Rural Entrepreneurship

Introduction

Rural development is more than ever before linked to entrepreneurship. Institutions and
individuals promoting rural development now see entrepreneurship as a strategic
development intervention that could accelerate the rural development process.
Furthermore, institutions and individuals seem to agree on the urgent need to promote
rural enterprises: development agencies see rural entrepreneurship as an enormous
employment potential; politicians see it as the key strategy to prevent rural unrest;
farmers see it as an instrument for improving farm earnings; and women see it as an
employment possibility near their homes which provides autonomy, independence and a
reduced need for social support. To all these groups, however, entrepreneurship stands as
a vehicle to improve the quality of life for individuals, families and communities and to
sustain a healthy economy and environment.

The entrepreneurial orientation to rural development accepts entrepreneurship as the

central force of economic growth and development, without it other factors of
development will be wasted or frittered away. However, the acceptance of
entrepreneurship as a central development force by itself will not lead to rural
development and the advancement of rural enterprises. What is needed in addition is an
environment enabling entrepreneurship in rural areas. The existence of such an
environment largely depends on policies promoting rural entrepreneurship. The
effectiveness of such policies in turn depends on a conceptual framework about
entrepreneurship, i.e., what it is and where it comes from.

Rural entrepreneurship deals with following three issues: firstly, it sets out the reasons
why promoting entrepreneurship is a force of economic change that must take place if
many rural communities are to survive; secondly, it deals with what policies are
necessary in order to create an environment in rural areas conducive to entrepreneurship;
and thirdly, it considers women and entrepreneurship.

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Entrepreneurship concept

The entrepreneurship concept, what it means and where it comes from, is the foundation
for policies promoting entrepreneurship and the key to understanding the role of
entrepreneurship in development.

Who is an Entrepreneur?
“Innovator. One who recognizes opportunities and organizes resources to take
advantage of the opportunity.”

What, who and why?

Defining entrepreneurship is not an easy task. There are almost as many definitions of
entrepreneurship as there are scholar books on the subjects. To some, entrepreneurship
means primarily innovation, to others it means risk-taking? To others a market stabilizing
force and to others still it means starting, owning and managing a small business.
Accordingly, the entrepreneur is then viewed as a person who either creates new
combinations of production factors such as new methods of production, new products,
new markets, finds new sources of supply and new organizational forms; or as a person
who is willing to take risks; or a person who, by exploiting market opportunities,
eliminates disequilibrium between aggregate supply and aggregate demand, or as one
who owns and operates a business.

To choose the definition of entrepreneurship most appropriate for the rural area context,
it is important to bear in mind the entrepreneurial skills that will be needed to improve the
quality of life for individuals, families and communities and to sustain a healthy economy
and environment. Taking this into consideration, we will find that each of the traditional
definitions has its own weakness. The first definition leaves little room for innovations
that are not on the technological or organizational cutting edge, such as, adaptation of
older technologies to a developing-country context, or entering into export markets
already tapped by other firms. Defining entrepreneurship as risk-taking neglects other
major elements of what we usually think of as entrepreneurship, such as a well-developed

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ability to recognize unexploited market opportunities. Entrepreneurship as a stabilizing
force limits entrepreneurship to reading markets disequilibria, while entrepreneurship
defined as owning and operating a business, denies the possibility of entrepreneurial
behavior by non-owners, employees and managers who have no equity stake in the
business.

Entrepreneurship so defined, pertains to any new organization of productive factors and

not exclusively to innovations that are on the technological or organizational cutting
edge, it pertains to entrepreneurial activities both within and outside the organization.
Entrepreneurship need not involve anything new from a global or even national
perspective, but rather the adoption of new forms of business organizations, new
technologies and new enterprises producing goods not previously available at a location.
This is why entrepreneurship is considered to be a prime mover in development and why
nations, regions and communities that actively promote entrepreneurship development,
demonstrate much higher growth rates and consequently higher levels of development
than nations, regions and communities whose institutions, politics and culture hinder
entrepreneurship.

Entrepreneurial, orientation to rural development, contrary to development based on

bringing in human capital and investment from outside, is based on stimulating local
entrepreneurial talent and subsequent growth of indigenous companies. This in turn
would create jobs and add economic value to a region and community and at the same
time keep scarce resources within the community. To accelerate economic development
in rural areas, it is necessary to increase the supply of entrepreneurs, thus building up the
critical mass of first generation entrepreneurs, who will take risks and engage in the
uncertainties of a new venture creation, create something from practically nothing and
create values by pulling together a unique package of resources to exploit an opportunity.
By their example they will stimulate an autonomous entrepreneurial process, as well as a
dynamic entrepreneurship, thereby ensuring continuous rural development.

It is important to stress that rural entrepreneurship in its substance does not differ from
entrepreneurship in urban areas. Entrepreneurship in rural areas is finding a unique blend

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of resources, either inside or outside of agriculture. This can be achieved by widening the
base of a farm business to include all the non-agricultural uses that available resources
can be put to or through any major changes in land use or level of production other than
those related solely to agriculture. Thus, a rural entrepreneur is someone who is prepared
to stay in the rural area and contribute to the creation of local wealth. To some degree,
however, the economic goals of an entrepreneur and the social goals of rural development
are more strongly interlinked than in urban areas. For this reason entrepreneurship in
rural areas is usually community based, has strong extended family linkages and a
relatively large impact on a rural community.

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Sources of Entrepreneurship

The promotion of entrepreneurship, the understanding where entrepreneurship comes

from is as equally important as understanding the concept of entrepreneurship. It
indicates where the governments, national, regional or local, should target their
promotional efforts. If entrepreneurial skills, for example, are innate, active promotion
policies have a small role to play. If instead, only certain entrepreneurial characteristics
are innate, then active promotion policies can contribute to entrepreneurship development
in the community in the region and in the nation, since entrepreneurial skills can be
acquired through training.

Empirical research on the sources of entrepreneurship is extensive, particularly within the

discipline of psychology and sociology.

The standard perception is that entrepreneurship is a special personal feature, either a

person is, or is not an entrepreneur. According to this perception entrepreneurial traits,
such as the need to achieve, risk taking propensity, self-esteem and internal locus of
control, creativity and innovative behavior, the need for independence, occupational
primacy, fixation upon goals and dominance, are all inborn. Therefore, policies directed
specifically towards promoting the development of entrepreneurship would not help
much since chose characteristics cannot be acquired by training.

Risk talking propensity here is understood as the perceived probability of receiving

rewards (personal and financial) as opposed to the perceived probability of incurring a
failure (bankruptcy, loss of family ties).

Another perception is that some cultures or some social groups are more conducive to
entrepreneurial behavior than others. According to this view, the factors that contribute to
the supply of entrepreneurs are an inheritance of entrepreneurial tradition, family
position, social status, educational background and the level of education. Based on
research into the origins of business owners, it is believed that persons, who come from
small business owner families, are more likely to become entrepreneurs than others.

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Studies of family position of existing entrepreneurs demonstrate that entrepreneurs are
often found among elder children, since according to the explanation, they are pressed to
take more authority and responsibility at earlier stages than younger members of the
family. The outsider group, ethnic minority, or the outsider individual, the marginal
person, who are by a combination of different factors rendered outsiders in relation to the
social groups with whom they normally interact, are both viewed as a significant source
of entrepreneurship. It is claimed that to minority’s small business ownership means
escape form marginality. Whether educational background influences potential
entrepreneurs or not is a matter of debate. The popular idea of an entrepreneur is that of a
totally self-made man, lacking in formal qualifications. This of course is not in conflict
with findings that entrepreneurs who are better educated are more successful than the less
educated ones. Apparently two things are involved simultaneously: propensity to start an
entrepreneurial venture and skills to run the venture successfully.

The research which tries to explain, by personal traits and/or other social aspects, why
certain individuals become entrepreneurs, has not yet produced convincing results.
Consequently, a widely accepted view is the following: while personal characteristics as
well as social aspects clearly play some role, entrepreneurship and entrepreneurs can also
be developed through conscious action. Development of entrepreneurs and of
entrepreneurship can be stimulated through a set of supporting institutions and through
deliberate innovative action which stimulates changes and fully supports capable
individuals or groups. It is argued, that controllable variables such as a stable system of
property rights and freedom of action in the economic sphere, availability of other inputs
in the economy (besides entrepreneurship) as well as education and training, contribute
significantly to the development of entrepreneurship. Therefore, policies and programmes
designed specifically for entrepreneurship promotion can greatly affect the supply of
entrepreneurs and thus indirectly represent an important source of entrepreneurship.

This view has important implications for entrepreneurship development in rural areas. If
currently entrepreneurial activities in a given rural area are not thriving? One should not
jump to the conclusion that entrepreneurship is something inherently alien to rural areas.
While this feeling could have some legacy due to the slower pace of changes occurring in

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rural areas compared to urban ones, proper action can make a lot of difference with
respect to entrepreneurial behavior of people living in rural areas. Many examples of
successful entrepreneurship confirm this statement and there is no reason why there
should not be plenty of them. By bringing together different capabilities and different
experiences in entrepreneurship development, everyone could enhance his/her own
capabilities, motivation and determination in achieving the goal: attaining a sustainable
and healthy rural economy and environment in order to ensure a high quality of life for
individuals, families and communities.

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Entrepreneurship Development Programmes

India is a land of enterprises, where almost 70% of the population is still self-employed
(some place this estimate as high as 80+ %). Entrepreneurship development in India
happens in both the sectors organized and the un-organized sectors in completely
different manner. The organized sector has all the limitations of the red tape and the
advantages of resource allocation. It is estimated that the government spends about 80%
of its resource allocation for enterprises on this sector. The institutions setup for
enterprise development has a set pattern of thinking - dictated either through government
policy or industrial influence, which again is dictated by necessity. There has hardly been
a case where they have envisioned changes in a particular sector and promoted
entrepreneurs to meet the changes.

Research, if any, into the emerging trends in any industrial sector are unknown to
entrepreneurship development institutions run by government and finance sector. There
may not even be much budget allocation for such research. There are quite a few
freelancers, though highly visible, they have no responsibility towards the entrepreneurs
and their impact does not add up to much in terms of impact.

The un-organized sector is more dynamic, but, equally limited. Here the individual who
has seen the opportunity is the prime mover and the rest follow as a herd. The onus of
risk lies with the one who ventures first into the untreaded path.

Both have the inherent approach problem of addressing an enterprise as though it were
existing in a vacuum from the rest of the society.

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Entrepreneurship, Creativity and Leadership

Entrepreneurs convert an opportunity through creativity and innovation into a profitable

venture by efficiently utilizing existing or new resources. Many big entrepreneurs in
world were those who were driven by an untiring passion. A business leader knows
individual strengths and passions that drive them and then exploit them in a manner that
benefit both employees and the organization. A leader can utilize and retain enterprising
individuals in the organization by creating enabling environment where passions can be
sustained and thrived.

Business leaders are generally people with indomitable will but who often adopt strategic
flexibility in achieving entrepreneurial objectives. Renowned South Indian poet, Saint
Tiruvalluvar, said over 2000 years ago, ‘the world is his who accomplishes his job with
untiring compassion and zeal, (Karumam Sidhaimal Kannoda Vallarku, Urimal Udaithu
Iv Ulagu).

Swami Vivekanand said over hundred years ago, ‘We reap what we sow. We are the
makers of our own fate. The wind is blowing; those vessels whose sails are unfurled
catch it, and go forward on their way, but those which have their sails furled do not catch
the wind. Is that the fault of the wind? We make our own destiny.’

On March 16, 1945, Mahatma Gandhi wrote, ‘There is an eternal struggle going between
destiny and human endeavour. Let us continue to endeavour and leave the result to God’.
On following day, i.e., March 17, 1945, Gandhiji added, ‘Let us not leave everything to

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destiny, nor be vain about our endeavour. Destiny will take its own course. We should
only see where we can intervene or where it is our duty to do so, whatever be the result.’

Individuals with entrepreneurial skills who pursue social issues like poverty alleviation,
drinking water supply, rural sanitation, environmental protection, healthcare, etc. are
called ‘social entrepreneurs’. According to Mahatma Gandhi, ‘as soon as a man looks
upon himself as a servant of society, earns for its sake, spends for its benefit, then his
value system automatically improves and there is ahimsa in his venture’.

A leader always lives and works for a cause beyond self and never hesitant to make
supreme sacrifices for its realization. Netaji Subhas Chandra Bose, a great Indian leader
and an epitome of bravery and patriotism, a few before his arrest in Kolkata on January 2,
1932 had written to his friend, ‘Do you want the beautiful scent of a rose in full bloom? If
so, you must accept the thorns. Do you want to see the bounty of the smiling dawn? If so,
you must live through the dark hours of the night. Do you want the joy of freedom? If so,
you must pay the price. The price of freedom is suffering and sacrifice.’ It is well known
that Netaji never cared for his personal safety while fighting for India's freedom
(Archives, Cellular Jail, Port Blair).

According to Pt. Jawaharlal Nehru, free India's first Prime Minister, service in the Indian
context means service of teeming millions. The first Prime Minister often called him first
servant of India. Mother Teresa was epitome of service and living for others sake. She
once said, ‘There are many medicines and cures for all kinds of sickness. However,
unless kind hands are given in service and generous hearts are given in love, there cannot
be a cure for the terrible sickness of feeling unloved.’

Organizing local entrepreneurs and connecting their outputs to the world markets present
some of the most challenging opportunities for social enrichment through corporate
intervention. ITC's ‘e-Choupals’, Pepsi's ‘contract farms’ and EID Parry's IT solutions,
are examples of large corporations adding value by networking with small-scale
producers.

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By setting up rural entrepreneurs with internet access and using modern technology to
accurately weigh farmers crops and pay them promptly and adequately, ITC's e-Choupal
system is transforming India's agricultural supply chain, reducing systemic corruption
and giving farmers both better prices for their crops along with self respect and
confidence in dealing with their more fortunate brethren.

Like ITC, Pepsi's contract farming provides good framework for flow of credit to
marginal/small farmers at a reduced transaction cost. As a very large premier bank in
India, ICICI Bank provides numerous banking services to the rural poor at affordable
costs. In partnership with other financial institutions, ICICI Bank has co-located ATMs
with rural Internet kiosks and introduced smart card technology to provide secured low
cost transactions and loan management services. The ICICI Bank has, among others,
created a network of eight thousand Self Help Groups, each with twenty women to
benefit them economically, with a view to provide vehicle for micro-financed businesses.

It occurred to Vilasrao and a group of innovative farmers struggling to earn livelihood

that rural entrepreneurs could instead divert their energies for conserving rainwater which
could meet formidable challenge posed by drought. Local authorities particularly the
district collector showed keen interest in building structures for water storage and
extended all possible support to the farmers for building the local water bodies (Vilasrao).

Spirited rural entrepreneurs spared no efforts in building scores of water storage

structures in record two to three months time, and when the rains actually arrived, huge
storage capacity was already in place for storing rainwater. Initially, the pilot project was
limited to 15 villages, but later on structures were built practically in all regions that were
hard hit by the drought. If the experiment is successful in one state, it can be replicated
anywhere in the country.

Considering that land was very expensive resource and it was unevenly owned by
farmers, for which there was little that authorities could do, it occurred to Vilasrao that if

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not land at least water could be more rationally allocated among poor farmers on the
basis of family size rather than size of landholding. This new basis for water allocation
and pioneering leadership of Vilasrao and the District Collector largely contributed for
the spectacular success of the ‘Pani Panchayat’ experiment.

An innovative leader builds dynamic work culture, attracts and retains talent, and
encourages innovation. Innovation determines the cutting edge of a business. The word
innovation comes from the Latin word innovare to renew. Innovative employees can act
as ‘business transformation agents’ who bring innovative solutions that can transform the
business. It is the leader who himself may not be ‘know it all’ but can make his whole
team innovate as innovation is a culture and not one person activity.

Leaders often need to be flexible to ensure that the organization will be able to adapt to
change, quickly respond to new threats and opportunities and manage diverse and
decentralized operations more efficiently. Flexibility is often described as ability to adjust
to changing conditions without losing one's original shape, e.g., a tree can bend with the
wind, and then shift upright.

Leaders are drivers of creativity in organizations. Imagination and dreaming are the real
drivers of corporate growth. Creativity breeds in an independent mind. Happy minds are
seldom creative and some times it is only in crisis that individuals tend to become more
creative. Creative individuals often derive insights from obstacles and hurdles they face
in their day-to-day life.

Innovation differs from invention though both are creative activities. Invention is a
creative event whereas innovation is a creative process. An organization is a place for
generating new ideas with a view to create value and then linking these ideas with
resources - human, financial, infrastructure and knowledge. With creativity and
innovation, organizations can provide ‘value added’ to shareholders and improve
business performance, meet social expectations and minimize damage to the environment
from their operations and services.

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Creativity combined with implementation of creative idea is innovation. That is why Mr.
Azim Premji, Wipro Chairman, recently wrote in the Bhavan's Journal (2006) ‘creativity
is about thinking new things whereas innovation is about doing new things.’ They are
always very sensitive to problems, needs, attitudes, and feelings of others. Creative
leaders as also creative individuals are always very flexible to quickly adapt to new
developments and changing situations.

According to Mr. Narayan Murthy, Chairman, Infosys Technologies Ltd. (The Economic
Times, May 16, 2006), ‘the future is all about how open minded you are to learn from
other people. Companies like Infosys that bring innovation in making this collaborative
distributed development model become more and more efficient is where the future is.
‘Collaborative distributed development’ in simple words means sourcing capital from
where it is cheapest, sourcing talent from where it is best available, producing it is where
it is most cost effective, and selling where the markets are.

An organization or institution may have advantage of superior machinery and technology

initially, but it may not be enough to maintain competitive advantage all along as with
subsequent technological advancements winning advantage will be lost one day.
However, if a leader manages to retain its competent and committed workforce who is
flexible to meet any challenge through synergy of intellectual potential to revamp
technological capabilities while retaining timeless core values, it may provide needed
support for survival in the market place against all odds.

India needs to rekindle people's entrepreneurship qualities particularly when it is at

threshold of becoming a leading economic power in the globalization era. Government
policy such as deregulation and lowering of capital gains tax can provide fillip to
entrepreneurship. Business schools can also provide necessary grooming for young minds
to turn entrepreneurs. Above all, in organizations it is company leadership that can
nurture and sustain entrepreneurship skills of its employees.

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Environment conducive to Entrepreneurship

Behind each of the success stories of rural entrepreneurship there is usually some sort of
institutional support. Besides individual or group entrepreneurial initiative the enabling
environment supporting these initiatives is of utmost importance.

The creation of such an environment starts already at the national level with the
foundation policies for macro-economic stability and for well-defined property rights as
well as international orientation. Protection of the domestic economy hinders instead of
fosters entrepreneurship. National agricultural policies such as price subsidies to
guarantee minimum farm incomes and the keeping of land in production when over-
production already exists are definitely counter-productive to entrepreneurship. The long
run solution for sustainable agricultural development is only one, i.e.' competitive
agriculture. While prices can set the direction, entrepreneurs who will meet the challenge
of increasingly demanding international markets and who will find profitable alternative
uses of land, alternative business opportunities and so on are needed. Therefore, policies
and programmes targeted more specifically at the development and channeling of
entrepreneurial talent, are needed. Policies to increase the supply of entrepreneurs,
policies developing the market for other inputs into successful entrepreneurship, policies
for increasing the effectiveness of entrepreneurs and policies for increasing demand for
entrepreneurship can significantly speed up entrepreneurial activities at national, regional
and community levels.

The policies and programmes targeted specifically to the development of

entrepreneurship do not differ much with respect to location. 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.

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The inputs into an entrepreneurial process, capital, management, technology, buildings,
communications and transportation infrastructure, distribution channels and skilled
labour, tend to be easier to find in urban areas. Professional advice is also hard to come
by. Consequently, entrepreneurial behaviour, the ability to spot unconventional market
opportunities, is most lacking in those rural areas where it is most needed i.e., where the
scarcity of 'these other inputs' is the highest.

These are the reasons why rural entrepreneurship is more likely to flourish in those rural
areas where the two approaches to rural development, the 'bottom up. and the 'top down',
complement each other. Developing entrepreneurs requires a much more complex
approach to rural development than is many times the case in practice. It requires not
only the development of local entrepreneurial capabilities but also a coherent
regional/local strategy. Evidence shows that where this is the case, individual and social
entrepreneurship play an important role in rural economic, social and community
development. The top down approach gains effectiveness when it is tailored to the local
environment that it intends to support. The second prerequisite for its success is that
ownership of the initiative remains in the hands of members of the local community. The
regional development agencies that fit both criteria can contribute much to rural
development through entrepreneurship.

Other institutions that can make a difference to rural development based on

entrepreneurship are agricultural extension services. However, to be able to act in this
direction, they too must be entrepreneurially minded. They must see agricultural
activities as one of many possible activities that contribute to rural development. They
must seek new entrepreneurial uses of land and support local initiative in this respect.
While tradition is important it is nevertheless dangerous to be over-occupied with the
past, otherwise the rural community may turn into a nostalgia-driven society. Networking
between different agencies involved in the promotion of rural development through
entrepreneurship, by pooling together different sources and skills, by reaching a greater
number of would be entrepreneurs and by assisting a greater number of local
entrepreneurial initiatives, can have a much more positive effect on rural development
than when each agency is working on its own.

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Entrepreneurship in rural areas can benefit a lot from the so called strategic development
alliances, i.e., partnership among governments or nonprofit seeking organizations,
universities and the private sector.

To summarise, policy implications for rural entrepreneurship development are:

 Sound national economic policy with respect to agriculture, including

recognition of the vital contribution of entrepreneurship to rural economic
development;
 Policies and special programmes for the development and channelling of
entrepreneurial talent;

 Entrepreneurial thinking about rural development, not only by farmers but

also by everyone and every rural development organization; and

 Institutions supporting the development of rural entrepreneurship as well

as strategic development alliances.

If entrepreneurship is fundamentally about people and ideas, what is business'? To quote

Kao again, he simply stated, a business is an organization that has customers. To stay in
business, an entrepreneur has to match that idea or dream with what a customer thinks he
or she wants, and again this requires understanding people.

Michael Porter in his book Competitive Strategy states that new or evolving businesses
must make a wide range of critical organizational choices that will determine their
competitive fate. If they make the right choices, they can create barriers to competitors.
Porter says these barriers against competition come less from the need to command
massive resources than from:

 The ability to bear risk;

 Being creative technologically; and

 Making forward-looking decisions to attract people to work.

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Risk taking

Sometimes not taking a risk is a risk.

For example, the 1 7th century Dutch were the vigorous economic and social innovators
of their time. But within only a hundred years they were overtaken by the English. Why'?
Because a risk averse, fearful attitude settled over Holland. Those who had accumulated
fortunes in the years of prosperity attended exclusively to keeping them. Politics turned
ugly. Public spirit disintegrated. The Dutch became slow to adopt new advances in
shipbuilding, weaving, fishing, mapmaking and navigation. They clung to the established
order, threatened by new ways of doing things. They refused to risk rearranging the
safety of the present and thus missed the chance to have the talents, skills and
organizational arrangements on line when they were needed. No society or business can
thrive today without taking risks and adjusting to change.

So what prevents people from taking risks? In short the answer is FEAR. Fear of failure,
fear of rejection, fear of conflict, fear of uncertainty, fear of losing control, power or
status.

Risk aversion may be one of the most vexing problems you face in attempting to promote
rural entrepreneurship. There are strategies that can be used to encourage greater risk
taking particularly by addressing people's fears.

Change and uncertainty

There is an old Chinese curse that says, "May you live in interesting times". Interesting
times are the curse and the blessing of an entrepreneurial firm and it is the true
entrepreneur who can handle the sources of uncertainty that come with the territory
without falling apart.

First, the business opportunity itself is surrounded with uncertainty questions to be

answered about market size, pricing, and viability of the original idea, customer response
and product/service in a reasonable length of time.

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He or she must be able to lead, manage, identify, prioritize, execute and most
importantly, make decisions.

An entrepreneur must be more like a bamboo plant able to sway in any wind without
breaking versus a rigid tree that can easily be toppled by a sudden storm.

There are no magic formulas or tried and true approaches that are guaranteed to work.

Most experts agree that not everyone is suited for the entrepreneurial task, but nearly all
successful entrepreneurs:

 cope well or even thrive on uncertainty;

 are creative problem solvers;

 have strong human and organizational skills; and

 Understand the relationships between organization, strategies and

environment.

Entrepreneurs must also expect to put in long hours more like five to nine, rather than
nine to five and be patient with the complex, diverse task at hand.

Decision-making

Making decisions is a criterion for success. In my experience, a person who cannot reach
a decision promptly once he has all the necessary information cannot be depended upon
to carry through on decisions made. There is often a linkage between deciding and acting
to carry through. Not making a decision can be a bad decision.

Dwight Eisenhower had a difficult time deciding on the best moment for the D Day
attack. Finally he is quoted as saying, "No matter what the weather looks like, we have to
go ahead now. Waiting any longer could be even more dangerous. So let's move it".

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The point here is that people who can judge when a decision needs to be made and make
it are far more likely to succeed in entrepreneurial ventures.

The other trick is deciding not on the basis of the past or present, but making the right
decision for future, as yet unknown, circumstances.

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Entrepreneurship in rural areas

Most basic characteristics noted in the lives of successful entrepreneurs:

 They can orchestrate people, strategies and technologies to fit changing

environments;
 They are usually creative risk-takers

 They thrive on change and cope well with uncertainty;

 They are determined and disciplined in implementing their visions and ideas;
and

 They enjoy deciding and make forward looking decisions.

In encouraging entrepreneurship in rural areas, seeking leadership with these

characteristics is essential. While training can help people improve in some of these
areas, we should not be naive about what adult training can or cannot accomplish.

A more long-range but perhaps more promising educational approach is to encourage

development of these entrepreneurial characteristics in young people. Putting in place
local opportunities, before young people seek 'better' possibilities in cities and towns,
could change the future of some of these areas.

When we look at our rural development efforts in the U.S.A., we can be quite critical. We
have done a lot for general process type community development that has not resulted in
a real economic pay-off. There are, of course, national policy and financing barriers that
have also played a role. However, more targeted and focused programmes directed
toward real entrepreneurship could become a more viable possibility today, particularly
with new communication technologies.

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Finanacial Help To Rural Entrepeneurs

More than subsidies poor need access to credit. Absence of formal employment make
them non `bankable'. This forces them to borrow from local moneylenders at exhorbitant
interest rates. Many innovative institutional mechanisms have been developed in India to
enhance credit to poor even in the absence of formal mortgage. Following are the various
micro-finance options available in India, along with the relevant links.

1. NABARD & microFinance (The SHG Bank linkage programme)

The guiding spirit behind NABARD’s microFinance initiatives has the following
contours:

o Offers cost effective approaches to formal institutions for expanding

outreach to poor.
o Develop collateral substitutes.
o Focus on rural poor, especially women.
o Facilitate empowerment of the poor and
o Effectively pursue the macro-economic objectives of growth.

NABARD's Corporate Mission was to reach microFinance services to one million

SHGs by the year 2007. This translates to about 100 million rural poor or 1/3rd of
the total poor in the country. With the whole- hearted support and concerted

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endeavour of associating partners in this mission, the one million SHG mark has
been reached well head of the schedule. To be precise 1,079,091 self help groups
have been financed by banking channels in the country as on 31 March 2004
covering 16 million families and approximately 90 million rural poor.

2. MicroCredit with SBI

SBI has taken up SHG movement as a mission.A noble mission to reach those
families who were hitherto having no access to the credit by any formal financial
institution and, therefore, were depending on informal sources and moneylenders.
Micro finance is not new to State Bank of India. Banks association with non-
government organizations (NGOs) or voluntary agencies in extending financial
help can be traced as far back as 1976 well before NABARD introduced SHG-
Bank Credit Linkage Programme as a pilot project in 1992.

SBI is maintaining its position as a leader among Commercial Banks in credit

linking of SHGs and is a prime driver for the movement.As at the end of March
2006, SBI with a share of approximately 47% of total SHGs financed by
Commercial Banks is far ahead of others.

3. Haryana State Cooperative Apex Bank Limited

The Haryana State Cooperative Apex Bank Ltd. commonly called as

HARCOBANK plays a vital role in rural banking in the economy of Haryana
State and has been providing aids and financing farmers, rural artisans,
agricultural labourers, entrepreneurs, etc. in the state and giving service to its
depositors.

4. Sindhanur Urban Souharda Co-operative Bank

Sindhanur Urban Souharda Co-operative Bank, popularly known as SUCO

BANK is the first of its kind in rural banks of India. The impressive story of its
inception is interesting and inspiring for all the youth of this country.

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 Rural Entrepreneurship

5. United Bank of India

United Bank of India (UBI) also plays an important role in regional rural banks. It
has expanded its branch network in a big way to actively participate in the
developmental of the rural and semi-urban areas in conformity with the objectives
of nationalisation. Full Details

6. Syndicate Bank

Syndicate Bank was firmly rooted in rural India as rural banking and have a clear
vision of future India by understanding the grassroot realities. Its progress has
been abreast of the phase of progressive banking in India especially in rural
banks.

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 Rural Entrepreneurship

Institutes of Rural Entrepreneurship

Entrepreneurship Development Institute of India (EDI)

The Entrepreneurship Development Institute of India (EDI), an autonomous body and

not-for-profit institution, set up in 1983, is sponsored by apex financial institutions,
namely the Industrial Development Bank of India (IDBI), the Industrial Finance
Corporation of India (IFCI), the Industrial Credit and Investment Corporation of India
(ICICI) and State Bank of India (SBI). The institute is registered under the Societies
Registration Act 1860 and the Public Trust Act 1950. The Government of Gujarat
pledged twenty-three acres of land on which stands the majestic and sprawling EDI
campus.

Core Competence

 Capacity building of NGO functionaries to equip them with skills in:

- Rural Entrepreneurship Development

- Sub-sector focused Entrepreneurship Development

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 Rural Entrepreneurship
- Group Entrepreneurship Development

- Rural Marketing Management

- Micro-Entreprise and Micro-Finance Development

- Informal Micro-Credit Delivery System

 Artisan Cluster Development by creating a cadre of Change Agents with skills to

revitalize clusters

 Promotion of science & technology based rural enterprises

Drishtee

Vision:
"Connecting India Village by Village"

Mission:

"To create and implement a sustainable platform of entrepreneurship for enabling the
development of rural economy and society through the use of information and
communication technologies"

Role in Rural India

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 Rural Entrepreneurship
The role of Drishtee in Rural India is continuous, productive and development-oriented.
With its aim of delivering services and related information to the village community
through its Information Kiosk, Drishtee has been recognized as a leading player in the
Information and Communication for Development domain. The total number of services
offered on the Drishtee network in Rural India has grown from a figure of three to twelve
and it has been able to create 1500 jobs in the rural segment.

1. Drishtee’s Role as an Organization:

As an organization Drishtee Dot Com Ltd. is committed to reform the socio-political

scenario of the Indian village. Incorporated in August 2000, the organization seeks to
mark a paradigmatic shift in the delivery of services to rural India by serving villagers
directly instead of intermediaries. Contractual arrangements with state governments
provide the bedrock upon which Drishtee is able to build a network of sustainable
franchises. The local entrepreneurs provide additional customized services to the
surrounding villages such as ICT training, regional job postings and even matrimonial
services, while the entire network is increasingly utilized as an outlet for commercial
services such as insurance, education, and agri-services. In association with its partners
like Microsoft, Intel, ICICI, Airtel, Scojo Foundation, Amaron, HCL, CEEP, Quiver
Infoservices Ltd. and Drishtee Foundation, Drishtee is serving 1.5 million villagers of
India.

2. Drishtee as an Innovator:

Drishtee is a rural network for delivering services and related information to the village
community through an ICT Center called as Drishtee Soochnalaya or Information Kiosk.
The Kiosks are run by entrepreneurs selected from the villages and have been designed to
follow a service-delivery based revenue model.

More than 600,000 villages of India house two-thirds of its people, and earn one-third of
the national income. A report by the National Council of Applied Economic Research
(NCAER) in India shows that rural consumers represent more than 50 percent of
consuming classes and are the prime target market for consumer goods and essential

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 Rural Entrepreneurship
services such as education, healthcare and employment. Despite such an open market,
around 68% of the rural economy still lies untapped. Villagers are desperate for
appropriate services at affordable cost - from education to market access, from telecom to
healthcare, from financial intermediation to entertainment. But the non-availability of
such services linked to the lack of perceived opportunities in rural areas by the investors
creates a dead end for progress.

Drishtee’s innovation is manifested in charting an alternate distribution network for

products and services in rural India.

3. Drishtee as an Initiator: In a short span of five years Drishtee has been able to
successfully initiate and run several services in various parts of Rural India, for which the
villagers mostly had to travel to the nearest town or city.

 Initiation in Education: To reduce the technological gap and to bring the rural
youth up-front with the city people, Drishtee took the initiative to introduce
Computer and English education by the name of CEEP to various villages.
Receiving a huge response did not come as a surprise to Drishtee. Although there
were many other players who were trying to establish themselves, Drishtee never
considered them as its competitor, as the objective of Drishtee was not revenue
generation, but to bring ICT to the Rural India at the lowest possible cost.
Currently there are more than 4000 CEEP students across Indian parishes, which
give an estimation of the successful students who already completed this course
and those who are still waiting to join and avail this opportunity, when all the
course duration lies between 3 months to 1 year.
 Initiation in Employment generation: Drishtee through its Rural BPO Project,
intends to leverage ICT for BPO Services on a pilot basis, at rural level, to learn
and understand the potentiality, problems and business dynamics on BPO services
with a view to generate employment for local educated youths as-well-as to help
develop a sustainable business model that could be scalable and replicable in
other parts of rural India. This pilot study was carried out in a small village named
‘Saurath’ in Madhubani district of Bihar state, situated in eastern India. After

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 Rural Entrepreneurship
gauging the success of the pilot, Drishtee has ready plans to replicate this project
across five odd kiosks and later on the whole concept will be replicated across all
Drishtee kiosks and rolled out as one of the services.
 Initiation in Women Empowerment: Drishtee aims to spread the benefits of
ICT to thousands of women in the rural India. This initiative has already been
taken in some parts of the country. Currently, there are various Drishtee Kiosks
most of them owned by men serving the purpose of providing ICT based services
to the people. Very few female in villages get the opportunity to own a
soochnalaya or kiosk. To encourage women's participation, Drishtee had taken up
the project “Unlimited Potential” in collaboration with University of Manchester
United to create and develop more and better women’s ICT based enterprises.
Drishtee believes technology can play an important role in facilitating its
objectives which could further result in upgrading and improving the hidden
caliber and efficiency of the women power existing in India.
 Initiation in Providing e-health: Drishtee along with its partners and its network
of ICT kiosks is proposing to take a major lead in taking quality health services to
the rural populace. It proposes to involve leading players in the health care
domain and synergize their competency and bind it with the strength and
credibility of ICT entrepreneur to reach a broad based section of the community.
 Initiation in Promoting the Rural Artisans: In association with Quiver Info
services Ltd., through http://www.drishteehaat.com/, an online store for rural
artisans to showcase their products to those who appreciate the traditional and
ethnic art of India, Drishtee has extended its hand to introduce to the world the
real artisans behind these arts. These artisans (mostly women) are from the lowest
income strata of rural India. Drishtee has taken the initiation to bring in front
those artisans who miss their part of fame and appreciation from the world, which
is taken away by the intermediaries, leaving behind the artisans with a handful of
money.
 Initiation in Micro-finance: Through the pilot study that was done to understand
the current status on loan requirement in the village as-well-as to assess the
potentiality of this market in the village, during Panchayat Adhayan in Saurath,

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 Rural Entrepreneurship
Drishtee decided to come up with a solution for the villagers, where they can take
small loans from banks at a lower interest rate, and safeguard themselves from
getting exploited by the local merchants and relatives, who charge interest rates as
high as 30%. Drishtee along with its partner ICICI Bank has tied up to offer
custom designed micro loans to the rural people, which will help them to improve
their economic activities.

4. Drishtee as a Service Provider:

The services of Drishtee are developed with the focus on better earning of the Kiosks as
well as better growth opportunities for the community. Typically, the services are divided
into local services and Centralized services. The local services can be offered at kiosk
level itself, whereas the Centralized services are those which are offered through
Drishtee. The centralized services further can be divided into computer based services
such as computer and English education, and other services and products such as
Insurance, Recharge coupons for mobiles and even products such as Scojo reading
glasses and Amaron batteries.

The local services which have been successful include: Operating a Digital Photo Studio,
Entertainment services through the DVD of the computer and Various Internet based
information services that the Kiosk can easily offer such as information on Agricultural
products like Mandi rates or Weather information, or exam results or even some limited
e-governance services that the Government has recently introduced for free access.

Drishtee presently in most of the areas does not offer e-governance services. Availability
of e-governance service in a village depends upon the local administration, district
administration and the state government. In case this service becomes available in the
near future, it would be considered as a bonus for the villagers.

Services offered:

The services that are offered from a kiosk can be divided in two parts: Services and
Products

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 Rural Entrepreneurship
Services Products

CEEP Computer Courses Amaron Batteries

(STEP) Step Towards English Proficiency

ICICI Prudential Life Insurance Scojo Reading Glasses

ICICI Lombard General Insurance

Agri-queries Pustak Mahal

PCO & Mobile recharge coupons (Airtel)

E-governance

Business Process Outsourcing

Rural ecommerce

In its journey of 6 years with limited resources in hand, Drishtee has been able to
successfully replicate its model across India. In its quest to provide services to the rural
communities across India it has learnt some hard lessons in the past but it still has an
appetite for learning more. Considering its customers as its teachers Drishtee has gained
several valuable insights over the years.

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 Rural Entrepreneurship
Article

Spreading the net to rural India

Drishtee takes the Internet to villagers to empower them

Drishtee means vision in Hindi. Little wonder, the two sister organisations —
Drishtee.com Ltd and Drishtee Foundation — are dedicated to bringing a new vision to
rural India. They are delivering the government and other services to villagers through
ICTs. They rely on the enterprise of local entrepreneurs supported by a central
organisation and ICT infrastructure. Improving services to villages and increasing the
economic viability of rural entrepreneurship through proprietary arrangements with the
governments to provide services at lower than government costs are some of the stated
aims, according to Satyan Mishra, CEO, Drishtee.

Drishtee Foundation was registered as a society in February 2003. It uses ICT tools to
communicate the benefits of ICTs to outside stakeholders. Its basic objective is to
sensitise and promote the usage of ICT kiosks among users and the outside stakeholders.
It advocates the need of basic accountability, timely reporting and spreading general
awareness about new economy. Drishtee.com was founded in 2000. It has two roles: to
expand and build the network and to sell services through the kiosks which it sets up. A
kiosk is a multi-point service delivery channel in a village. The kiosk operator provides
different kinds of services to villagers like computer education, insurance, digital photo
studio and the Internet-based services. The kiosk is equipped with a computer, a digital
camera and a photo printer.

An Internet kiosk in a rural area combines the role of a retail shop for services, a training
and facilitation centre.

Says Mishra, “ICICI Bank is financing our kiosks throughout India except in the North-
East. We are retailing ICICI products through these kiosks.”

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 Rural Entrepreneurship
Adds Suvalaxmi Chakraborty, general manager, Rural, Micro-banking and Agri-business
Group, ICICI, “The ICICI Bank as part of its strategy to reach out to rural India uses rural
Internet kiosks as a sustainable way of servicing the largely dispersed rural populace.
However, with over six lakh villages to be serviced along with numerous micro-level
challenges in operationalising this channel, ICICI Bank has taken the partnership route to
set up and manage the rural kiosks.”

She adds, “Drishtee is one of the key partners in ICICI Bank’s endeavour to deliver
customised financial services to rural customers, through innovative delivery channels.
ICICI Bank offers financial products and services such as loans, investments and
insurance through these kiosks. Along with this, the kiosks will carry out other activities
as envisaged by Drishtee.”

Mishra adds, “Microsoft is another key strategic partner and we are working together to
build the network, conduct research and provide valuable software for these kiosks.
Amaron is helping village entrepreneurs in owning the kiosks.”

Mishra says the network is being expanded gradually. “We would focus on business
viability for each of these kiosks and the network as a whole. Drishtee’s model is based
on sustainability, scalability, entrepreneurship and ICTs. The focussed approach of the
organisation has helped it remain afloat without donations.”

Sristi

Sristi (Society for Research and Initiatives for Sustainable Technologies and Innovations)
is not a technology project per se. Rather, it is a ?a non-governmental organisation setup
to strengthen the creativity of grassroots inventors, innovators and ecopreneurs engaged
in conserving biodiversity and developing eco-friendly solutions to local problems.?

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 Rural Entrepreneurship
Wrote the Far Eastern Economic Review, which awarded Sristi a Gold Award for
Innovation in 2000:

After seven years of working in 5,500 villages primarily in the Indian state of Gujarat,
Sristi has found a wealth of what it calls "grassroots innovations." Those discoveries are
in turn catalogued in a database (current count: 10,000) and shared in a newsletter. Now
Sristi is aiming to take the process a step further: One of its offshoots has begun patenting
and investing in various creations on behalf of inventors. "There is only one thing in
which poor people are rich and that is their knowledge," says Sristi's charismatic founder,
Anil Gupta, a professor at the Indian Institute of Ahmedabad.

Finding ethical ways to share such local inventiveness and expertise was what first drove
Gupta to start Sristi's informal predecessor, the Honey Bee network, back in 1990. A
scientist respected for his work in economics and ecology, Gupta nevertheless felt
troubled. Nearly all of his studies were published in English, inaccessible to the people
who had helped him to write them. By using their knowledge to further his research,
Gupta wondered if he wasn't impoverishing them in the process.

The eventual answer was Sristi, which not only seeks out innovation, but spreads it in six
Indian languages as well as English and Spanish. Its quarterly newsletter, Honey Bee, is
based on the philosophy that exchanging knowledge can benefit both the source and the
community, just as a bee taking pollen from a flower in no way diminishes it.

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 Rural Entrepreneurship
Entrepreneurship Development Division

Objectives

 Generating "self employment" and to develop the spirit of self reliance among the
S&T personals with special reference to youths & rural masses
 Creating awareness among S&T persons, motivating them to choose
entrepreneurship as a career and to provide support in establishing them over SSI
units.

As per the national policy eradicating poverty & removal of drudgery, GOI has launched
Entrepreneurship Development Programmes under guidance and assistance of National
Science & Technology Entrepreneurship Development Board (NSTEDB), Department of
Science & Technology, Government of India, New Delhi.

Activities:

To achieve the goal various programmes are organised as follows:-

 Entrepreneurship Development Programme (EDP)

 Skill Development Programme

 Rural Entrpeneurship Developemnt Programme

 Entrepreneurship Awareness Camps (EAC)

 Entrepreneurship Motivation Camps (EMC)

It is held in various districts of state through Head Quarter, located at Jaipur and its
regional offices functioning at Jodhpur, Bikaner, Udaipur, Kota and Ajmer.

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 Rural Entrepreneurship

RURAL ENTREPRENEURSHIP DEVELOPMENT

PROGRAMME (REDP)

INTRODUCTION

Promotion of Non-Farm Sector in rural areas is one of the thrust areas of

NABARD. Over the years, NABARD has evolved and experimented a number of
promotional programmes for development of Rural Non-Farm Sector. Rural
Entrepreneurship Development Programme (REDP) is one of the important
promotional programmes supported by NABARD for diversification of village
industries with a focus on creating sustainable employment and income
opportunities in a cost effective manner for the benefit of educated unemployed
rural youth. NABARD has been, for more 13 years, supporting selected voluntary
agencies/ non-governmental organisation (VAs/ NGOs) for implementing REDPs.

OBJECTIVE

Developing entrepreneurial and activity-oriented skills among unemployed rural

youth by assisting Voluntary Agencies (VAs)/ Non-Governmental Organisations
(NGOs)/ Development Agencies (DAs) with good track record to conduct REDP,
for those willing to set up small/ micro-enterprises.

EXPERIMENTAL PHASE

REDPs were supported by NABARD, on an experimental basis, to test the

following hypothesis:

REDPs could motivate the potential entrepreneurs and instill in them confidence
to start new enterprises in rural areas. The entrepreneurs would be facilitated to

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 Rural Entrepreneurship
avail of credit assistance from the banks and support services from the
development agencies. The enterprises would also contribute towards income and
employment opportunities for their household and many others, directly or
indirectly. Creation of competent entrepreneurs who catalyse local resources to
establish and manage viable ventures in the rural areas may lead to empowerment
of rural youth both men and women.

REDP has since passed the experimental stage and proved to be an effective tool
in creating enterprises and job opportunities in the rural areas.

FEATURES AND COVERAGE

REDP comprises of 3 distinct phases, viz., pre-training, training and post-training

phase. The success of the programme depends on the strict adherence to these
phases.

i) Pre-training

Detailed survey for identifying potential business activities/ market Publicity,

awareness creation and motivational campaign Coordination with various
agencies - especially banks, Govt. Dept.. Formation of Selection Committee,
Project Monitoring Committee Selection of trainees

ii) Training

The duration of the programme is 6-8 weeks Usually 25-30 trainees in a batch
Training module comprises of : Achievement motivation Opportunity
identification and guidance Knowledge on supporting agencies and schemes
Preparation of project reports/profiles Management of resource (men, material,
money) Marketing aspects Book-keeping/Accounting In case of technical/ activity
based REDPs, inputs on technical aspects/ skill development/appropriate
technology. case-studies on potential activities, field visits, practical work, visit to
successful units, etc., to be the integral part of training programme.

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 Rural Entrepreneurship

iii) Post-training

Escort services to trainees for atleast two years for credit linkages for setting up
units, which would be a major parameter of success rate, constant follow-up/
monitoring of trainees and their units, assist them in preparing project report for
obtaining bank loan, liaising with various agencies to assist the trainees in setting
up units, etc.

FACILITIES REQUIRED FOR CONDUCTING REDPs

training venue/ class rooms ( own or hired ) training equipment like OHP, slide
projector, television, VCR, PCs, etc. hostel facility for trainees from far flung
areas trainer motivator/ faculty for co-ordinating/ taking classes skilled trainer and
workshop to impart skill development programmes

ELIGIBLE INSTITUTIONS

NABARD provides promotional assistance to capable agencies with good track

record and professional competence to successfully implement REDPs. The
agency should satisfy the following broad criteria:

It should be a legal entity. Its officials should not be the office bearers of any
political party/ or elected members of any legislative body. It should have been
working in rural areas, atleast, for three years. It should have necessary
professional and organisational competence to plan, execute and monitor REDPs.
It should have exclusive trained and qualified trainer-cum-motivator as a
permanent employee. It should have the required minimum training infrastructure
to conduct the programme effectively. It should have good rapport with banks,
local administration/ people and possess grass-root level linkage. It should be
prepared to conduct REDPs in the approved manner so as to achieve good success
rate.

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 Rural Entrepreneurship

RECENT INITIATIVES IN REDP

With a view to accelerate the process of REDP and to achieve the desired
objective at a faster pace, NABARD had initiated the following steps;

Institutionalization of REDP

In order to have a focused direction in the implementation of REDP, NABARD

has decided to forge long term collaboration with 3 or 4 selected VAs / NGOs in
each state.

Technical REDPs

With a view to ensure setting up of units as well as their successful management,

it has been decided to encourage Technical / activity based REDP. Consequently,
select ITIs have also been included as eligible institution for conducting REDPs.

Incentive based REDPs

To ensure continued follow-up/ monitoring and escort services to the trainees

with a view that all the trainees end up in establishing their own units, an
incentive scheme has been evolved whereby the REDP implementing agencies
will be suitably rewarded with cash incentives based on the number of trainees
setting up their own units, preferably with bank loan.

NABARD has urged its Regional Offices to concentrate more on incentive based
REDPs and Activity specific REDPs. The Focus of NABARD would be to
achieve at least 80% success rate in the REDPs conducted with its assistance.

Participation fees

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 Rural Entrepreneurship
For ensuring total involvement/ commitment of the participants of REDP, the
implementing agencies are permitted to charge a nominal fee from the trainees in
addition to the grants given by NABARD.

FINANCIAL ASSISTANCE - COMPONENTS

NABARD provides promotional assistance to select agencies to meet the

recurring expenditure in conducting REDPs. Under institutionalization of REDP,
the select institutions are provided with need-based capacity building support and
long-term assurance by way of continued financial assistance, for conducting
REDPs. Some of the major items that are covered under our grant assistance
include:

1. Cost of pre training survey

2. Publicity
3. Selection of candidates
4. Inauguration and valediction
5. Rent for training hall
6. Reading material for trainees
7. stationery, tool kit
8. Stipend in exceptional cases
9. Raw material
10. Hire charges, electricity charges
11. Honorarium for trainer-motivator, guest faculty, coordinator
12. Exposure visit of trainees
13. Overhead cost
14. Expenditure on follow up/escort services.

PROGRESS AND IMPACT

The high degree of success in terms of setting up of new units, creation of

employment and generation of income on a sustainable basis has prompted
NABARD to adopt a comprehensive strategy to train one lakh potential

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 Rural Entrepreneurship
entrepreneurs under REDPs over a period of five years (1999-2000 to 2003-
2004). This strategy involves institutionalization of REDPs through selection of
reputed institutions and committing long term support to them for facilitating
qualitative and quantitative expansion of the REDPs. During the year 2003-04,
1,216 REDPs were sanctioned with a grant support of Rs.5.63 crore covering
31,319 educated unemployed rural youth. As of March 2004, a total of 5,465
REDPs were supported by NABARD with financial assistance of Rs 23 crore
covering 1.51 lakh rural youth. Of these, over 3,900 programmes were sanctioned
during the last five years providing training to more than one lakh rural youths.

In order to strengthen the monitoring mechanism an on the spot evaluation of the

training has been introduced . The DDM/ designated officer of the RO would
undertake the evaluation during the last week of the training which would rate the
efficacy of the agency in conducting REDPs.

A booklet showcasing the success achieved through the REDPs supported by

NABARD was also brought out during the year. These stories relate to various
trainees who had been successful in their life after undergoing training in REDPs
conducted by various agencies all over the country.

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 Rural Entrepreneurship

Case Example
Dr. Anand Karve
Dr Anand Karve, winner of the Ashden Award for Renewable Energy, has developed
ways of harnessing agro-waste into fuel. Karve heads the Appropriate Rural Technology
Institute which has developed pioneering seed and irrigation techniques to help farmers

Dr Anand Karve's Appropriate Rural Technology Institute (ARTI) has no intention of

sending a mission to Mars, which is probably why it will never make the headlines in the
mainstream media. But Karve's dedication to rural development has recently won him the
Ashden Award for Renewable Energy.

Karve got the award for his remarkable breakthrough in converting sugarcane leaves,
generally thrown away or burned after harvest, into fuel.

A sprightly 65-year-old scientist, Karve has a PhD in botany from a German university.
He, and a few other like-minded scientists and technicians, founded ARTI in April 1996
at an age when most people are settling down to lead a `retired' life.

ARTI started with the objective of `developing, popularising and commercialising

innovative rural technologies' to improve the quality of life and standard of living of the
rural residents of India. "If people have enough employment opportunities in rural areas
why would they migrate to the cities?" Karve asks.

ARTI's record is impressive. Besides developing renewable energy resources from

agricultural waste, it has pioneered nursery techniques to make seeds develop faster, and
helped farmers tackle adverse weather conditions. Says Karve: "Farmers lose out on
valuable time if they start sowing operations after the monsoon season settles in. If they
can sow the seeds in a nursery before the monsoon starts and transplant them once the

41
 Rural Entrepreneurship
season is in full swing, they can enhance their produce significantly." ARTI has also
developed low-cost, high-humidity chambers to allow seeds to grow better.

The institute has a plant tissue culture laboratory and has constructed a roofless
greenhouse at 1/10th the cost of a conventional greenhouse. It has developed a drip-
irrigation technique that prevents water wastage and a transportable wheelbarrow, a low-
cost water tank and a bakery -- all with the sole purpose of helping villagers.

But it was Karve's work in developing fuel from sugarcane waste that won him accolades
and the Ashden Award. The idea took root when Karve's daughter, Priyadarshini, was
looking out for a subject for her Master's thesis. She tried converting sugarcane leaves
into charcoal and Karve immediately saw the enormous potential in the idea.
Dr Anand Karve's Appropriate Rural Technology Institute (ARTI) has no intention of
sending a mission to Mars, which is probably why it will never make the headlines in the
mainstream media. But Karve's dedication to rural development has recently won him the
Ashden Award for Renewable Energy.

Karve got the award for his remarkable breakthrough in converting sugarcane leaves,
generally thrown away or burned after harvest, into fuel.

A sprightly 65-year-old scientist, Karve has a PhD in botany from a German university.
He, and a few other like-minded scientists and technicians, founded ARTI in April 1996
at an age when most people are settling down to lead a `retired' life.

ARTI started with the objective of `developing, popularising and commercialising

innovative rural technologies' to improve the quality of life and standard of living of the
rural residents of India. "If people have enough employment opportunities in rural areas
why would they migrate to the cities?" Karve asks.

ARTI's record is impressive. Besides developing renewable energy resources from

agricultural waste, it has pioneered nursery techniques to make seeds develop faster, and
helped farmers tackle adverse weather conditions. Says Karve: "Farmers lose out on
valuable time if they start sowing operations after the monsoon season settles in. If they

42
 Rural Entrepreneurship
can sow the seeds in a nursery before the monsoon starts and transplant them once the
season is in full swing, they can enhance their produce significantly." ARTI has also
developed low-cost, high-humidity chambers to allow seeds to grow better.

The institute has a plant tissue culture laboratory and has constructed a roofless
greenhouse at 1/10th the cost of a conventional greenhouse. It has developed a drip-
irrigation technique that prevents water wastage and a transportable wheelbarrow, a low-
cost water tank and a bakery -- all with the sole purpose of helping villagers.

But it was Karve's work in developing fuel from sugarcane waste that won him accolades
and the Ashden Award. The idea took root when Karve's daughter, Priyadarshini, was
looking out for a subject for her Master's thesis. She tried converting sugarcane leaves
into charcoal and Karve immediately saw the enormous potential in the idea.
Initially Karve didn't meet with much success. But when he put the leaves into a retort, or
a container with a lid, where they were starved of oxygen, he was able to come up with
charcoal.

Thus Karve found use for the 4.5 million-odd tonnes of sugarcane leaves in Maharashtra.
"These leaves have no nutritional value and are difficult to decompose. So they are
simply burned and this causes pollution," he says. Karve set up a kiln to char the leaves
and convert them into smoke-free char briquettes that could be used as a fuel in rural as
well as urban homes.

Besides drastically reducing the fuel costs of an average urban family, producing char
briquettes also earns the family an additional income.

Dr Karve is enthusiastic about the Indian government's decision to introduce Gasohol, a

five per cent blend of ethanol and petrol. Ethanol can be extracted from sugarcane. "Now
the government should increase the percentage of ethanol in petrol and also allow the use
of the sugarcane crop in making ethanol," he says.

Karve thinks methane is a better fuel option. Like ethanol, it can be extracted from
agricultural waste and its calorific value is higher than that of liquefied petroleum gas.

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Karve's journey has not always been smooth. He has had to face his share of social
problems. For instance, when he sought the help of the scavenger caste to collect leaves
for money, their leader flatly refused. "You educate your children in the best of schools
and colleges and want our children to remain scavengers?" said the man.

Dr Karve, grandson of the legendary social reformer Maharishi Dhondo Keshav Karve,
has learnt to work around these social pitfalls. His work in rural areas is designed to open
a new chapter in rural entrepreneurship, a move that will not only boost rural incomes but
will also discourage the rural poor from migrating to urban slums.

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Soichrio Honda

On 5 August 1991, Soichiro Honda died at the age of 84. At the time of his death, Mr.
Honda, who retired from Honda Motor Company in 1973, held the title of Supreme
Advisor. Mr. Honda's life had a lot to say about the real 'entrepreneur'.

Honda was the son of a blacksmith and saw his first car as an 8 year old boy when a
Model-T Ford rumbled into his home town in central Japan.

Honda's biography quotes him as saying the following in recalling his first encounter
with an automobile:

"It was the first car I saw. What a thrill. Oil dropped when it came to a halt. How nice the
smell was. I put down my nose to the ground like a dog and sniffed it. I smeared my
hands with the oil and deeply inhaled the smell. It was then I dreamed of manufacturing a
car myself some day."

Honda started as a successful mechanic, founded a piston ring manufacturing concern

while attending school and then started what later became Honda Motor Company.
Originally it attached recycled engines to bicycles, a popular mode of transportation in
the years following World War II. His first motorcycle called 'Dream' was introduced in
1949.

Honda is said to have been more at home on the factory floor than in the boardroom,
preferring overalls to business suits. He placed great faith in the young technicians of his
many factories and laboratories. He often wore wild colours, explaining that unless
inventors and artists "have the courage and determination to break with established
ideas, they cannot expect to do a good job."

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Soichiro Honda was an entrepreneur. Too often we confuse entrepreneurship with
business or doing business. The two simply are not the same, as John J. Kao of the
Harvard Business School points out in his recent book titled The Entrepreneurial
Organization.

He says that entrepreneurship has nothing to do with the setting. Simply stated,
entrepreneurship is the process of opportunity recognition and implementation. It often
begins with a vision or idea for a product or process coupled with a passion or zeal to
make that idea a reality. Yes, entrepreneurship is fundamentally less about technical skills
than about people and their passions.

Successful entrepreneurship is hard work carried out in an unpredictable environment. It

requires a blend of calculation and luck laced with the ever present possibility of failure.
Emerging industries in some ways resemble a casino where a range of bets are placed on
different strategies, people and approaches.

Just as Honda placed great faith in his young technicians, successful entrepreneurs
understand that the three principles of entrepreneurship are people, people, people.
Entrepreneurs find leverage through others to amplify their visions. They manage
effectively in dealing with the ambiguity and uncertainty that surround the creation of an
idea and the organizational vehicle developed around it. In short, they are risk takers.

In finding entrepreneurs and seeking out opportunities for entrepreneurship, we have to

take care not to make unfounded assumptions based on conventional wisdom. We will
talk about patterns that tend to distinguish the mind set and behaviour of entrepreneurs
from others, much of what runs into an entrepreneurial success is unpredictable.

Some Other Examples

 Some thought Albert Einstein was mentally retarded and fit for little, simply
because he never combed his hair or wore socks. You cannot tell an
entrepreneur by the way he or she dresses.

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 Colonel Sanders, founder of Kentucky Fried Chicken, was judged to be too
old to start a business. Entrepreneurship is possible at any age.

 The Wright Brothers knew no one had ever flown before, but they did it
anyway. Entrepreneurs frequently make what seems impossible, possible.

 Florence Chadwick knew other swimmers had died crossing the English
channel. Entrepreneurs may flirt with danger to achieve their visions.

 Henry Ford faced a lack of demand for his autos. Entrepreneurs must often
create the demand for their products and/or services.

 Finally David was considered too young, unskilled and poorly equipped to
face Goliath. Entrepreneurship is a lot more about inner drive than outward
trappings and appearances.

The point is that entrepreneurship is usually about very determined people, people who
make their own circumstances and breaks and succeed.

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Articles

India: Helping Rural Entrepreneurs through KVIC

The Government has been implementing the Rural Employment Generation Programme
(REGP), through the Khadi and Village Industries Commission (KVIC), to help eligible
entrepreneurs to set up village industry units and create employment opportunities in
villages and small towns with population upto 20,000 throughout the country.

Under this programme, entrepreneurs can establish village industries by availing of

margin money assistance from the KVIC and loans from public sector scheduled
commercial banks, selected regional rural banks, cooperative banks, etc. for projects with
a maximum cost of Rs.25 lakh.

The margin money assistance provided by the Government through the KVIC for setting
up village industry projects under REGP in the country during 2005-06 was Rs.33,
082.75 lakh.

This information was given by the Minister of Small Scale Industries and Agro & Rural
Industries, Shri Mahabir Prasad in a written reply to a question in Rajya Sabha.

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EBay India Motors empowers rural entrepreneurs by announcing its

foray into the tractor segment
eBay India Motors Marketplace, the leading online B2B Motors marketplace, announced
a significant milestone achieved by the sale of the 100,000th vehicle on the eBay India
Motors platform. Mr. Rajan Mehra, Country Manager, New Ventures & Payments, eBay
India, today commemorated the occasion by felicitating the Delhi-based buyer and seller
who completed this landmark transaction. Mr. Rana Rekhi of Rana Motors sold a 1996
model Maruti 800 to Mr. Anil Sethi of Sethi Motors on September 23, 2006.

At the occasion, eBay India Motors announced its foray into the fast growing tractor
segment, aimed at targeting rural entrepreneurs by providing them with a liquid
marketplace and access to a large inventory of vehicles and a wide network of dealers to
trade with across geographies. The unique Motors B2B marketplace addresses a Rs. 9000
crore market opportunity.

Addressing the conference, Mr. Rajan Mehra, Country Manager, New Ventures &
Payments, eBay India said, "We are proud to announce the sale of the milestone
100,000th vehicle as it connotes the strong dealer network and a wide reach that the
platform has been able to garner with time. We would like to take this opportunity to
thank all our dealers for their continued support and trust in us."

Mr. Mehra elaborated, "In a fragmented market like India, we have been successful in
addressing the needs of the corporates and dealers. We plan to extend our platform to the
tractors segment to further grow our reach and empower the rural entrepreneurs. This is
in keeping with the larger eBay purpose of empowering entrepreneurs around the world."

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eBay Motors has been successful in addressing the inefficiencies existing in the market
by creating a transparent and liquid wholesale market. The growth has been manifested
by the response from the B&C cities, which forms a large percentage of the 6000 pre
approved dealer network spread across 125 towns and cities in India. Over 50
institutional sellers sell Commercial Vehicles, 4 wheelers and 2 wheelers. On any given
day, 450 vehicles are auctioned and a vehicle sells ever 8 minutes.

eBay India Motors provides free training to interested dealers through eBay Motors
Academy, conducted across India. The academy comprises of buyer-training programs to

inform the participants about the opportunity, benefits & processes of buying on eBay
India. In addition, there is phone based training and even regional language online
animated tutorials in Hindi, Malayalam, Tamil & Bengali.

Private Sector asked to help rural entrepreneurs

THE Government called upon the private sector to extend its technical know-how to rural

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entrepreneurs in evolving an effective mechanism of designing, finishing and marketing
products.

At a seminar organized by the Confederation of Indian Industry (CII), Ms Tinoo Joshi,

Development Commissioner - Handicrafts, talked about the need for corporate sector to
update the Government on various aspects of value addition and supply market
information.

The Government is trying to come up with visible places which can be accessed by
buyers and which could act as an access mode by the market itself for handlooms and
handicrafts, she added.

Meanwhile, Mr Subash Pani, Development Commissioner - Handlooms, pointed out that

in this sector, the marketing channel between the producer and the consumer is non-
existent. So, the capacity of the artisans to imbibe new technologies was below the level
of sustenance.

Rural renewal: can entrepreneurs help boost small-town economies?

While the national labor force grew nearly 10 percent from 1994 to 200l, the work force
in Hastings, Nebraska, (population 24,000) shrank by 3 percent. That's a situation

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common in many small towns and rural areas, especially in the Upper Midwest, where
populations are falling, jobs are evaporating and new businesses are weary about starting.

Allen Harpham founded Computer Consultants of Hastings Inc. in 1992 and has watched
smaller towns in his area depopulate as residents move to cities or even out of state to
find greater opportunity. "The communities with a thousand people or less are
struggling," says the employer of three.

Harpham, 42, lays some blame on state and local government policies, which have closed
small-town schools to cut costs while failing to give meaningful assistance to small
businesses. But access to broader markets via the internet has helped local entrepreneurs
start and stay in business, says Harpham. "I'd say we're holding our own."

That long-playing scenario may be changing, however, as interest in rural

entrepreneurship grips Main Street America. Applying new approaches ranging from
publicly funded startup consulting services to angel investor introduction networks, small
towns, states and the federal government are turning rural economic development away
from attempts to lure big employers and toward cultivating homegrown businesses

Back rural entrepreneurs, banks told

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THE Union Minister of Rural Development, Dr Raghuvansh Prasad Singh, on Thursday

called upon the banking industry in the country to bolster rural entrepreneurship to
generate income and employment for the rural people, taking advantage of the freedom
provided to the nationalised banks in their operations.

The Minister was launching a monthly magazine Business Rural India (BRI), jointly
produced by the Council for Advancement of People's Action and Rural Technology
(CAPART) and the Society for Advancement of Village Economy (SAVE).

He said that when car loans and housing loans are being disbursed at relatively easier
terms, the banks could, using the operational freedom conferred upon them recently, eye
rural entrepreneurs to help them build up permanent assets and employment. This would
help them get purchasing power to spend on the goods and services of the rest of the
economy. He asked public sector banks to assist rural enterprises in their market-related
activities by providing soft loans.

MNCs should first assist in income-generation and employment promotion activities in

rural India by helping rural products get popularised before they resolve to focus their
products into the vast rural markets of India, the Minister said. This way, he said, the
MNCs should help increase the rural purchasing power through promoting rural
entrepreneurs and their products

In their remarks, the Ministers of State for Rural Development, Mr A. Narendra and Ms
Suryakanta Patil, laid emphasis on the untapped potentialof the rural markets and the

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need for the financial institutions in the country to assist the rural enterprise. They said
the launch of a magazine exclusively for the rural business was timely.

The Rural Development Secretary, Mr M. Shankar, lauded the effort as having the
potential to be a path-breaker. He said that through this move, the rural financial and
production scenario and its potential and challenges would be highlighted to benefit the
rural regions.

The Director General of CAPART, Mr L. V. Saptharishi, said that with big corporates
entering rural areas with both fast-moving consumer goods and other products, rural
producers generally would lose out because of the lack of economies of scale, technology
and entrepreneurial abilities.

Hence, he said, the new journal would focus on and strengthen the huge potential of rural
producers and provide them with avenues to reap benefits from corporatisation of rural
business and expand their own markets.

Idea launches shared access service for rural entrepreneurs

Rural boon

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Rural entrepreneurs can sell airtime on their mobile phones to people in the community
wishing to make a call or send a text message

Idea Cellular Ltd has launched its shared access (voice & data) programme for rural India
along with the GSM Association (GSMA), the global trade association for mobile phone
operators.

A press release said Idea has launched the service in Maharashtra for the first time after a
successful trial in the State, and it is slated for launch across all Idea circles shortly.

`Shared access', refers to the sharing of a mobile telecommunication device. This model
extends the accessibility of communication whilst creating a new revenue stream for low-
income rural entrepreneurs who own the mobile phone. Rural entrepreneurs can sell
airtime on their mobile phones to people in the community wishing to make a call or send
a text message, the release said.

This approach allows the entrepreneur to set up a payphone business for just the cost of a
handset. Specially devised software with a printer will be developed to enable the owner
of the mobile handset to provide a bill if required by the customer making the call.

Call charges are also displayed on the handset to ensure transparency in the transaction.
Additionally, Idea will offer shared Internet access in these rural communities to provide
an even broader range of data services, the release added.

"The GSM Association is supporting this launch by Idea Cellular, as well as other shared
voice and data initiatives, because we believe this concept is the best way to bring the
many benefits of mobile communications and Internet access to people who can't afford
their own handset or computer," said Mr Rob Conway, CEO of the GSM Association, the
global trade association for mobile operators.

"Our hope is that shared voice and shared data services will spread across India and other
developing countries, providing major social and economic benefits to rural communities
that have had limited access to telecommunications."

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Avishkaar India keen on funding rural entrepreneurs

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A venture capital fund with a difference. Quite removed from the world of IT start-ups,
Aavishkaar India Micro Venture Capital Fund or Aavishkaar India concerns itself with
rural enterprises and grassroots innovations that have the potential to improve the quality
of life in the interiors of the country.

It hopes to do so by encouraging and supporting the rural entrepreneur who may have a
workable idea or invention, but not the funds to turn it into a marketable proposition.

Set up by a couple of NRIs in 2002, this `for-profit' venture capital fund has so far
invested over Rs 26 lakh in two basic technology projects. The first, a Rs 18-lakh
($36,000) equity investment in the Gujarat-based Shri Kamdhenu Electronics Pvt Ltd,
helped it pick up a 26 per cent stake in the company, which has developed an automatic
milk collection system and a milk analyser for dairy co-operatives.

The second investment of Rs 8.81 lakh ($17,620) saw it pick up a 49 per cent stake in the
Chennai-based Servals Automation Private Ltd, which has developed and distributed an
energy efficient burner and a water-conserving rain gun irrigation product.

Explaining the equity investments made in these companies, Mr Roy Dias, a trustee with
the fund, said small, grassroots ventures often did not have the finances to pay the
collateral required to draw a bank loan. It was, therefore, necessary to pick a stake in the
companies or extend funds through the growth phase.

The fund targets an ownership of 26 per cent or more with a holding period of five years
through such equity and quasi-equity investments in micro ventures. It has pegged its
investments at $20,000-$100,000 in order to achieve a diversified portfolio by limiting
the maximum amount of any single investment to 20 per cent of the corpus fund.

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He added that unlike many organisations with a social upliftment agenda, Aavishkaar
India was a `for-profit' fund, which was expected to instil a measure of accountability in
the fund's administration, while at the same time involving its managers in the day-to-day
operations of the fund.

With no links to Government or institutional funding, the organisation hopes to source

funds from the two Singapore-based founders, Mr V. Anantha-Nageswaran and Mr
Arvind Singh, and their global network of friends. It has raised Rs 1 crore so far and has
targeted a fund size of $2 million or Rs 10 crore in 10 years.

Both Mr Nageswaran, who is an investment banker with Credit Suisse, and Mr Arvind
Singh, who is an ex-banker, graduated from IIM Ahmedabad in the 1980s.

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Rural entrepreneur tastes success in value addition

Nutritious banana figs produced by dehydrating the fruit in a trial-and-error method over
three years
A young rural entrepreneur has tasted success in adding value to banana, grown in large
quantities in Tiruchi district, by dehydrating the fruit in a trial-and-error method over a
three-year period. The toil of T. Mariappan, a traditional banana grower of Seelapillayar
Puthur near Kattuputhur, one of the prominent banana belts, resulted in tasty and
nutritious banana figs (dehydrated banana) sans preservatives. The product has a shelf
life of six months, and the National Research Centre for Banana has acknowledged the
success of the result.

Mr. Mariappan designed a banana dehydrator himself that works on the simple principle
of hot air oven, normally adopted in bakeries. The total removal of aqua content through
electrical process from the fruits makes the product tasty, he says, explaining that the
high quantum of water in normal banana acts as a ready solvent for its sugar. When
dehydrated completely, the produce is in its sweetest form, acting as a healthy substitute
for chocolates for children. It could also be used as a dessert.

Although any variety of banana could be dehydrated, he had restricted his methodology
to just two varieties — `nei poovan' and `karpuravalli' - which he cultivates in his fields,
throughout the year.

Mr. Mariappan is confident that the trade will soon develop into a cottage industry as
Indian Overseas Bank, under the District Rural Industries Programme (DRIP)
programme, has sanctioned Rs. 11 lakh for his project, which includes a subsidy
component of Rs. 2.80 lakh from the KVIC.

Under the first phase, he has already obtained a loan of Rs. three lakhs. The display of the
product at the exhibitions conducted by the National Research Centre for Banana
(NRCB) at different places across the state popularised the product.

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His year-long research and development work and the feedback from the customers have
gone a long way in making some improvements in manufacturing techniques. He is now
marketing the produce in 400-kg packs and in sachets. His immediate future plan is to use
a solar energy-operated dehydrator for large-scale production. The National Institute of
Technology, Tiruchi, has agreed to design the drier.

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Conclusion

In conclusion, finding, encouraging and motivating entrepreneurs in rural areas is not an

easy proposition. However, to the real entrepreneur looking on the dark side of the
situation is fatal. Optimism is the heart and soul of the entrepreneur. While strategic
planning, feasibility and market studies and analysis are necessary parts of new business
start-ups, very few real entrepreneurs, the famous and not so famous, waited for a
printout to see whether they should launch their new idea. We are going to have to be
more entrepreneurial ourselves.

The environment has changed and we must change with it. We cannot be like the frog.
You can put a frog in a pot of hot water and that frog will not notice the temperature rise.
We must all guard against this tendency; we cannot ignore the changes occurring in our
environment. If we do, we shall wake up and find out that we have been boiled.

"I have this dream and I want to see it come true. And I will not give up. To achieve a
goal you have got to be a gambler, you have got to be certain you can do it. As soon as
you start hesitating, doubting yourself, you'd better just give up. I am always sure of
myself and people. I am sure we'll make if".

These are the words of entrepreneurship, dreams, determination, willingness to take risks.
Those of us in the business of identifying and 'developing' entrepreneurs in rural areas
must build our programmes upon these human traits associated with successful change.

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