BS : Silk Industry Caught In Cocoon As Poor Quality Stunts Growth : Apr 30, 2007

Rural retail seems to be keeping a lot of women in villages across the
country on their toes.

But their profits are meagre or, at best, satisfactory, depending on their
deal with private companies keen to reach rural customers.

Nagamma, 38, of Sadaholalu village in Mandya district of Karnataka, for
example, travels 2 km around her village every day selling little packets of
Wheel Active, Fair & Lovely cream, and Lifebuoy soap. She has a clientele of
150 families.

Her co-villager Lakshmi does this work in two villages every day.

Their earnings every month: Rs 500 to Rs 1,000, or 10 per cent of what they
sell. Most of this goes into repaying the high-cost loans that they raise to
pay deposits that enable them to pick up products to sell.

Nagamma and Lakshmi are saleswomen hired by Hindustan Lever Ltd (HLL) and
Emami to sell their products at places where there are no shops, no
transport, and probably little purchasing power.

The companies have tied up with village women through NGOs and state
agencies in at least 15 states, including Bengal, Assam, Karnataka,
Maharashtra, MP and even backward regions like Orissa.

Despite the demands on their time and energy and the relatively low returns,
women at most places are trying to make the most of the opportunity by
borrowing ever-higher amounts to retail products.

Nagamma, for instance, took three loans from a cooperative society to buy
face cream and soap - Rs 5,000 the first time, Rs 8,000, the second and Rs
10,000 the third time.

In Mysore, however, the debts are managed by self-help groups as a whole and
are therefore not burdensome, said WiIliam D'Souza, programme officer of
Myrada, an NGO that helps these companies sell products in villages. The
self-help group has to deposit Rs 5,000 before it is given products.

Over and above, companies often pay the women in kind. In Mandya, for
instance, women are given mobile handsets and pre-paid cards worth Rs 420.
In turn, the women sell the calls to villagers and make some extra money.

HLL says it has covered about 2,600 villages in Karnataka and the project
will become really profitable once it manages to cover the remaining 700-800
villages.

In Bengal, HLL's strategy has been slightly different. For every sale worth
Rs 4,000, the women get Rs 1,000. And HLL says it doesn't demand any
deposits.


Publication : BS; Section : front; Date : 30/4/07
URL :
http://www.business-standard.com/bsonline/storypage.php?leftnm=3&autono=2829
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