Inclusive Capitalism –

Community Owned
Companies
 Fabindia Overseas Private Limited

• Established in1960 as an export house

• Linking traditional, craft-based rural producers to

modern urban markets and consumers

• India’s largest private retail platform for products that

derive from traditional techniques, skills and processes

Twin Mandate

• A viable, profitable retail platform for products

created using craft skills and processes

• The creation of skilled, craft-based sustainable

jobs in the rural sector
Snapshot – Fabindia Market & Product Profile
Market Distribution:
• 97 stores across 42 cities
• 6 stores abroad and a growing presence in the Middle East
• B2C online & Exports to 34 countries

Product Range:
• Garments
Indian and western styles for men, women, children and infants
• Home
Home linen - bed, bath and table – gift items, floor covering, lighting
• Furniture
Contemporary wood furniture for homes and offices
• Personal Care
Soaps, face, skin and hair care products using authentic natural
ingredients
• Organic Foods
Organic and natural agri-products grown without chemicals or pesticides,
and processed foods
• Jewellery
Showcasing craft: repository of skill and technique
 VISION

 Create a pathway for the growth of Indian textile

and non textile craft products in the international
and domestic market

 Focus on indigenous and inherent skills

 Reach out to 100,000 artisans in rural India to

provide an opportunity for inclusive growth
 HOW?

By creating:

 a relevant intermediary organization

 with defined responsibilities which will support

the vision.
 HENCE

 Establishing of a joint investment fund – Fabindia’s

subsidiary Artisans Micro Finance Pvt Ltd
(AMFPL), as an NBFC

 Facilitating the setting up of the Community

owned Companies (CoCs) as first Private, and
then Public Limited Companies – 17 COCs are
fully operational
 Corporatising the Supply Chain:

• Goal to create 100,000 sustainable rural jobs

across India

• Enabling access to working capital – the

main hurdle to capacity building

• Closer to sourcing – shortening the supply

chain, better quality and pricing

• Direct interface with artisans

 AMFPL Strengths

 Highly qualified, experienced and dedicated

Board

 Captive access to the market via Fabindia

 Access to working capital and term loan funding

via tie up with Banks
 AMFPL Structure

Fabindia Overseas Working Directors

(99% equity) (1% equity)

Artisans Micro Finance Private Limited- NBFC

Working Directors Fabindia Rep. MD Independent Directors

Maximum AMFPL Equity in COC 49% . Minimum equity 26%

COC COC COC COC COC COC

 Role of AMFPL

• Survey and Feasibility Study of Craft Clusters

• Setting up a COC
• Selecting and Training Management Team
• Establishing Standard Operating Procedures
• Assisting to establish quality standards

• Financial and Business Planning

• Provide access to funding from banks
• Vetting and processing loan applications
• Monitoring loan disbursal
• Ensuring repayment of principal and
interest
 Role of AMFPL
• Raising equity
• Commitment to a minimum 26% equity in all COCs.
• Raising balance equity for the COCs
• Artisan shareholding

• External Investor

• Providing access to market through Fabindia

• Co-ordinate technology and design inputs, and product
development
• Constant monitoring of operations and profitability of CoCs
• Wealth creation for share-holders
 Community owned Companies (CoC)
– Empowering the Supply Chain

• Strengthening supply capabilities where the goods are

produced
• Implementing common systems for stocking, production
and delivery
• Ensuring that the profits of the CoC are ploughed back
into the business
• Allowing artisans to avail facilities set up with common
investment for processes that improve quality and add
value
• Facilitating the training of artisans
• Enabling the purchase of materials in bulk so as to get
the best price
Community owned Companies (CoC)
- Shareholding Pattern
 COCs – Incorporated under
The Companies Act, 1956

COC Board Structure:

 Artisan Director
 Key staff members of the COC who are working
Directors
 Independent directors
 AMFPL representative
 COC Management Team

 Levels of COC dependant on turnover value

 Key Positions in COC vary from 1 – 3

 Secondary Positions vary from 2 – 6

 Flexibility
in appointment of management team
basis relative strengths & weaknesses
 COC Management Team responsibilities

 Operational profitability of the company

 Meeting sales and profit targets
 Product Development
 Maintaining adequate stocks to meet orders
 Order Fulfillment within timelines
 Managing supplier relationships
 Generate artisan shareholding
 Conducting Board Meetings & AGMs
 COC - creation benefits

 Pooling of artisans resources

 Resulting in economies of scale
 Access to technology and facilities
 Revival of dying crafts
 Improvement in quality
 Access to design inputs
 Possibility of Indian craft being competitive in the
global market
 COCs - as Private / Public Ltd. Companies

 Creation of first time artisan ownership in a

company with control over their business

 Wealth creation in the form of increased value

investments in COCs

 Increased employment opportunities in rural

India
 COCs – as Private / Public Ltd. Companies

 Artisans participate in decision making of the

company

 Receive dividends

 Share trading window permits easy entry and

withdrawal
The Fabindia Supply
Chain – As it
Evolved

• Move from centralised model

to regional supplier companies

• Long-standing, personalised
relationships with suppliers
that go back a generation

• Consistent growth of artisan

suppliers linked exclusively to
Fabindia

• Complete geographic
coverage of crafts and supply
chain through the 17 COCs
The Supply Chain Structure
Suppliers

Community
owned
Companies

Fabindia
Market Region
Warehouses

Fabindia
Stores
 Community Owned Companies – a Snapshot
Public /
Operational Private
S.NO. COC Company Name From Limited Status
1 COC 1 - Faridabad Desert Artisans Handicrafts Private Limited Apr-07 Private
2 COC 2 - Jaipur Desert Artisans Handicrafts Jaipur Limited Apr-07 Public
Desert Artisans Handicrafts Jodhpur Private
3 COC 3 - Jodhpur Limited Apr-07 Public
4 COC 4 - Bikaner Rangsutra Crafts India Private Limited Apr-07 Public
Bengal Artisans Craft Company Private
5 COC 5 - West Bengal Limited Oct-07 Public
Desert Artisans Handicrafts Bhuj Private
6 COC 6 - Bhuj Limited Apr-07 Public
7 COC 7 - Chanderi DAH Chanderi Limited Apr-07 Public
8 COC 8 - Ahmedabad Saptarangi Crafts Private Limited Nov-07 Public
9 COC 9 - Amroha Naugaon Artisans Handicrafts Limited Oct-07 Public
10 COC 10 - Bijnor Bijnor Artisans Crafts Limited Sep-07 Public
11 COC 11 - Delhi (A) Dilli Karigari Limited Dec-07 Public
12 COC 12 - Bombay Mumbai Vastra Kala Private Limited Mar-08 Public
13 COC 13 - Bangalore Deccan Crafts & Weavers Private Limited Jul-08 Private
COC 14 - Andhra
14 Pradesh Krishna Weavers Private Limited Jul-08 Private
15 COC 15 - Chennai Nilgiri Artisans Private Limited May-08 Private
16 COC 16 - Delhi (B) Delhi Artisans Private Limited Dec-07 Public
17 COC 17 - Ghaziabad UP Artisans Sutradhar Private Limited Mar-08 Public