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Financial and Institutional Support for Rural Start-ups

  • Categories
    Yojana/Kurukshetra
  • Published
    16th Dec, 2020
  • Agriculture and allied activities are the mainstay of rural India and, around 67 percent of Indian population resides in rural areas. While the contribution of the agricultural sector to GDP has continued to decline over the last 2 decades - from 29 percent in 1990 to 16 percent in FY 2018-19 - it remains a major source of employment, accounting for about 47 percent of the total national workforce.
  • A Start-up ecosystem is formed by people, start-ups in their various stages and various types of organisations in a location (physical or virtual), interacting as a system to create and scale new start-up companies.
  • These organisations can be further divided into categories such as universities, funding organizations, support organizations (like incubators, accelerators, co-working spaces etc.), research organizations, service provider organizations (legal, financial services etc.) and large corporations.

Rural Start-ups

  • NABVENTURES estimates that by 2020, more than 27 crore people in rural India will be active internet users. These rural internet users are driving the growth of rural start-ups.
  • Some of the emerging business models followed by rural start-ups include-
    • Agriculture: Agri/rural fintech lenders, Rapid soil health testing, etc.
    • Non-agriculture: Tech enabled rural healthcare, marketplace for sale of handicrafts, etc.
    • Rural e-commerce: Digital marketplace
    • Digital services
  • The rural start-up ecosystem suffers from the following challenges:
    • Lack of incubation centres
    • Lack of venture capital funds
    • Lack of bankable entrepreneurs
    • Scale up challenges
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