then he is expected to pay 10000 plus3000 interest charges at the end of year 1. Now for year 2, the amount on which interest will be charged is20000. So at the end of year 2, he is expected to pay 10000 plus interest of 2000. Similarly in the 3rd year,

he will pay 10000 plus interest charges of 1000

6.3 - Cash-flow Forecasts

In the 1st year, we have targeted 5000 borrowers; in the 2nd and 3rd years, the number of borrowers targetedare 7500 and 12000.

The cash flows in the first 3 years are given in the table below:

Year No. of

borrowers

Average

size of

loan(R)

Total

amount

disbursed(R

)

Average

ROI

% bad

debts

Total

interest(R

)

Total

repayment(R

)

Total

bad

debts(R)

1 5000 30000 150,000,000 22 10 31350000 42500000 7500000

2 7500 30000 225,000,000 22 10 69586000 116300000 8700000

3 12000 30000 360,000,000 22 10 117045500 217025000 27975000

The cash flow has been generated taking the business model discussed earlier. So the total loan amount of 150,000,000 is repaid over a period of 3 years along with 22% interest. The total interest in the abovetable includes interest repayments for loans disbursed in that year as well as earlier years. Total amountdisbursed is the amount disbursed in loans that year only. Similarly, total repayments and bad debts



include total repayments and bad debts for that year as well as earlier years. The cycle of any loan is 3years.

6.4 - Other Financials

Operating expenses:

Operating expenses for the first 2 years are shown below:YEAR 1:

Expense head Total(R)

Website expenses2000 p.m(12months) 24000

Wages 15000 p.m(10 per) 1800000

C.A and D.A 400000Educational materialand teaching aid 500000

Office rent 25000 p.m 300000

Electricity 3000 p.m 36000

Maintenance andmiscellaneous 200000

Operating expenses 3260000

Revenue 31350000

Interest payments 11406000

Field partner payments 4987500


Bad debts 7,500,000

Profit before tax 4,196,500

YEAR 2:

Expense head Total(R)

Website expenses2200 p.m(12months) 24000



Wages 17000 p.m(15 per) 3060000

C.A and D.A 700000

Educationalmaterial andteaching aid 1000000

Office rent 28000 p.m 336000

Electricity 3500 p.m 42000

Marketing expenses 500000

Maintenance andmiscellaneous 300000

Operating

expenses 5962000

Revenue 69586000

Interest payments 37956000

Field partner payments 11070500


14597500Bad debts 8,700,000

Profit before tax 5,897,500

Operating expenses for year 1 and year 2 are R32, 60,000 and R59, 62,000 respectively. Here we havealso made provisions for bad debts.

Operating expenses include cost of website hosting, wages for in-house administrative staff, office rent,electricity charges for office, and conveyance and dearness allowances for staff while traveling andmarketing expenses (only year 2). For year 1, we have not taken any marketing expenses as the sameamount has been allocated under start-up costs (newspaper ads, pamphlets, brochures). Inflation isassumed to be 10% y-o-y and all costs have been adjusted accordingly.

Profits before tax are R41, 96,500 and R58, 97,500 for year 1 and 2 respectively.

It is assumed that the amounts for all loan amounts for a single year are disbursed at a single point of time; however, realistically there will be overlaps of the disbursed amounts in both financial years.Moreover, the expected cash flows are on the basis of achievement of targeted sales and bad debts provisioning.

7. Appendix

The appendix is where you put additional information that is referenced in the business plan. This could be things such as:

● Financial charts / graphics

● CV’s / Resumes

● References

● Images of work

● Partnership Agreements



Documents

Prayas- Business Plan