Making Entrepreneurship a Rural Affair 18 Nov, 2008

With entrepreneurship penetrating every sector of the Indian market, rural India is not far behind.

In fact, the government, NGOs and the private sector unanimously agree that rural entrepreneurship = rural development. For the government and the NGOs, this is possibly the best way to uplift the rural community, and for the corporates, it provides value addition by giving them the opportunity to reach into remote areas.

There are a number of platforms in the urban areas that have a positive impact on the entrepreneurial environment – there are investors who are looking out for that one great idea that deserves their money; and there are networking events, where various entrepreneurs come together to understand various business models, and to discuss their own. A quick glance at the rural market, in comparison, shows that though entrepreneurship is headed in the right direction, there is still a long way to go.

The most critical factor in this context is the availability of viable and sustainable investment opportunities, and the lack of communication facilities in remote areas. The most common businesses that are initiated are those that are started by external groups, and entail textile production, agri-tourism, small retail businesses, craftsmanship etc. However, even though the NGOs and government bodies have collaborated to establish self-help groups to alleviate rural poverty, the lack of confidence amongst most of the rural population has proved to be a deterrent to the idea of innovative rural entrepreneurship.

Some of the main issues that the rural community faces while setting up their unique businesses include lack of knowledge about profit yielding industries, and of access to capital. Limited knowledge and experience about the resources available to build their business has also stopped the already apprehensive rural community to embrace the spirit of entrepreneurship.

I’d like to give a couple of examples of successful rural entrepreneurship – one that is led by Unilever, and the other which is a self-driven initiative by an individual in Tamil Nadu. Unilever connects self-help groups with business opportunities through Project Shakti. It specifically gives the women groups a chance to become small-scale sellers of its products, wherein each entrepreneur buys a small stock of items that are then sold direct to consumers in their homes. In association with the local district authorities, Unilever also provides free training on the basics of business management and sales. Piloted in 2002, Project Shakti saw immense popularity with more than 45,000 entrepreneurs covering 3 million homes in 100,000 villages in 15 states in India.

The other interesting instance is about a rural entrepreneur: T. Mariappan, a banana grower in a village close to Tiruchi, who designed a banana dehydrator by trial and error method, to produce a type of sweet from the fruit. Impressed by what Mr. Mariappan had to offer, the Indian Overseas Bank has sanctioned Rs. 11 lakh for his project. Currently marketing the produce in 400-kg packs and in sachets, the rural entrepreneur’s future plan is to use a solar energy-operated dehydrator for large-scale production.

According to a report by Food and Agriculture Organization (FAO) on entrepreneurship;

“From the perspective of the process of entrepreneurship, whether the location is urban, semi-rural or rural, is not important in itself. For example, the needs of a would be entrepreneur or an existing small business do not differ much from those in an urban area. To realise their entrepreneurial ideas or to grow and sustain in business, they all need access to capital, labour, markets and good management skills. What differs is the availability of markets for other inputs.”

And it is exactly this gap that needs to be filled if the rural entrepreneurs are to walk shoulder-to-shoulder with urban entrepreneurs.

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