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Bamboo Crafts Business Financial Scheme Proposal

Bamboo Crafts Business Financial Scheme Proposal

Bamboo Crafts Business Financial Scheme Proposal

1. Business Overview

The bamboo crafts business unit aims to produce eco-friendly and sustainable products, such as furniture, home décor, and utility items. Bamboo is an abundant resource, and bamboo crafts have a strong domestic and international market potential. The proposed unit will be set up in Jorhat, Assam, which is well-known for its bamboo resources.

2. Space and Equipment Requirements

Space Required

Area Required: 600 sq. ft. workspace (rent or own land)

Furniture and Fixtures

Item Cost (₹)
Workbenches and Tables 30,000
Shelves and Storage 10,000
Office Furniture 15,000

Machinery and Equipment

Item Cost (₹)
Bamboo Cutting Machine 50,000
Sanding Machine 40,000
Polishing Machine 25,000
Hand Tools 15,000

Electrical Expenses

Electrical Installation: ₹20,000

3. Total Fixed Cost

Particulars Cost (₹)
Space (Rent/Lease) 60,000 (annual rent)
Furniture & Fixtures 55,000
Machinery & Equipment 1,30,000
Electrical Installation 20,000
Total Fixed Cost ₹2,65,000

4. Working Capital & Recurring Costs

Monthly Operating Expenses

Particulars Cost (₹)
Salary (2 employees) 40,000
Raw Materials (Bamboo, Adhesives, etc.) 60,000
Telephone & Internet 2,000
Transportation Costs 5,000
Depreciation on Machinery 5,000
Interest on Capital 5,000
Total Monthly Operating Cost ₹1,17,000

5. Profit Calculation

Cost of Production

The monthly cost of production for bamboo crafts, including raw materials, labor, and overhead expenses, is ₹1,17,000.

Gross Profit

Estimated monthly sales from bamboo crafts: ₹1,80,000

Gross Profit: ₹1,80,000 - ₹1,17,000 = ₹63,000

Net Profit

Net Profit: ₹63,000 (before taxes)

6. Break-Even Point & DSCR

Break-Even Point: The business will break even at a monthly sales level of ₹1,17,000.

DSCR (Debt Service Coverage Ratio): Based on monthly profits, the business will be able to cover its loan repayments with a comfortable DSCR of 1.5, ensuring financial viability.

7. Loan Repayment Schedule

Year EMI (₹) Total Payment (₹) Outstanding Loan (₹)
Year 1 8,000 96,000 4,04,000
Year 2 8,000 96,000 3,08,000
Year 3 8,000 96,000 2,12,000
Year 4 8,000 96,000 1,16,000
Year 5 8,000 96,000 20,000

8. Financial Institutions Offering Assistance in Jorhat

  • State Bank of India (SBI) – Offers Mudra Loans and MSME loans for small businesses.
  • Assam Gramin Vikash Bank (AGVB) – Provides assistance to rural entrepreneurs through microfinance loans.
  • North Eastern Development Finance Corporation Ltd. (NEDFi) – Specializes in promoting MSMEs in the North East region, including bamboo-based industries.
  • Canara Bank – Offers various loans for small-scale industries.
  • Punjab National Bank (PNB) – Provides MSME and Mudra loans to small business entrepreneurs.

9. Eligibility Criteria for Loan Approval

  • Applicant must be aged between 18 to 50 years.
  • Should be an unemployed youth or a budding entrepreneur with a valid business plan.
  • Basic education requirement: Minimum 10th standard pass.
  • Should have a viable business model or project report for bamboo craft manufacturing.
  • Proper proof of space (rented/owned) for setting up the business unit.
  • No prior default on any bank loans, and CIBIL score of 650+ preferred.

10. Conclusion

The Bamboo Crafts business unit is a viable, eco-friendly venture with significant growth potential in Assam, particularly in Jorhat. With an initial investment of ₹2 to ₹5 lakhs, the business can generate substantial revenue, with low operational costs and strong market demand for handcrafted bamboo products. The business plan offers a good return on investment (ROI) and ensures financial sustainability. The loan, if approved, will provide the necessary financial assistance to set up the unit and sustain operations until the business becomes profitable.

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