Chennai: Asecond-generation artisan making handicrafts, M.S. Jeyakumar has undertaken a major change in the way he works, switching from hand tools to electricity-powered tools. His 45-year-old company has recently bought power tools (tools with motors and powered by electricity as compared to traditional mechanically-powered tools) worth Rs1.5 lakh which helps him save half his time.
Jeyakumar is among the 150 artisans from Mysore who have purchased power tools through a joint effort between a Germany-based multinational company and an Indian public sector bank.
Inspired by former president Abdul Kalam’s vision of ‘Providing Urban Facilities in Rural Areas (PURA)’, the Indian arm of Bosch Group decided to focus its efforts in rural areas, by positioning its power tools as ‘income generating tools’. Similarly, Chennai-based Indian Bank, which calls itself as the “common man’s bank,” wanted to focus its effort on rural operations and was looking at business opportunities to provide credit to non-agricultural fields.
Bosch and Indian Bank have signed an agreement to jointly market and sell their products —tools and loans.
“We organize camps in various places and demonstrate the power tools before artisans. At the same venue, we also disburse loans,” said M.S. Sundara Rajan, chairman and managing director of Indian Bank.
Currently, the equipment is being sold to skilled workers in carpentry, handicrafts, plumbing, electrical, automobile works and even building-demolition.
The use of modern tools by artisans working in rural areas is quite low. Even Jeyakumar was using only very few mechanical tools though he is well travelled—making trips to collect several state and national state awards for his craftsmanship. “I have seen modern machine tools in many places I have been to, but never bought one,” Jeyakumar said. “The camp organised by Indian Bank helped me to buy these tools”. People like Jeyakumar, whose firm is financial strong because it has been supplying to state-owned emporiums, form a minority in the group that availed of the loan.
According to K.C. Panja, chief manager at the Mysore branch of Indian Bank, around 85% of artisans who have taken the loan so far are first time users of power tools, and were mobilized by bank staff through door-to-door campaigning. So far, his branch along with two others in Mysore have disbursed loans worth Rs28.69 lakh to 149 artisans. A further 50 applications have been received.
To cover the maximum number of villages and to demonstrate to artisans, Bosch India has designed a mobile vehicle at an investment of Rs30 lakh. The vehicle was launched as company officials found that it was costly for a village artisan to travel outside the village and lose out on a day’s worth of business.
“Even a loss of wage for one day cannot be afforded by village craftsman. The vehicle helps us go to the villages itself,” said P. Mohandasan, country manager of Motor Industries Co. Ltd., part of Bosch.
“Most village artisans are still using primitive tools.Providing bank loans to the underprivileged has enabled many to buy these modern tools.”
Most artisans are dependent on contractors for work. However, with the arrival of machine tools, bank officials are confident that artisans will be able to save time and material, which will enable them to invest and expand, and wriggle out of the clutches of contractors.
The loans are provided at an interest rate of around 11%— below the prime-lending rate (or the base rate charged by banks)—with a repayment schedule of three to four years. Borrowers have the option of begining their repayment schedule six months after availing a loan. Prices of machine tools range from Rs2,000 to more than Rs1 lakh.
A complete set of power tools required for carpentry costs Rs50,000. Both Bosch and Indian Bank officials are confident that the modern machine tools would provide a faster return on investments, as it would increase productivity and also cut material waste in the case of carpentry.
As for Jeyakumar, he is waiting for larger orders fromhis clients.