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HLL doing a Grameen Bank -- Leverages micro-credit to tap rural market

Preeti Mehra

NEW DELHI, May 20

FAST-MOVING consumer goods (FMCG) major, Hindustan Lever Ltd, is picking up where the Grameen Bank of Bangladesh left off. Leveraging the micro-credit model to expand its rural market, it is piloting `Project Shakti' -- its five-month-old marketing initi ative involving women belonging to micro-credit self-help groups (SHGs) in the Nalgonda district of Andhra Pradesh.

Willing to experiment, the company followed the growth initiative suggested by HLL's Project Millennium last year that drew upon the Grameen Bank concept.

The project, with an obvious `win-win' partnership potential, involves women from SHGs turning into direct-to-home distributors for HLL in their area, thus helping the company expand its rural market from its existing 40 per cent penetration in villages with population of over 2,000.

For the women, it means income generation without the headache of starting their own venture and becoming vegetable vendors, fish vendors, pan shop owners, etc., which has generally been the micro-credit model to date.

The products being sold through this unique direct marketing initiative are HLL's leading brands including Clinic Plus shampoo, Lifebouy, Wheel, A1 tea and Nihar coconut oil.

In fact, due to customer demand for other HLL products, Three Roses tea, Fair And Lovely cream and Pond's talcum powder have been added to the inventory. At the grassroots level, the project is being coordinated and implemented by Marketing and Research Team (MART) headed by Mr Pradeep Kashyap.

Andhra Pradesh was obviously chosen for the pilot project as 20 per cent of its rural population is covered by the micro-credit model. The micro-credit concept, that impacts 45 lakh women belonging to 3.33 SHGs in the State, creates wealth for the member s of the groups and helps them better their lives and alleviate poverty. The micro-finance collected in the State, through savings as well as institutional loans, is around a whopping Rs 800 crore.

For the project, 50 SHGs closest to the highway in Nalgonda district were identified. These are covered by three Mutually-Aided Credit Thrift Societies (MACTS), which act as semi-distributors in the project. MACTS, which generally consist of 14 to 15 SHG s, are federated into a co-operative and work in close tandem with the SHGs.

In fact, the project has had several interesting spinoffs. One of the MACTs distributing HLL products has started its own supermarket, while another is shortly purchasing a vehicle for its distribution network.

``The investment opportunity is relatively risk-free and high on return. HLL is committed to providing the necessary training inputs to these groups on the basics of enterprise management which the groups can then use to enlarge their initiatives,'' says an HLL spokesperson. But it plans to upscale the pilot only after its analysis and evaluation is completed.

``The challenge has been to move from micro-finance to micro-enterprise,'' says Mr Kashyap whose organisation also carried out a feasibility study for the Andhra Pradesh Government on the micro-enterprises that can be taken up by SHGs. It is, in addition , training district functionaries and the women themselves on how to run such micro-enterprises.

Some of the ventures being implemented are superbazars run by the women, sanitary napkin units and the traditional dairy and handloom initiatives. But for the corporate world, it's Project Shakti to look out for.