Kozhikode: Kerala is in the midst of a power-packed political ascension which, probably, for the first time, was turning around a woman leader. As discussions raged on about dropping K K Shailaja as Health Minister in the new Pinarayi II Cabinet, a venture by women in Kozhikode was taken off life support after a ‘prolonged effort at revival.’
The Mahila Mall is another classic tale of failed enterprise in Kerala. It was in November 2018 that Mahila Mall, India's first shopping mall run by women, opened in a five-storey rented building in the heart of Kozhikode city.
The mall, with all facilities, including centralised air-conditioning, was a venture launched by a collective of 10 women from different Kudumbasree units in Kozhikode City Corporation limits.
Now, the mall, which was conceived as an ambitious initiative of the state’s self-help group Kudumbasree, is about to be closed down permanently. The financial crisis that has plagued the project has also left the 10 women bankrupt.
All outlets
The 36,000 sqft mall, managed by the Unity Kudumbasree unit, had 78 shops selling everything from garments, handicrafts, beauty products, footwear, and gadgets. These apart, there were beauty salons and eateries. Kudumbasree Mission had stated that the project would provide jobs to 250 women directly and 500 indirectly.
The mall, inaugurated by Chief Minister Pinarayi Vijayan, plunged into a crisis within months of opening, when some shops began defaulting on rent citing lack of business. The issues remained unresolved in the past one year and the Unity Kudumbasree decided not to renew the agreement with the shopkeepers. This leaves the 10 women promoters with a loan burden of around Rs 1 crore.
The crisis
The promoters had taken the building on a monthly rent of Rs 13 lakh from the building owner. The group had furnished the building at a cost of around Rs 1 crore as part of providing infrastructure facilities to shops. The promoters had paid an advance of Rs 40 lakh to the building owner. The group had also fixed monthly rents ranging from Rs 50,000 to Rs 2 lakh for each shop.
Vijaya, secretary of the Unity group, said there were 78 shops in the mall in the beginning. Most shops defaulted on rent within two months of inauguration and the promoters never managed to garner the Rs13 lakh required. “The highest total amount received was Rs 8.5 lakh a month. This was in January 2019. As many entrepreneurs in the mall were not experienced, they failed to make profits. This caused a huge financial crisis to the promoters. After six months, the slowdown in the market also affected the business in the mall and more than half of the shops closed in the following months,” Vijaya said.
Lockdown and aftermath
When the government announced a nationwide lockdown in March 2020 due to COVID-19, the mall was temporarily closed. Even after the withdrawal of the lockdown, several shops remained closed with entrepreneurs suffering huge losses.
At the time of the lockdown in March 2020, there were just 38 shops functioning. After the lockdown, the district collector held a discussion with stakeholders and the mall was reopened. But most of the shops still could not pay rent due to lack of business.
“In December 2020, the city Mayor held a similar meeting and the building owner agreed to reduce the monthly rent of the building from Rs 13 lakh to Rs 8 lakh; but this also was not enough to solve the issue. We have now decided not to renew the agreement and Mahila Mall will not be functioning after June,” Vijaya said.
Huge loan
She said the group had to repay the Rs 1 crore taken from the Union Bank of India. “Shop-owners are yet to pay Rs 10 lakh as rent. But they have already informed the promoters that they would not be able to do so. The building owner also said he would not return the Rs 40 lakh to the group. We don’t know how to handle the situation,” said another member of the group who doesn’t want to be named.
It is learnt that the efforts of the Kudumbasree and the Corporation to involve a private group had failed. Last year, the then leader of Opposition Ramesh Chennithala had demanded a vigilance probe into the scam behind Mahila Mall. He had alleged that the Kudumbasree and the Corporation had defrauded women entrepreneurs. A group of shops also approached the Corporation citing ‘mismanagement’ by the promoters.
T Prakashan, project officer of Kudumbasree, Kozhikode City Corporation, said all efforts to resolve the issues had failed and Kudumbasree cannot go ahead with the venture. “There were many reasons behind the failure of the business model including economic slowdown and COVID spread,” he said.
IIM-K report
The Indian Institute of Management, Kozhikode (IIM-K), under its social outreach programme, had reached out to the promoters to help them revamp their business model. The IIM-K team gave a detailed report to the promoters and listed corrective measures. But the financial issues remain unresolved.
“The initiative was well-intentioned. We managed to attain the goal to a certain extent as a majority of entrepreneurs who left the mall are continuing their business in other locations. There were many reasons for the failure of the mall, including slowdown, Nipah, and and COVID-19. The high price range of products had also kept customers away from the mall,” Vijaya said.
(Nijeesh Narayanan is an independent journalist based in Kozhikode)
