kuber - a model

Kuber…

The Progenitor of Wealth !!

Team Name-Kuber

Team Member-Akshay Badola

Student

College Of Technology, Electrical Engineering

III/665,Chakeferi,G.B.Pant University, Pantnagar

[email protected], 7579177553

mailto:[email protected]

Introduction & Problem Statement-

i) What is the major problem/challenge that you are trying to address in this proposal?

The proposal Kuber tries to tackle the twin devils of Unemployment among rural, semi-urban people &

pitiable situation of agriculture and its allied sectors by providing access to financial resources to the

people as and when required by them in terms of flexible loans. It also provides an opportunity to the

Indian Diaspora and the New India to be a part of the Indian growth story in a different fashion.

ii) Why do you get this problem important & critical in context of national development?

It’s a matter of grave concern that the number of people involved in agriculture is decreasing day in and

day out & the number of farmers suicides are increasing at an unprecedented rate in India, the main

reason being the vicious debt cycle in which the farmers are trapped. An improvement in the life of

farmers would have manifold positive effects in national development. Kuber is a novel attempt to

breach the debt cycle & give farmers a respectable life.

Unemployment is a major problem, more so in rural & semi-urban areas. Unemployment is the mother

of a large number of social evils like theft, gambling, drug & alcohol addiction etc. If the unemployed are

motivated enough to set their own small scale industries, cottage industries, shops, undergo vocational

training or get involved in other productive activities. This would not only help the economy but also

remove a large number of social evils.

iii) What is your motivation to get into providing a solution to this problem through social

entrepreneurship proposition?

The biggest motivation to enter the field through social entrepreneurship is that we can create a future

for ourselves and at the same time help a million others in having a better future. It also allows us to

follow our passion for technology & interacting with a cross section of society. It also fetches real

respect from the people with whom we are working & the society at large. Thus all these reasons

coalesce to give us a satisfied life.

Social Impact & Solution Summary-

i) What is the summary statement of your proposal?

Kuber is an online social lending platform that enables common individuals to directly make an impact at

the bottom of the pyramid. It empowers you & me to make social investment to potentially better the

lives of more than 60% of the people of India. It’s an effort to bring together the new India & real India

and empower them both to make a difference.

Kuber is an interactive website where through our transparent model we first identify the specific

purpose that the money is needed for, then work backward to raise the sum from the public. We put the

profile of rural and semi-urban people who seek help to meet their need of financial capital. This

information is provided to Kuber through a network of partner NGO’s, SHG’s etc. (Kubers groundforce)

who work as the eyes and ears of Kuber. A compelling write-up of the loan request is written by us and

Kuber volunteers {(College Students, Housewives etc.) They are provided with Certificate of appreciation

& once in a while field trips to the borrowers place} which includes the reason for loan, source of

income, some background personal information of the borrower & previous loan repayment details (if

any) along with a gaiety photograph of the borrower. Individuals with access to internet (potential

lenders) just have to sign up at Kuber & create an account on the web platform then they can select the

profile of the person they want to lend to & fund a part of the loan (as low as ₹ 1000). The interest rate

varies from 10-12% depending on the social effect & economic condition of the borrower. The terms

and duration of repayment are decided as per the discussion between the borrower & our groundforce

which may vary from 6 months to 3 years. Thus through the website lenders can find hundreds of

beneficiaries who need financial help.

The portal allows to simultaneously see the impact the money is having on the borrowers’ life through

direct interaction via regular telephonic or online session between lenders and borrowers facilitated by

Kubers groundforce. Since the money is in the form of a loan & not a donation so the lender gets back

his/her money at the end of loan term. The amount is moved into the lenders account & they can cash-

out or recycle capital to re-lend another borrower for which they are suitably motivated through

rewards.

ii) How will your proposal address to above problem? What are your deliverable objectives?

Kuber provides crowd sourced, low-cost, risk-tolerant capital to the potential borrowers who are

farmers, vegetable vendors, people involved in fish, cattle, bee & poultry rearing etc. Thus Kuber directly

bridges the wide gap between the agricultural sector workers and financial resources. Thus alleviating

the pain and agony of agriculture sector.

It also serves as a source of employment generation for rural and semi-urban people who may be

interested in setting up small cottage industries like manufacturing incense sticks, mobile repairing

shops, manufacturing snacks and local delicacies, embroidery work etc. by providing them with initial

capital or with money required for procuring raw material or even for expansion of business. Hence

Kuber takes a bold step in wiping out unemployment from the face of India.

Our deliverable objectives include-

a) More than 98% repayment rate on all the loans processed.

b) Expanding into loans for sanitation & Healthcare apart from the present employability & livelihood

loans after 3 years of operation.

c) Changing lives of more than 5000 individuals through loans within the first 3 years of operations.

iii) How do you defend your proposal as a model of social entrepreneurship?

Kuber is a tailor-made case of a social entrepreneurship venture. It creates revenue for its owners and at

the same time help a million other people get access to financial capital. It thus at large improves the

standard of living of a large number of Indians and provides them with a life of dignity & respect. It also

helps in eradicating the vices of unemployment & woes of agriculture sector.

iv) What is your step to step design and framework to ensure peoples participation, leading towards

grass-root empowerment?

Public participation is at the heart of Kubers operation. Kuber largely involves people at two levels-

lenders and borrowers. On the lenders front, Kuber motivates people for loaning by explaining its

concept through street plays, PowerPoint presentations, pamphlets, Videos etc. to college students,

BPOs & MNC’s, Corporate employees, Entrepreneurs etc.(Potential Lenders).Also Kuber pursues an

aggressive online campaign to aware potential lenders about itself. Kuber also works with the payroll

programs of corporates where as low as ₹ 1000 can be deducted from employees salary every month.

Additionally Kuber ties up with e-commerce websites where buyers can opt to add ₹50 to ₹100 to

Kubers account on checkout. These retail lenders are not paid interests but rewards, a decision taken

after much consideration as we believe earning 2-3% interest on ₹ 1000 did not generate much traction.

Thus Lenders earn redeemable points on e-commerce sites & secure tangible rewards. Frequent lenders

are also provided with field trips where they can actually see the effect of their loans. Kuber also

remains in touch with lenders through various social networking sites and politely reminds them of

lending again on occasions like birthdays etc.

On the borrowers side we rely on word of mouth publicity and the reach of Kubers groundforce. The

groundforce & lenders are rewarded with advice and interactive sessions with experts of various

domains which may vary from agricultural scientists to successful entrepreneurs. We also engage with

borrowers even after repayment to see if they are doing well & see if they need any further assistance.

We also a take a onetime token registration fee of ₹500 from each new borrower so that they take

Kuber seriously and at the same time the amount helps as initial capital for Kuber. We also organize

nukkad-nataks to attract potential borrowers in new localities. Also previous borrowers are given an

opportunity to share their stories thus creating a conducive environment for Kuber.

v) How would you measure the improvement after applying your social entrepreneurship

proposition? Give top 3 measures to assess the social impact your proposal?

After the successful implementation of Kuber its immediate effect could be measured by an increase in

the income of borrowers along with improvement in their standard of living. The amount of

employment generated would also be used as a parameter to measure the improvement. The top three

measures to assess the social impact are-

a) The number of people lifted out of poverty and unemployment measured by the number of

successful loans.

b) The satisfaction of the lenders (i.e. if they are lending again) and online response and reach (number

of likes, retweets, shares, comments etc. on social networking sites)

c) Turnout at the field visits and Kuber summits (yearly meet of all the stakeholders involved)

Entrepreneurship Value Proposition-

i) Is there any priorly existing proposition, trying to give solution to your proposed problem?

The propositions which work to provide solution to our targeted problems include Banks, Microfinance

institutions & informal lenders but they are not having the desired effect.

ii) Detail out the business implementation plan for your social entrepreneurship proposal. Entail

Vision, Mission & Business model with objectives?

VisionChanging the way people fund and impact communities by making them give a hand up rather

than a hand out to the needy.

Missionmaking people believe that loaning a little can change a lot & helping our borrowers in

creating a life of dignity and economic wellbeing.

Objectives

a) Creating a highly interactive and socially integrated website with multimedia content having an inbuilt

secure payment gateway by which credit/debit cards can be used to loan money. Also integration with

online financial service providers like PayPal to facilitate foreign lending within the first two months of

operation.

b) Securing regulatory clearance from government bodies like RBI to clear the way for foreign social

investors to invest through Kuber within the first two years.

c) Getting at least five reliable groundforces(i.e. SHG’s, NGO’s, farmers/artisans co-operatives) with a

proven track record of minimum three years and capable of enrolling and managing around 200 loans in

a year during the first three years.

d) Involving High Networth Individuals (HNI’s), Seasoned Bankers, Big Philanthropic organizations as

Kuber Advisors & as external observers. Also seeking financial assistance from them to create the initial

social fund to the tune of ₹ 1000000(10 lakh) which would be required to finance loans in the first year.

The amount of social fund would be raised by the end of first 6 months.

e) Contribution of online retail lenders to the total amount being lent-

Ist year-30%

IInd Year-40%

IIIrd Year-more than 50%

Business Implementation Plan-

Kuber would be based in a semi-urban area preferably near a location where we expect maximum

concentration of borrowers. We would start by looking for a seasoned web development firm to

develop Kubers web portal as per our objective and look after the various sophisticated technological

aspects of operations simultaneously we would start our search for able NGO’s, SHG’s etc. to work as

Kubers groundforce in our targeted regions explaining to them the concept of Kuber. Through the

contacts of our groundforce we would start registering borrowers with a token onetime fee ₹ 500. On

the other front we would be aggressively looking for HNI’s, philanthropic organizations etc. to invest in

our idea. They would be persuaded to provide us with a onetime grant for building Kubers social fund.

Also corporate and e-commerce companies would be inspired to get involved with Kuber as a CSR

(Corporate Social Responsibility) and employee engagement initiative. At the end of each financial year

we would organize Kuber summit where all the involved stakeholders of Kuber would be invited to share

their experiences as borrowers, lenders, volunteers or as contributors to the social fund. Kuber would

employ a full time computer operator to upload the daily updates, borrowers request along with day to

day handling of website during the initial years of operations (All financial details are provided under the

financial sustainability heading).

iii) How unique/better is your solution compared to other similar proposition?

A proposition which is similar to Kuber is kiva.org which is the pioneer in online person to person micro

lending but we have some distinct advantages-

a) Kuber is India specific & caters to a particular section of society having a network of groundforce to

implement its operations while kiva does not have its presence in India, its targeted borrowers are in

African countries. Also being a foreign entity kiva would have to go through a large number of tests and

screenings which would be a major deterrent for them.

b) The average interest rate of kiva is 34% while Kubers is as low as 10%.

c) Kuber has a self sustaining business model while kiva depends on grants and donations to cover its

operations cost & doesn’t have a revenue model. Kuber is built with a vision to be self sustainable by

charging a small interest fee from the borrowers to cover its operational costs.

iv) Who are your target clients? How do you plan to gain their trust in the current scenario?

Our target clients’ are-

a) As lenders: Everyone having a bank account & internet access is a potential client. The bulk of

our loans would come from corporate employees, NRI’s, HNI’s. Also e-commerce websites and

working with the payroll programs of some companies would bring in new funds.

b) As volunteers: Kuber volunteers would mostly be college students & housewives who can ideally

give an hour a day in writing a persuasive write-up for a loan request using the information

provided by Kuber groundforce.

c) As borrowers: People involved in agriculture sector like farmers, fishermen, Vegetable vendors,

cattle rearers etc. Also individuals running cottage industries or want to get employed are

potential Kuber borrowers.

Kuber would earn the trust of its stakeholders by working in a completely transparent manner. We

will regularly keep our lenders informed about the effect of their loans and make lending a good

personalized experience for them through our websites & other social networking sites. We would

also annually organize Kuber summit where all the stakeholders would be felicitated and allowed to

mingle with each other.

v) Provide with the following analysis as relevant to your plan –Market, Environment, Target

Beneficiary, Industry, and Competition analysis?

Market Analysis-

There is a huge demand and supply gap of financial capital for the working poor which need to be

bridged. This market of working poor provides a plethora of growth opportunities as it’s still

untapped.

Environment Analysis-

The present environment where CSR has become quiet fashionable & investors are etching to invest

in social sector is the best time for a startup like Kuber. Also NRI’s are looking for ways to give back

to India.

Target Beneficiary Analysis-

Kuber would increase the number of Indians who are more productive & have a steady source of

income leading to a huge demographic dividend in the future for many years to come.

Competition Analysis-

On the online mode kiva is a competitor but Kuber has some working advantages over kiva as

mentioned in an earlier question.

On the offline front Kuber faces a challenge from Micro Finance Institutions(MFI’s), Banks,

traditional moneylenders etc. but Kuber has some obvious advantages over them including low

interest, flexible loan repayment terms, no redtapeism, fast processing & a human touch.

vi) What are the various potential challenges you expect to face?

We are bringing a relatively new concept to the Indian market and expect our model to be tested by

one and all-

a) Getting the common man onboard Kuber & familiarizing him with its philosophy and

functioning, making him understand the middle way between charity & investment thus making

them lend without a collateral.

b) In spite of Kuber’s strong measures to ensure that each borrower in the local groundforce

operating zone is meticulously screened there is still a chance that borrowers may default.

c) Kuber delivers loan amounts to local groundforce, while working with groundforce includes in all

likelihood that our loans will be effectively used & repaid there is a possibility of new

institutional risks where while the borrower repays the loan the groundforce may turn faulty.

Although Kuber partners with only those groundforce who have established presence for over 3

years and a minimum engagement with a 1000 folks.

d) It would also be maneuvering & technological challenge to get the requisite clearances from the

government & managing the website efficiently.

Financial Sustainability-

i) What will be the initial investment in implementing your proposition (in ₹)?

The investment required for the first year of operation is around ₹ 28 lakhs.

ii) What is your plan to arrange the initial funds?

Initial Funds (For the first year)-

SOURCE AMOUNT

Social Fund (HNI’s, Philanthropic organizations etc.)

₹ 10 Lakhs

Online retail investors ₹ 6 Lakhs

Awards & Business Plan Competitions* ₹ 5 Lakhs

Personal Investment ₹ 5 Lakhs

One time registration Fee from borrowers ₹ 2 Lakhs

GRAND TOTAL = ₹ 28 Lakhs

*We would be presenting our proposition Kuber at various B-Plan events organized by various

management & Technological institutes (ex. - Eureka by IIT-M etc.). Participating in them would not only

be a potential fund source but also provide us with useful contacts & practical advice.

iii) What is your revenue generation model for the project along with timelines?

Our major source of profit would be the interest we would get from the disbursed loans. We would be

getting 5% of the processed loans as interest while 3% would go to the groundforce & 2% would be for

the lender which would be given to him in the form of redeemable points and discount vouchers.

TIMELINE PROFIT AT THE END OF FINANCIAL YEAR

1st year of operation ₹ 1 Lakhs

2nd year of operation ₹ 1.5 Lakhs

3rd year of operation ₹ 5 Lakhs

iv) Is your plan self-sustainable & later capable of generating profits?

Yes, Kuber works on a self-sustainable revenue model by charging a small one time registration fee from

the borrowers & a meager interest rate which is less than half of what is charged by other service

providers to this market. We although initially depend on external funding in the form of grants.

v) Provide with 3 year cash flow diagram & detailed budget analysis for your proposition?

Ist Year

Income/Investment-

SOURCE AMOUNT

Social Fund (HNI’s, Philanthropic organizations etc.)

₹ 10 Lakhs

Online retail investors ₹ 06 Lakhs

Awards & Business Plan Competitions ₹ 05 Lakhs

Personal Investment ₹ 05 Lakhs

One time registration Fee from borrowers ₹ 02 Lakhs

GRAND TOTAL = ₹ 28 Lakhs

Expenditure-

SOURCE AMOUNT

Loan Disbursed^* ₹ 20 Lakhs

Securing Office space & its maintenance(Including the salary of one fulltime computer operator)

₹ 03 Lakhs

Website Creation, getting registered with financial service providers

₹ 02 Lakhs

Kuber Summits, Field trips, Monitoring groundforce, interacting with borrowers

₹ 02 Lakhs

Logistical costs of interacting with e-commerce sites, corporate, philanthropic organizations etc.

₹ 01 Lakhs

GRAND TOTAL =₹ 28 Lakhs

^*We believe we will be able to finance around 200 loans of average size ₹ 10,000 in the 1st year.

Profit-

SOURCE AMOUNT

Interest @ 5% from processed loans ₹ 01 Lakh

IInd Year

Income/Investment-

SOURCE AMOUNT

Online investors( We believe 80% of our First year lenders relend + New lenders)

₹ 12 Lakh

Angel Investors( They would be repaid with a share in the company)

₹ 10 Lakh

Social Fund( Assuming 98% repayment & 80% loans financed last year being of one year duration)

₹ 8 Lakh

Awards & Business plan events ₹ 5 Lakh

One time registration fee ₹ 2 Lakh

GRAND TOTAL =₹ 37 Lakh

Expenditure-

SOURCE AMOUNT

Loan Disbursed (We believe we would be able to finance around 300 loans of average size of ₹ 10,000 )

₹ 30 Lakh

Office space & its maintenance(Conditions same as 1st year)

₹ 03 Lakh


₹ 02 Lakh

Operational Cost of running Website & online promotion

₹ 01 Lakh

Logistical costs of interacting with e-commerce sites, corporate, philanthropic organizations etc.

₹ 01 Lakh


Profit-

SOURCE AMOUNT

Interest @ 5% from processed loans ₹ 1.5 Lakh

IIIrd Year

Income-

SOURCE AMOUNT

Direct Funding from foreign Organizations (ex.-Ford Foundation, Uttrakhand Association of Americans etc.)

₹ 20 Lakh

Online retail lenders( In IndiaWe believe 80% of our lenders relend + New lenders)

₹ 18 Lakh

Online retail lenders( From Foreign) ₹ 10 Lakh

Social Fund( Assuming 98% repayment & 80% loans financed last year being of one year duration+ New funding)

₹ 08 Lakh

One time registration Fee ₹ 02 Lakh


Expenditure-

SOURCE AMOUNT

Loan Disbursed (We believe we would be able to finance around 400 loans of average size of ₹ 10,000 )

₹ 40 Lakh

Office space & its maintenance(We will be expanding, hiring another computer operator )

₹ 05 Lakh

Travelling to foreign, campaigning over there, persuading potential investors to invest etc.

₹ 05 Lakh


₹ 03 Lakh

Operational Cost of maintaining Website & online promotion

₹ 02 Lakh


Profit-

SOURCE AMOUNT

Interest @ 5% from processed loans ₹ 02 Lakh

Income – Expenditure ₹ 03 Lakh


vi) How does your business plan will balance profit generation & social targets?

Kuber is quite unique in the sense that in Kuber, profit generation & social targets are symbiotic. Kuber

would only generate profit if the borrowers would be repaying as per schedule & that implies Kuber is

well on track of achieving its social targets.

vii) How will profit be shared with grass-root partners & other stakeholders?

The profits generated would be shared with Kubers groundforce as they will directly get 3% of the

interest collected by them from the borrowers along with interactive sessions from prospective

investors during Kuber summits. The lender would also be getting redeemable points equivalent to 2%

of interest on the amount which he has lent & can be used on partner e-commerce sites to get

discounts.

Risk Assessment-

i) What are the major dependencies for the success of program?

The major dependency is that all the stakeholder investors buy into the philosophy & working model of

Kuber & start investing in it.

Fast clearance from the government authorities for foreign investment is a factor on which the growth

level of Kuber depends.

The borrowers & groundforce should not turn faulty.

ii) Is there a plan B in place if things do not go as expected?

Yes, If the idea of Kuber does not take off after repeated attempts we would by virtue of the network of

Kubers groundforce and our contacts in the philanthropic organizations turn into a consultancy firm

doing feasibility surveys and implementing rural & semi urban projects for various agencies. Also we

would utilize the reach of our website to get clients for Kuber.

iii) What checkpoints would be used to assess the progress over the course of time?

The increase in the number of loans being processed annually along with number of borrowers who

reborrow would be a litmus test for Kuber.

At the end of 1st Year we want to process 200 loans of average size of ₹ 10,000.

After 3 years of operation we want to have more than 50% of the lending taking place through online

retail investors.

We want to achieve all the Objectives mentioned in the Business Plan with their timelines along with the

social targets set in “Social Impact & Solution Summary Part.”

iv) What dynamic variables/assumptions have you considered which can adversely affect your

program in the short & long term?

It might happen that we are not able to find effective groundforce & Institutional investors for our social

fund in the short term.

In the long term it may happen that the government authorities do not give us the required clearance to

get foreign funding.

X-X-X

kuber - a model

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