Cake Notice, a small food store in South California raised capital through a crowd funding site Small Knot , to start its retail operations and they received more than what they expected. The request was for $2500 and they got $2620! This is not a single case, Ouya a game console got much more than what they expected, they got $8.6 million. In 2008, for the US presidential election campaign the fund raised by Mr Obama was mainly through these crowd funding platforms.
The crowd funding may be a relatively new phenomenon, but it is growing like wildfire later it got immense reception in the US and UK. In the earlier model, people used to pledge their money for startups that too, with no expectation in return. The contribution model has been reverted to Donation model, Lending model and Investment model these days and will be surely subjected to further changes in the future.
In the Lending model, there are terms and conditions where the creators have to follow strictly as in typical lending. The expectation of repayment is present in this model. The Lending model can take the form of a traditional lending agreement and a simple loan.
The Donation model is purely donating money by individuals and they hold no expectation of returns. The contributors are thanked by rewards and small incentives.
In Investment model it is just like a standard equity investment, where the investor gets equity or share of the project. This could be a security investment model or revenue sharing model.
Raising capital was once purely traditional, but with the launch of more and more crowd funding sites it became easier for millions who wanted to shape up their business and there are successful startups who even used social media platforms to raise their capital. In India a film maker raised 51 lakh just through FB.
Thursday 27 February 2014
Tuesday 18 February 2014
The Sino- Indian Gold War
It is not a surprise that China has outgrown India in its gold consumption in 2013, as they consumed 1,066 tonnes of gold, while Indian consumption was only 975 tones. Blame it on the curbs from Indian government just to keep the Current Account Deficit on track which led to the decrease in gold consumption by 10 % which was a 13% up from the consumption in 2012.
The CAD (Current Account Deficit) was on record high at $88.2 billion which is 4.8% of the GDP in the last fiscal term. Various curbs like a hike in import duty on gold to 10% and making 20% of the imported gold available to exporters, gold business in India is facing seasonal obstacles in making profit.
The central bank is strictly following the 20/80 principle on import which can be described as, when a nominated bank import 100 kg pure gold, 20% of that consignment should be given to the exporters and 80% will be in the domestic market. In order to bring down the consumption, nominated banks and import agents were restricted to distribute gold only to entities engaged in jewelry business and to those bullion sellers who are supplying gold to jewelers.
These steps has obviously resulted in decreasing the CAD, and the finance minister is hopeful about the exports that it will reach $326 billion in 2013-2014, which was $304.5 billion in 2012-2013. The restrictions were imposed in July 2013 since then the CAD has narrowed to$29.6 billion ie, 3.1% of GDP.
The curbs are enticing gold smugglers all around India and the records say that smuggling is about 20 to 30 tonnes a month, precisely speaking in the month of May alone around 162 tonnes was smuggled. Smugglers are frequently changing their techniques including people swallowing gold capsules and this month one person was caught swallowing 54 lakh worth gold in the capsule form! Those who were left unnoticed are more.
The high smuggling rate may not have convinced the RBI and finance ministry to ease the restrictions; they are actively looking at improved CAD. The ease in restriction is a necessity and this may take place by elections on May. The easing of 20/80 strategy can bring more gold in the domestic market
China, currently the top buyer of gold is working on the strategies which in turn create more suppliers. Recently Chinese government approved a gold trade fund and even import license for foreign banks. While India makes buying gold difficult China makes it easy. While Indian gold consumption raised by 13% Chinese consumption was on a high of 32% in 2013! China is even moving to keep gold price in their local currency(Renminbi) in international market, where as India does not even have a clear gold policy. Even Indian Finance Minister in his interim budget has strongly advocated curbs saying they are mandatory of a healthy economy.
The CAD (Current Account Deficit) was on record high at $88.2 billion which is 4.8% of the GDP in the last fiscal term. Various curbs like a hike in import duty on gold to 10% and making 20% of the imported gold available to exporters, gold business in India is facing seasonal obstacles in making profit.
The central bank is strictly following the 20/80 principle on import which can be described as, when a nominated bank import 100 kg pure gold, 20% of that consignment should be given to the exporters and 80% will be in the domestic market. In order to bring down the consumption, nominated banks and import agents were restricted to distribute gold only to entities engaged in jewelry business and to those bullion sellers who are supplying gold to jewelers.
These steps has obviously resulted in decreasing the CAD, and the finance minister is hopeful about the exports that it will reach $326 billion in 2013-2014, which was $304.5 billion in 2012-2013. The restrictions were imposed in July 2013 since then the CAD has narrowed to$29.6 billion ie, 3.1% of GDP.
The curbs are enticing gold smugglers all around India and the records say that smuggling is about 20 to 30 tonnes a month, precisely speaking in the month of May alone around 162 tonnes was smuggled. Smugglers are frequently changing their techniques including people swallowing gold capsules and this month one person was caught swallowing 54 lakh worth gold in the capsule form! Those who were left unnoticed are more.
The high smuggling rate may not have convinced the RBI and finance ministry to ease the restrictions; they are actively looking at improved CAD. The ease in restriction is a necessity and this may take place by elections on May. The easing of 20/80 strategy can bring more gold in the domestic market
China, currently the top buyer of gold is working on the strategies which in turn create more suppliers. Recently Chinese government approved a gold trade fund and even import license for foreign banks. While India makes buying gold difficult China makes it easy. While Indian gold consumption raised by 13% Chinese consumption was on a high of 32% in 2013! China is even moving to keep gold price in their local currency(Renminbi) in international market, where as India does not even have a clear gold policy. Even Indian Finance Minister in his interim budget has strongly advocated curbs saying they are mandatory of a healthy economy.
Wednesday 12 February 2014
M-pesa For the Rural Poor
M-pesa For the Rural Poor
M-Pesa may not be a interesting subject for the rich and developed countries but it is highly popular as a micro financing service from the mobile service providers, Vodacom and Safaricom in African countries especially in Kenya, Tanzania, Uganda and Ghana. The number of M-pesa customers in Kenya itself is more than 18 million this shows the popularity of M-pesa.
Heavy processing fees, service charges and interest rates levied by the commercial banks makes their service unavailable for the poor African population so M-pesa was the necessity of those millions. M-pesa was developed by the Kenyans with the support of Department of International Development, a UK agency in 2003. This has truly benefited rural population of Kenya, Tanzania, Uganda and Ghana who doesn’t even have bank accounts and this scales up to around 79% of entire African population.
Establishment of M-pesa was easy due to the fact that there are more than 500 million mobile phone users in African countries and in Uganda alone there are more than 10 million mobile phone users.
How M-pesa Works?
It is so easy that anyone can register to the M-pesa network through an M pesa agent and they are available in every nook and corner of these African countries. Soon after the registration the service provider would send an updated menu to the phone. Then the customer has to give money to the M-pesa agent and he will load it. It is just like storing money in your mobile and sending it as a text to the recipient’s phone and he can take the money from his local M-pesa hub. Most of the banking and telecom transactions could be done using this service. Just few clicks on the mobile and the money is send to any part of the country that too within no time. The popularity is such that 11% of Kenya’s GDP is transferred through M-pesa alone. You can even withdraw money from ATM without an ATM card. M-pesa is for
• Cashless transactions
• Money Transfer
• Bill Payments
• Airtime Purchase
• Bank Transactions
M-pesa in Various Countries
MobileMoney in Uganda
MobileMoney was launched by MTN Uganda in 2009 has grown to have 600000 customers within that year. Their marketing techniques helped them to acquire 1.9 million customers till 2013. MTN Uganda covers 80% of the country and this made MobileMoney available everywhere. Additionally, Grameen Foundation which is a micro financing agency in Uganda even lends smart phones on lease and this obviously add into the number of mobile phone users.
M-pesa in South Africa
Owing to the strict banking regulations in South Africa , M-pesa is not functioning well even it launched in 2010 with the partnership of NetBank and Vodacom. Despite the people without a bank account exceed 13 million, M-pesa has not got popularity yet so the partners are redesigning the product and planning new marketing strategies.
M-pesa Afghanistan
Amidst the Taliban threats M-pesa has gained such popularity that the police department started distributing salaries through this service. Launched in 2008 by Vodafone and partner company Roshan, the primary mobile provider, M-pesa even put an end the ghost police servants who were looting the salary of government officers. Finding this service every efficient, Afgan government is making use of this service for other financial transactions
M-paisa India
Indian version of M-pesa, M-Paisa was launched in 2011 by Vodafone and HDFC, has not started as a full-fledged service yet. In 2013 Vodafone partnered with ICICI also.
Conclusion
M-pesa seem to have great scope in poor countries where rural population is high. In Africa where electricity consumption is just 4% of the global electricity consumption, advance banking techniques like mobile banking, or online banking including having own PC is a distant dream for laymen.
M-Pesa may not be a interesting subject for the rich and developed countries but it is highly popular as a micro financing service from the mobile service providers, Vodacom and Safaricom in African countries especially in Kenya, Tanzania, Uganda and Ghana. The number of M-pesa customers in Kenya itself is more than 18 million this shows the popularity of M-pesa.
Heavy processing fees, service charges and interest rates levied by the commercial banks makes their service unavailable for the poor African population so M-pesa was the necessity of those millions. M-pesa was developed by the Kenyans with the support of Department of International Development, a UK agency in 2003. This has truly benefited rural population of Kenya, Tanzania, Uganda and Ghana who doesn’t even have bank accounts and this scales up to around 79% of entire African population.
Establishment of M-pesa was easy due to the fact that there are more than 500 million mobile phone users in African countries and in Uganda alone there are more than 10 million mobile phone users.
How M-pesa Works?
It is so easy that anyone can register to the M-pesa network through an M pesa agent and they are available in every nook and corner of these African countries. Soon after the registration the service provider would send an updated menu to the phone. Then the customer has to give money to the M-pesa agent and he will load it. It is just like storing money in your mobile and sending it as a text to the recipient’s phone and he can take the money from his local M-pesa hub. Most of the banking and telecom transactions could be done using this service. Just few clicks on the mobile and the money is send to any part of the country that too within no time. The popularity is such that 11% of Kenya’s GDP is transferred through M-pesa alone. You can even withdraw money from ATM without an ATM card. M-pesa is for
• Cashless transactions
• Money Transfer
• Bill Payments
• Airtime Purchase
• Bank Transactions
M-pesa in Various Countries
MobileMoney in Uganda
MobileMoney was launched by MTN Uganda in 2009 has grown to have 600000 customers within that year. Their marketing techniques helped them to acquire 1.9 million customers till 2013. MTN Uganda covers 80% of the country and this made MobileMoney available everywhere. Additionally, Grameen Foundation which is a micro financing agency in Uganda even lends smart phones on lease and this obviously add into the number of mobile phone users.
M-pesa in South Africa
Owing to the strict banking regulations in South Africa , M-pesa is not functioning well even it launched in 2010 with the partnership of NetBank and Vodacom. Despite the people without a bank account exceed 13 million, M-pesa has not got popularity yet so the partners are redesigning the product and planning new marketing strategies.
M-pesa Afghanistan
Amidst the Taliban threats M-pesa has gained such popularity that the police department started distributing salaries through this service. Launched in 2008 by Vodafone and partner company Roshan, the primary mobile provider, M-pesa even put an end the ghost police servants who were looting the salary of government officers. Finding this service every efficient, Afgan government is making use of this service for other financial transactions
M-paisa India
Indian version of M-pesa, M-Paisa was launched in 2011 by Vodafone and HDFC, has not started as a full-fledged service yet. In 2013 Vodafone partnered with ICICI also.
Conclusion
M-pesa seem to have great scope in poor countries where rural population is high. In Africa where electricity consumption is just 4% of the global electricity consumption, advance banking techniques like mobile banking, or online banking including having own PC is a distant dream for laymen.
Tuesday 4 February 2014
CSR in India an Overview
The European and American model of CSR may not match up with the quality and efficiency of Indian CSR policies; this is the confidence of the makers of Indian CSR policies. CSR has been well defined under section 135 of Companies Act which was passed in 2013. This act is all about bringing up corporate governance and strengthening corporate regulations.
The purpose of the CSR bill is to create a supportive environment, which allows corporates to strengthen their efficiency and to develop business policies, in order to connect between business and the communities with the focus in erasing our socio, economic and political issues and thus strengthening the society with the partnership of government and NGO s.
Section 135 says companies with net worth of Rs. 500 Cr or turnover of Rs. 1000 Cr or net profit of Rs. 5 Cr should have a mandatory CSR spend of 2 % of PBT. The various activities promoted should be focused on eradication of poverty, promoting education, promoting gender equality, women empowerment, reducing infant mortality and improving maternal health, prevention of diseases, protecting environment, and increasing employment opportunities etc.
In the US, CSR policies are rooted in 1920 s Community Chest Movement which was a part of Progressive Era from 1870s to 1920s. In this period number of millionaires in the US grew and started contributing to social purposes. CSR got its modern outlook in 1980. Current CSR model have a vivid structure and management.
•In the 2/3 of the companies identify corporate philanthropy and CSR within the corporate structure
•Corporate philanthropy and CSR is divided into corporate communications, Marketing and HR
•HR department channels the employ involvement programs
The Corporate Foundation Board includes the senior management including the CEO and the process can be centralized, decentralized or hybrid. The coordination will be through committee and supervision will be through the senior management.
The CSR initiatives in India are almost identified as a philanthropic, but it has moved from there to various levels of community building and institutional advancement. Schedule 7 of the Companies Acts details about the CSR initiatives and directs companies to focus on community development and CSR policies should go beyond mere community development and philanthropy. The focus should be on the work done with the profit after the profit is made.
The purpose of the CSR bill is to create a supportive environment, which allows corporates to strengthen their efficiency and to develop business policies, in order to connect between business and the communities with the focus in erasing our socio, economic and political issues and thus strengthening the society with the partnership of government and NGO s.
Section 135 says companies with net worth of Rs. 500 Cr or turnover of Rs. 1000 Cr or net profit of Rs. 5 Cr should have a mandatory CSR spend of 2 % of PBT. The various activities promoted should be focused on eradication of poverty, promoting education, promoting gender equality, women empowerment, reducing infant mortality and improving maternal health, prevention of diseases, protecting environment, and increasing employment opportunities etc.
In the US, CSR policies are rooted in 1920 s Community Chest Movement which was a part of Progressive Era from 1870s to 1920s. In this period number of millionaires in the US grew and started contributing to social purposes. CSR got its modern outlook in 1980. Current CSR model have a vivid structure and management.
•In the 2/3 of the companies identify corporate philanthropy and CSR within the corporate structure
•Corporate philanthropy and CSR is divided into corporate communications, Marketing and HR
•HR department channels the employ involvement programs
The Corporate Foundation Board includes the senior management including the CEO and the process can be centralized, decentralized or hybrid. The coordination will be through committee and supervision will be through the senior management.
The CSR initiatives in India are almost identified as a philanthropic, but it has moved from there to various levels of community building and institutional advancement. Schedule 7 of the Companies Acts details about the CSR initiatives and directs companies to focus on community development and CSR policies should go beyond mere community development and philanthropy. The focus should be on the work done with the profit after the profit is made.
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