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Soon after partnering with hair and beauty salon Naturals, to offer loans to women entrepreneurs to become franchisee of the salon, Bharatiya Mahila Bank has tied up with CavinKare's salon business arm, Trends In Vogue Pvt Ltd (TIV) to offer the same loan facility to women entrepreneurs.
Usha Ananthasubramanian, CMD of Bharatiya Mahila Bank (BMB), has signed a memorandum of understanding with C K Ranganathan, CMD of CavinKare Pvt Ltd. As per the MoU, BMB would provide a loan amount between 65-75% of the total project cost and is available for franchises to avail across India. The rate of interest will be from 11.5% to 12.5%, with one% concession to the women entrepreneur.
This would help TIV in expanding its franchisee model, under which the company selects women entrepreneurs to start the salon under its brand. The company has the responsibility to identify the right place for the salon and would train the staff to offer standardised service to the customers.
"We see tremendous potential in the Indian beauty industry for women to establish themselves as entrepreneurs. Loans below Rs 1 crore does not require collateral," said Ananthasubramanian.
She added that lending to franchisees of a brand like TIV would assure the repayment of loan, since there is a stength coming from the brand.
CK Ranganathan, CMD, CavinKare, who said that the company is happy to associate with BMB in providing collateral free loans to prospective franchises across the country, especially women, said that the company would take the responsibility of finding right place for salon for its franchisees, negotiate with the land owner for rent, would bring in cost efficient service providers and suppliers, which would bring down the cost for the franchisee.
TIV currently has 200 salons, of which 140 are franchisee run while the rest is company own facility. Plans are to increase the presence to a total of 500 salons by end of current fiscal year. Of the new 300 salons expected to start operation this fiscal, around 260 would be franchisee run salons.
TIV is also looking at similar tie up with other banks to make the facility available, but tie up with BMB would ensure women participation in business, he added.
The expansion plans also include increase in number of its premium salon, Limelight. The number of Limelight salons would go up from current nine to 33 by end of the financial year, he added. While the investment for Green Trends salon would be around Rs 30-40 lakh depending upon the location, Limelight would require double the investment.
It may be noted that the Bank, has tied up with Naturals, a unisex beauty salon, to promote women entrepreneurs in the organised beauty salon industry. The women who are planning to star Naturals spa and salon or lounge can avail loans from BMB, it announced.
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Bharatiya Maghila Bank, incorporated on August, 2013, is in the process of tieing up with various associations to promote entrepreneurship among women. It has tied up with Institute of Chartered Accountants of India (ICAI) to provide loans to students and also financial support for the women Chartered Accountants to start their own firms.
The Bank is also expecting its model of mobile van for bank services in another two to three months. The mobile van, with an ATM and an officer for cash transactions is under pilot study in Delhi and Bombay.
"Almost 40% fo the CAs are women, but they start as partners in one of the firms and end up their career as partner itself. We want more of them to come up with own firms," said Usha Ananthasubramanian, CMD of Bharatiya Mahila Bank.
The Bank is also planning to tie up with Institute of Cost & Works Accountants of India (ICWAI) and Institute of Company Secretaries of India (ICSI) to offer similar support, she said. It is also providing various products and insurance in tie up with New India Assurance Co Ltd, to working women and their family. It has made advance of around Rs 87 crore for the period ended March 31, 2014 and has to get board approval for the plans for the current fiscal year, she added.
BMB was incorporated with an initial capital of Rs 1,000 crore fully funded by the Government and currently has 23 branches across the country.
