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Grassroots-to-Market 
Nurturers

26%

Nonprofits or social enterprises working with artisan clusters in rural India

1

Work behind the scenes, understand ground realities, work with marginalised communities

2

Strong focus on livelihoods, fair pay, and dignity

3

Help provide market linkages, ecosystem support

4

Push for sustainable models that empower artisans

5

In some cases, help artisans become entrepreneurs

6

Build their own brands to further support artisans

Nonprofit social enterprises now pivoting to become hybrids
Strong people lens with a desire to impact artisans at scale
High potential for high turnovers

  • Traditionally B2B focused, D2C lens becoming increasingly important

  • Secondary focus on developing sustainable, climate-friendly / green products

  • Strong backend (producer) focus but newer HCMs also shore up the front-end (marketing)

  • More recently, could even be for-profit companies

  • 21% support > 500 artisans

  • Sees a strong female-founder skew

  • Model transforming to become more tech-integrated, modernised

  • 1 in 3 enterprises deliver turnovers between ₹50 lakhs ($62,500) - ₹50 crores ($375,000)

  • 10% show turnover in the range of ₹3 crores ($375,000) - ₹50 crores ($6.25 million), showing possibility of scale

  • More conversant than other segments with grants and the impact financing landscape

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Business Hardships

Running Aggressive Businesses:
 

  1. Struggle to clearly define their value proposition and are therefore not able to command a premium, challenging the very viability of the model
     

  2. Market linkages are hard to come by
     

  3. May work with market players who require higher compliance standards
     

  4. Need support to improve first-mile capabilities
     

  5. Training and skilling to build sustainable clusters while ensuring dignified, crisis-resilient livelihoods takes significant resources and expertise; scaling a challenge

Financial Roadblocks 

Capital Needs:
 

  1. Access to working capital, especially through debt
     

  2. Government incentives are unfamiliar, complex, and require too much documentation, often making them inaccessible

Workforce Concerns

  1. Shortage of workers: Pool of artisans steadily reducing as young people seek employment in urban, service industries
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  2. Ensuring sustainable incomes: Artisans need steady work with steady pay and a full-time income; challenging to ensure when scale and volume of work do not exist
     

  3. The social challenge: While the core goal is to ensure sustainable livelihoods, it is not easy to replicate models across the country due to differences in geography, craft, tribes and culture. Solving these problems takes time, patience, money and a deep understanding of the context in each new community, unlike in tech-solutions.

“Government institutions need to have a deeper understanding of craft and systemic issues that plague the sector. We need a system where access to advances, quality raw materials, infrastructure, linkages is fair and transparent and not dependent on whom you know (people change / move). We need to be able to get fair prices instead of being pressured to reduce prices further when we are already struggling with wafer-thin margins.”
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“

— NIVEDITA BANERJEE, CEO, KUMBAYA

This HCM exemplifies the common stereotype that thinks of handmade, craft-led enterprises as “people-focused nonprofits”. But business savvy is key to sustainability and their capital needs are both that of a for-profit business and a nonprofit. Addressing this duality is key to helping them thrive.

Working capital is a big challenge because our production cycle is quite long. Since it's handmade, it takes 4-6 months from the time of getting an order to delivering it. Craft-led enterprises have to pay for raw materials, artisan wages, and cover their OpEx, salaries, rent, and the money only comes in after 6-7 months.

“

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— RAHUL NOBLE SINGH, CFO, RANGSUTRA

Working Capital
Market Connections
Acquiring Assets
Livelihoods
Capacity
Building
Skilling & Training
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CSR

  • Offers mostly time-bound, programmatic grants while the transformation in this sector takes time

  • Impact metrics may take a long time to register and CSR grants are not structured to account for that

Banks

  • Loan interest rates of 12% - 24% p.a. expensive and unaffordable

  • Need collateral which HCMs lack and are disinclined to use personal assets as collateral

  • Loans typically have to be paid back in 6 months; action, execution and impact take longer

Impact Investors

  • Do not offer patient, long-term impact equity

  • Lack patience needed for the sector

  • Demand quick turnarounds and market rate or near market rate returns in addition to impact

Institutional Investors

  • Remain inaccessible as smaller ticket sizes and high transaction costs for deploying capital act as disincentives.

  • Tend to be uninterested as HCMs often lack business-speak and Grassroots-to-Market Nurturers are more likely to seem like the “handmade, nonprofit stereotype” than viable, profit-making enterprises

  • NBFCs with their expectation of 15% - 24% interest rates become an unviable option

High-Risk, Subsidised Capital

Allows HCMs to deliver demonstrable impact / social good

Mix of Low + Market-Rate Debt

Low interest debt supports capacity building at the back-end

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High interest debt with easy access can support working capital requirements

Non-Financial Support

Allows HCMs to:
 

  • Build more market linkages
     

  • Build a solid unit economic model
     

  • Build a strong theory of change; figure out model → craft → market linkage → customer need. 

Patient, Impact-First Growth Capital

Allows HCMs to:
 

  • ​Build operations (ERP, managing stock, production, inventory)
     

  • Invest in impact measurement + communication
     

  • Pivot from a wholesale physical marketplace to a hub-and-spoke manufacturing model

Non-Programmatic Grants

Allows HCMs to:
 

  • Drive first mile change by skilling and improving wages
     

  • Formalise artisans’ participation (via Artisan Cards, bank accounts, other documents) and deliver training programs

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