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. 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.