Central Data Catalog

Citation Information

Type Working Paper - MPRA
Title Role of rural business incubators in translating micro finance to sustainable micro enterprises
Author(s)
Publication (Day/Month/Year) 2010
URL http://mpra.ub.uni-muenchen.de/27381/1/MPRA_paper_27381.pdf
Abstract

R
OLE OF
R
URAL
B
USINESS
I
NCUBATORS IN TRANSLATING
M
ICRO
F
INANCE
TO SUSTAINABLE MICRO ENTERPRISES
Present paper looks at how Rural Business Incubators (RBIs)
& Enterprise Resource Centers
(ERCs) together with Micro Finance Institutions (MFIs)
can contribute to inclusive growth.
India’s informal sector has a very powerful presence of b
rilliant entrepreneurs, who can
potentially contribute to India’s fight against poverty a
nd have the potential for much more
employment & income generation, if appropriate instit
utional mechanisms are created to provide
needed & timely assistance. Here comes the role of RBIs &
ERCs and MFIs.
Approximately 93 percent of the enterprises are in the
informal sector in India. Together with
Micro, Small & Medium Enterprises (MSMEs), informal sect
or contributes close to 60 percent to
GDP and 40 percent or more to export trade. They creat
e 95 percent of non-farm jobs. Informal
enterprises are set-up by owners to alleviate their pove
rty condition. They could be termed as
poverty alleviating enterprises (PAEs). Micro finance inst
itutions need to reach out to such PAEs
and empower them. Through the institutional mechanism
called RBIs & ERCs, micro financiers
can reach out to PAEs.
Empowering PAEs and enabling their growth is indeed a
challenging task. An institutional
mechanism like RBI & ERC is a probable solution to pove
rty and unemployment. If an incubator
& ERC can come up in each of the 6000 block panchayats, th
at would enable the creation of
new enterprises in the formal sector as well as can con
tribute to empower PAEs in their growth
& expansion. This would help create new jobs and allevia
te poverty and generate employment.
The paper ends with a
model RBI & ERC
. with a detailed description of service mix that can be
delivered through this institutional mechanism.

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