FabIndia, ICICI tie up for artisan firms
Fabindia Overseas Pvt Ltd has joined hands with ICICI Bank to set up community-owned companies, independent commercial units for artisans that aim to remove the middleman completely.
Artisans Micro Finance Private Ltd, a fully funded venture of Fabindia Overseas, besides providing support for incorporation of community-owned companies, will help raise funds for these companies in the form of 49 per cent equity support.
The remaining 51 per cent stake will be held by artisans (26 per cent) employees (10 per cent) and outside investors (15 per cent). ICICI Bank will release Rs 100 crore over five years. Of this amount 8 per cent is being guaranteed by Fabindia.
Dilpreet Sokhi Singh, managing director of Artisans Micro Finance, said, "We have initiated the project with the twin mandate of strengthening the supply chain while focusing on sustainable development in rural handicrafts across the country. We are looking to work with groups that have a turnover of minimum Rs 30 lakh." Although Artisans Micro Finance is funded entirely by Fabindia, there is a possibility of other investors coming on board in the future.
ICICI Bank will make these funds available to community-owned companies being promoted by the company in Fabindia’s supply regions across 21 states. The fund will provide inputs for financial and business planning, training of staff, marketing and mentoring the management of these companies.