Meadow: Power to You

Types of rural enterprise

Individual Group Cluster Corporative
Objectives of Rural Entrepreneurship in
India
To orient towards entrepreneurship.
To increase earnings.
To create avenues of self employment.
To ensure regular supply of goods & services.
To develop entrepreneurship with improved methods
of production.
To preserve craftsmanship & art heritage.
Planning a Rural Enterprise
Project identification
Information Accessibility
Ideas
Capital Organization
Support System
Market Assessment
Market Research
Feasibility Report
Registration Procedure
Off-farm livelihoods
Catering to local needs for goods and services within
the village through local enterprise
Establishing links for supplies of goods and services to
towns without the necessity of migration
Generating wage employment in non-farm enterprises
which are not owned by the poor but employ them,
Generating wage employment in the public sector by
creating and managing publicly owned
properties/infrastructure
Establishing linkage-intensive industrial activities in
rural areas
Challenges of promoting off-farm livelihoods

Identifying market opportunities

From Experimentation to Adaptation to
Commercialization
Managing linkages
Responding to changing markets
Capital requirements
 The Context
•The Dharmapuri district in Tamil Nadu
adjoining Bangalore on the southern side is
drought prone.

•As part of an 'industrial dispersion

programme‘, the State Government
promoted industrialization of the Hosur
area of this district.

•The resulting rapid industrialization

created a demand for both labour as well as
services which became a redeeming feature
for the district's population.
 Continued…

•In 1989-90 PLAN International entered into a partnership with MYRADA in

Dharmapuri district to promote child-centred community development
programmes.

•The project area expanded to cover six blocks and 300 villages.

•In 1990-91 MYRADA became the nodal agency in Dharmapuri district to

collaborate with the Tamil Nadu Women's Development Corporation on an
IFAD-funded programme of credit support.

•This put the project's focus fi rmly on working with rural women from poor
households.

•The project's direct intervention expanded to cover nine blocks and 580
villages.
 Continued…

•In 1983 MYRADA began working in around 60 villages of Thally

block of Dharmapuri district with the support of HOPE
International Development Agency, on programmes related to
land-based livelihood improvement.

•The area around Hosur- a village where it worked-is dotted with

more than 400 small, medium, and large industrial enterprises.

•In 1991-92, at the request of MYRADA, students from IRMA did

a small project to explore possible collaborations between some
of the industries in Hosur and the rural populations with whom
MYRADA was working.
n
ed
u
…
C
io
nt

•TITAN (Tata Industries, Tamil Nadu) - a major watch manufacturing

company - was one of the companies to respond very positively.

•The collaboration between TITAN and the women organised by MYRADA

into SHGs fi rst began in 1992.

•A contract given to a group of women in Denkanikotai block to launder

uniforms of the TITAN factory workers.

•This collaboration gave both MYRADA and TITAN the confi dence to work
together on more programmes that could employ the rural poor
productively .
 THE INTERVENTION

1995:- Discussions between MYRADA and TITAN for

a possible collaborative venture to engage young
women from poor households in the assembly of
watch straps.
1996:- Management of Enterprises and Development
of Women (MEADOW) started informally in 1996
with a small group of young women selected by
MYRADA.
Need to register
Issue of who to make payments to.
MYRADA encouraged TITAN to deal directly with the
young women, including entering into contracts and
making payments.
TITAN's auditors objected strongly once again that
payments were being made informally to groups with
no legal status.
To take care of this problem, in September 1998,
MEADOW was registered as MEADOW Rural
Enterprises Private Limited .
The growth of MEADOW
 1996: 24 women working in three task groups; only bracelet line
assembly.

 1997- 1998 : Hand-pressing of bracelet components .

 1999 : Table-clock assembling, Silver and gold rope-making,

precious-stone fixing.

 2000 : Loop fixing Calendar main plate sub-assembly

Selection of workers
 Expansion of the MEADOW workforce has been gradual,
based both on the expansion of existing activities and on the
introduction of new activities

 For the selection of workers the following process is followed:

 MEADOW and TITAN agree on the number of workers

needed in order to meet the work quotas

 MEADOW contacts MYRADA-PLAN Dharmapuri Project and

informs them of the need to recruit more workers

 The project uses its fi eld staff to pass on messages to self-help

groups (through the cluster level SHG federations)
 From MEADOW and MYRADA, the preliminary conditions laid out are:

 Potential recruits must be young women from poor households.

 They must have at least high-school level of literacy and education

(8th standard).

 They must be willing to reside at or travel to the work premises.

 They must be willing to commit to at least three years of service.

 They must not already have any immediate family member working in
MEADOW.
 TITAN screens the potential candidates for sharp eyesight, nimble fingers,
attention to detail, patience, and their motivation to help their families. Those
who complete the training successfully go on to become full-time
employees.

 In recent months, the training focus has been making each worker
multi-skilled, so that task groups with slack quotas can help those with
high quotas.

 New recruits are usually in the age range of 17 to 24.

INVESTMENT DETAILS
MEADOW was initially supported by MYRADA-PLAN Dharmapuri
Project to the extent of Rs 15 lakhs (1995 to 1998). This was invested in
the following area :

 Purchase of 1.7 acres of land

 Construction of a workshed for 100 young women (for this, Rs 2.5 lakhs was also
contributed by MEADOW)
 A borewell on the land
 24 (out of the 36) hand-press machines
 A magnifier
 A generator
 Start-up set of small tools
 Basic set of furniture
 Initial training costs (stores management and material accounting)
 Payment to MEADOW's Chief Executive Officer up to 1998

All the above investments from MYRADA were made prior to the
independent registration of MEADOW.
BUILDING FUND BASE
 Women - guided by the Chief Executive Officer - took an early decision to
surrender a part of their wages to build up a fund for the company.

 Payments by TITAN are made on piece rates, based on the jobs executed.

 In 1995-96, for every rupee received in payment, the young women surrender 55
paise to MEADOW and take home 45 paise, subject to a minimum take-home
wage packet of Rs 900 per worker per month (actually, they were able to take
home up to Rs 1,200).

 By 1998-99 for every rupee earned, they would surrender 15 paise and take
home 85 paise subject to a minimum take-home wage packet of Rs 1,200 per
worker per month.

 At present the minimum wages for a full month's work is Rs 2,500. At peak
production the young women are even able to take home up to Rs 3,500.
Out of its earnings, MEADOW has invested in:

 Part of the costs of constructing the workshed (Rs 2.5 lakhs)

 Purchase of a second-hand jeep, a new motorcycle, and a moped

 Purchase of 12 handpress machines

 An air-conditioner and an air-compressor (for the table-clock section)

 A computer, UPS, and printer

 Rent deposit (Rs 1.6 lakhs) for a second workshed

 Telephone deposit

 All furniture and fittings like fans, emergency lights, table lights, etc.

 Rs 40,000 spent on ensuring regular supply of 40 HP power

 Water and electricity connections.

Recurring costs include:
 Payment of salaries and allowances

 Telephone rental and call charges MEADOW annually transacts

 Electricity bills
business worth Rs 40 lakhs. It has
 Rent for building
accumulated assets in excess of Rs
 Vehicle maintenance and running costs

50 lakhs, held in the form of land,

 Office expenses

 Travel bills building, machineries and

 Hospitality and guest expenses equipment, bank deposits, etc.

 Training of young women

 Donations and social activities

(MEADOW often engages in social activities).
Staff

Initially one Chief Executive Officer-Paid by MYRADA

apart from young women
At Present-11 Staff members apart from young women
workers
 Chief Executive Officer (1)
 Accountant -Cum-System Operator (1)
 Technical Supervisors (3)
 House-keeping staff (2)
 Driver (1)
 Security (3)
Management
Board of Directors of MEADOW-Three young women
Selection-By other young women
Tenure-one year
Replacement Selection-In Annual General Body meeting
Ex-officio member of the Board- Project Co-ordinator of
MYRADA-PLAN Dharmapuri Project

 
Board Meetings are held once a month and attended by one
representative each from all the 16 task groups that
presently make up MEADOW.
Effects
Attracted number of interested visitors ranging from
grassroots level NGO workers to Swiss Ambassador to
India and the President of the World Bank's
International Finance Division.
As an impact of this both MYRADA and TITAN are
regularly approached with requests to see 'the
experiment'.
TITAN received an international award for social
development that it attributes at least in part to its
involvement with MEADOW.
Impact on women
Very much motivated & enormously encouraged by being involved in
every step of the way in building and running their company.
Built the capabilities to directly negotiate with TITAN in the annual
revision of
 piece-rates
 handling all purchases
 controlling the movement of their vehicles
 drawing up work schedules
 calculating payments
 follow up on receivables
Doing the base work for meeting all statutory requirements etc.
Improvement in their income
In most of the cases the women workers had become the most
important wage earner in the family
Improvement in their social status within their
families and communities
They were not pressurised for early marriage
Improvement in the social space with the freedom to
lead a better social life
Paying off the debts, contributing to purchase assets,
educating their siblings, picking up medical bills, and
making savings in cash and gold.
Increased involvement in the family as now they are
consulted on all family decisions
Critical Analysis
 MYRADA's first experience of promoting a private limited company as
an institutional base for the poor.
 Young People

Shares and shareholders:

 A private limited company has to have less than 50 shareholders,
 So how can all 212 young women own MEADOW? And how to
safeguard shares from being sold away to outsiders?
 After a lot of thought, it was decided that shares would be held by the
task groups rather than individuals.
 Thus, the shareholders would be 16 groups rather than 212 young
women. So each group selected a representative and shares were
allotted in her name.
 Critical Analysis
Youth and inexperience:
 The girls are young and without formal work experience.
 There was an anticipation that they would not be taken very seriously
in discussions of any consequence.
 People dealing with MEADOW still prefer to deal with the Chief
Executive Officer.
 Communication in English is also a major problem.
Critical Analysis
Ownership issues:
 Do all young women feel that they actually own the company?
 Coming from a background where they have not been exposed to the
concept of shares, shareholding, and company

Age and dexterity:

 Sharp eyesight and nimble fingers deteriorate with age.
 Where earnings are linked to levels of production, workers whose
production levels decrease due to the natural consequences of aging
affect the company's profit margins.
Critical Analysis
Exclusive dependence on TITAN:
 Most major weakness. The survival of MEADOW hinges on TITAN

Macro-economic influences:
 Cheap watch bracelets from China are soon expected to flood the
Indian markets, posing a threat to the watch industry in India, which
includes TITAN.
 The consequence is threatening to MEADOW as well.
Learning
Collaboration between NGOs, rural communities and
the corporate sector
To build a successful institution owned and managed by
the poor themselves requires the heaviest investment of
time and energy in the area of capacity building.
What needs to be built up along with incomes are an
adequate asset base, knowledge and skills that can stand
the poor in good stead even under conditions of risk.
Breadth versus Depth