Promoting Village based BDS Providers in India 040309


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Promoting Village based BDS Providers in India 040309

  1. 1. Promoting Village based BDS Providers in India - Towards promotion and strengthening of micro Enterprises - Jitesh Panda1 In rural India, micro Enterprises contribute significantly towards ensuring sustainable livelihood of poor and marginalized families. Micro enterprises refer to small business activities like trading, processing and services, which could be individual, family, or group based. Such enterprises generally relate to demand & supply (of products and services) and resource base (natural & human) at village level. These enterprises are generally associated with low investment and very high involvement of the entrepreneurs. Micro enterprises generally provide higher and sustainable (often disaster proof) income through different value addition propositions like aggregation and processing. Self employment opportunity through micro Enterprises also inculcates self esteem at the family level. However, despite best of the efforts by livelihood promoting organizations, it has not been easy for the poor and marginalized families to be at the forefront of owning and managing micro Enterprises. Business Development Support (BDS) refers to different support services i.e. both information and linkage; related to promotion and strengthening of an enterprise. It includes services related to credit, marketing, inputs, equipment, technology, product development. It is observed that, as the enterprise grows in size, (from small to medium and large), there is some access to BDS services. It is mainly because large enterprises have buying capacity for BDS services. Micro Enterprises generally do not have access to formal & systematic BDS services. Nevertheless, considering the volatility and vulnerability of micro Enterprises; and also low expertise of micro Entrepreneurs, access to BDS is critical for functioning of micro Enterprises. However, availability of BDS from micro Enterprises remains an issue. A close look at livelihood promotion efforts in villages, reveal that there has been some efforts towards facilitating credit services (with the limitation of appropriateness of credit products) to micro Enterprises. However, there has been hardly any formal effort by either Govt or Non Govt Organizations (NGOs) to facilitate BDS to micro Enterprises. Micro Enterprises continue to access BDS from informal sources. Informal sources of BDS include landlord, progressive farmers and small scale traders, who generally have vested interest linking to their own business. Village level Govt Agril/Allied Extension Workers are only able to provide limited support with regards to productivity enhancement. They lack orientation and skill related to BDS. 1 Vrutti Livelihoods Resource Centre – part of Catalyst Group 1st Cross, 1st Main, Aswath Nagar, RMV 2nd Stage, Bangalore – 560 094, India
  2. 2. There has always been a concern that despite best of the efforts through Rural Livelihood Projects/Schemes; inclusive livelihood promotion continues to be a dream. However, if we take a close look at livelihood promotion efforts at village level, we may realize that there is near absence of BDS focusing on micro Enterprises. Micro Enterprise Development is not adequately focused either under purview of rural development (focus being on wage employment) nor focused under the promotion of industries. There is an urgent need to promote a cadre of BDS providers in rural India. Unlike BDS for large enterprises i.e. more information oriented, in case of micro Enterprises it goes beyond just information, and move towards close facilitation. BDS for micro Enterprises may best be provided by upgrading some of the existing informal BDS providers (reducing their vested interest), building capacity of existing extension workers or creating a new cadre of BDS providers. At this juncture, it is very difficult to say, the form of BDS providers that would work in the interest of micro Entrepreneurs and their micro Enterprises. This may vary with area and may relate to profile of micro Entrepreneurs/ micro enterprises. Nevertheless, there is no option but an urgent need to experiment and develop BDS Provider Models for micro Enterprises that serves the interest of poor and marginalized families. This would fill critical gap and supplement/complement on going efforts towards inclusive livelihood promotion in India. In India, Civil Society Organizations (CSOs) supported by Corporate Foundations, International NGOs, Bilateral & Multilateral Projects have always been at the forefront of developing Livelihood Promotion Approaches and Models, be it Self Help Group, Participatory Watershed Development, Community Forestry or Participatory Irrigation Management. These models have later been mainstreamed in regular schemes of Govt. It is desirable that similar efforts are pursed with regards to micro Enterprise Development through Village Based BDS providers. Such an effort towards developing models requires expertise in social mobilisation and business management.