MICROFINANCE FOR RURAL ENTREPRENEURS - NOTES

MICROFINANCE FOR RURAL ENTREPRENEURS

     MEANING OF ENTREPRENEUR

“Entrepreneurs”, are people who create and grow enterprises. Entrepreneur is a person of very high aptitude who pioneers change, possessing characteristics found in only a very small fraction of the population. On the other extreme of definitions, anyone who wants to work for him or herself is considered to be an entrepreneur.

The word entrepreneur originates from the French word, ‘entreprendre’ which means "to undertake." In a business context, it means to start a business. The Merriam-Webster Dictionary presents the definition of an entrepreneur as one who organizes, manages, and assumes the risks of a business or enterprise.

RURAL ENTREPRENEURS

We have seen unemployment or under employment in the villages that has led to the migration of rural population to the cities. What is needed is to create a situation so that the migration from rural areas to urban areas comes down. Rather the situation should be such that people should find it worthwhile to shift themselves from sand town cities to rural areas because of realization of better opportunities there. In other words, migration from rural areas should not only get checked but overpopulated towns and cities should also get decongested. The question is, is it really possible? If it is so, ways can always be found out. The ways are,

·        Forcibly stopping villagers from settling in the slums of towns and cities,

·        Make use of all powers to clear the slums of the cities.

But such practices have not achieved the desired results in the past and the effects are,

·        Apart from causing suffering to the poor people and adding to the expenditure for the Government,

·        Social tensions and economic hardships created by the government officials and their    staff in every demolition of slums. Moreover,

·        When a slum is demolished people do not move out of urban locality.

·        They only relocate to a nearby place because they are entrenched in the economy of the town or city.

Though governments have tried out various schemes for generating incomes in the rural areas such government initiatives have not stopped people from moving out of villages to cities. This is because such government initiatives are not on their own capable of enabling people to earn adequately and ameliorate their conditions. There has to be some committed enterprising individual or a group of people

 

WHO MUST BE THE INITIATOR?

Who should be capable of making use of the government policies and schemes for the betterment of rural people? Some individuals who happen to be local leaders and NGOs and who are committed to the cause of the rural people have been catalytic agents for development. Though their efforts need to be recognized yet much more needs to be done to reverse the direction of movement of people, i.e. to attract people to the rural areas. It means not only stopping the outflow of rural people but also attracting them back from the towns and cities where they had migrated. This is possible when young people consider rural areas as places of opportunities. Despite all the inadequacies in rural areas one should assess their strengths and build on them to make rural areas places of opportunities. This is much to do with the way one sees the reality of the rural areas.

The way a survivor or a job seeker would see things would be certainly different from those who would like to do something worthwhile and are ready to go through a difficult path to achieve their goals. It isn't that there is a dearth of people with such mindset. But with time they change their minds and join the bandwagon of job seekers due to various compulsions. Enabling them to think positively, creatively and purposefully is utmost for the development of rural areas. Young people with such perspective and with the help of rightly channelized efforts would usher in an era of rural entrepreneurship. In this country successful rural entrepreneurs would solve many of the chronic problems within a short time.

To promote entrepreneurs who would take to rural entrepreneurship in utmost earnestness and sincerity is to ensure rural development.

·                 Enterprising people who prefer rural entrepreneurship may or may not themselves belong to rural areas.

·                 Entrepreneurs taking to rural entrepreneurship should not only set  up enterprises in rural areas but should be also using rural produce as raw  material and employing rural people in their production processes

·                 Rural entrepreneurship is, in essence, that entrepreneurship which ensures value addition to rural resources in rural areas engaging largely rural human resources.  In other words,

·                 Finished products are produced in rural areas out of resources obtained in rural areas by largely rural people.

 The entrepreneur may or may not be of rural origin. The entrepreneurs may be from anywhere, but their enterprises have to be located in a rural area, using mainly local resources both material as well as human. Also,

·        The enterprises have to be located in a rural area though it need not be actually using 100% local material and human resources.

·        Some amount of material and some people may be from urban cities.

·        Large portion of material used has to be locally produced and an appreciable number of people engaged in the production of finished goods should be people based or living in rural areas.

·        Unit set up by the government or a large company in a rural area could promote rural entrepreneurship depending on how much opportunities it throws up for entrepreneurs to use local resources, to fulfill the demands of such large units and the multiplier effect such large units create.

·        Any large unit coming up in rural areas more or less does have an impact in activating the surrounding economy for entrepreneurs to take advantage of.

·        This is precisely the reason why it is recommended to shift industries from urban centers to neighboring rural areas.

·        Such shifting initially may be a difficult proposition but in the long run beneficial in many ways and,

·        It would throw up lots of opportunities in the rural areas and result in decongestion of the urban centers.

·        Urban slums would start disappearing with large number of industries getting shifted to rural areas resulting in increasing opportunities in the rural areas.

·        Thus, both the rural as well as urban areas get benefited by setting up more industrial units in the rural areas, making rural areas attractive locations for investments.

TYPES OF RURAL ENTREPRENEURSHIP

Rural entrepreneurial activity can be broadly classified in four types such as:

·      Individual Entrepreneurship

          It is basically called proprietary i.e. single ownership of the enterprise.

·    Group Entrepreneurship

It mainly covers partnership, private limited company and public limited      company.

·    Cluster Formations

It covers NGOs*, VOs*, CBOs*, SHGs* and even networking of these groups.  These also cover formal and non-formal association of a group of individuals on the basis of caste, occupation, income, etc.

·  Co operatives

 It is an autonomous association of persons united voluntarily for a common objective. An entrepreneur has to decide on a particular type of entrepreneurship based on the various options available.”1

            

                                                                         Online, Rural Entrepreneurs: @Yahoo.Com

Constraints of Potential Rural Entrepreneurs and Development Inputs:

·        Low self-image and confidence. Motivational inputs, unfreezing and experience sharing by successful local entrepreneurs

·        No faith on others includes friends. Group building experiences.

·        No exposure to industry/business. Field visit to factories and big markets.

·        How to   contact for starting a venture, what formalities and procedures are to be followed? Information inputs on procedures and formalities.

·        How to know whether the identified business is a viable and sound proposition? Opportunity identification and guidance

·        .How to know whether the identified business is a viable and sound proposition? Market survey, project report preparation.

·        How does one carry out bank operations? Training in simple banking procedures like filing up deposit and withdrawal slip etc.

·        How to manage the business? Basic management orientation through simulation exercises.

·        How to read and write accounts? Functional and numerical literacy. Simple accounting in terms of writing income and expenditure.

·        Almost no technical skills Technical training (on-the-job training).