Rural Entrepreneurship: Meaning, Need, Problems, and Types

Meaning of Rural Entrepreneurship

Rural entrepreneurship is a term that relates to the establishment of new business units and industries in rural areas. It involves carrying out entrepreneurship activities in the rural economy which results in the overall development of the nation. Rural entrepreneurship has its root lying in non-urban areas and has a lot of potential for undertaking numerous endeavors in business, industry, agriculture, etc. Generally, industries and business enterprises in rural areas are involved in agriculture and its allied activities. These activities support the livelihood of the majority of the population living in rural areas. 

Rural entrepreneurship helps countries in achieving the equitable advancement and development of all areas. It serves as a key tool for overcoming all gaps in between urban and non-urban areas whether in terms of infrastructure, job opportunities, health, education etc. The similar growth and development opportunities are provided to the people of village as one available to peoples of cities. 

Need for Rural Entrepreneurship

The reasons for rural entrepreneurship can be well-understood from points discussed below: – 

  1. High potential of creating employment- Rural entrepreneurship brings in large number of employment opportunities for people living in rural areas. Industries in rural parts are mostly labor-intensive where many people are engaged in distinct activities both directly and indirectly. Rise in unemployment is one of the basic and most highlighted problem of every nation in today’s era. Rural entrepreneurship can be very effective in tackling this problem in positive way by bringing in more job opportunities for people. 
  2. Brings down income disparity- Rural industries possess a high potential of generating large amount of income for rural population. When people living in non-urban areas get equal opportunity for earning income as similar to one living in urban areas, the disparities in income earned gets reduced. Establishment of new business setup and industries result in giving better job opportunities with adequate salaries and wages. 
  3. Proper utilization of resources- The rural entrepreneurship helps in effective utilization of resources available in remote areas. The resources are present in sufficient quantity among rural areas which may remain lie idle if rural entrepreneurship does not exist. When industries will run via rural entrepreneurship programme, then the use of all these resources will enhance productivity thereby favoring nation in some way. In addition to this, labor available in villages also get some work in these types of entrepreneurships. 
  4. Reduce migration of villagers- Migration of people from rural areas to urban areas is one of the critical issues being faced by every nation in today’s time. People migrate to cities in search of job opportunities, better life and various other infrastructural facilities which are missing in rural areas. Rural urbanization works on removing this gap in terms of development among urban and non-urban areas. It helps in creating similar growth and development opportunities for peoples of villages as are available in urban areas. When people have access to job opportunities in their native areas, they would like to remain at their home instead of migrating to some other places. 
  5. Earns foreign exchange- Rural market serve as an important source of earning foreign revenue for nation. The products which are manufactured in rural areas are in high demand and exported to several countries all over the world. These products comprise of handicrafts, artifact, handlooms and various other agricultural products. All transactions are settled in international currencies which leads to increase the foreign currency reserve of country. 
  6. Enhance traditional culture- Rural entrepreneurship not only protects but also promote the art, creativity and culture of particular region on wider scale. It is seen that people from rural areas have great talent in terms of culture and tradition. Also, all sort of historic artistic activities were originated from rural areas only. Rural entrepreneurship paves the way for promotion of these activities, thereby enabling villagers to create wonderful handicraft items and earn their bread and butter via selling them. 
  7. Foster economic development- The economic development of remote areas across the nation is increased to great extent by rural entrepreneurship. It focuses on achieving equitable growth and development in both urban and rural areas. More capital is brought into the rural market by establishing new ventures and industries. All this also results in eliminating the differentiation among areas as slums, town, cities etc. 

Problems of Rural Entrepreneurship

There are lots of challenges and hardships which are faced while rolling out entrepreneurship programmes in rural areas. They are as listed below: – 

  1. Lack of funds- Absence of adequate amount of funds is one of the major issues faced by rural entrepreneurs. Finance is termed as backbone of every business and no business can perform if there is no availability of funds. Entrepreneurs in rural areas face great hardships in securing external funds due to the absence of credit in market as well as tangible security. 
  2. Poor infrastructure facilities- Entrepreneurs in rural areas suffered a lot due to the poor infrastructure facilities. They are unable to attain better growth rate in absence of basic infrastructure such as transport, communication and power supply which all are very bad when compared with cities facilities. All these are much needed things in order to run a business in smoothly manner. 
  3. Competition- Rural entrepreneurs faces a tough competition in market from large scale organizations and urban enterprises. They lack in terms of products quality, effective branding and proper standardization. All these factors make rural entrepreneurs inefficient in competing with these large-scale organizations. 
  4. Unavailability of skilled labor- Absence of skilled labor in remote areas is another critical issue faced by rural entrepreneurs. It is difficult to find skilled personnel in non-urban areas as most of them are willing to work in urban areas where they get high salaries and access to better amenities. 
  5. Poor quality of products- Rural entrepreneurs lack in better standard tool and equipments for regulating the product quality. This results in production of inferior quality of products. Customers are more quality sensitive in today’s era and may boycott the brand which is not focusing on quality control. 
  6. Exploitation by middlemen- Rural entrepreneurs largely get exploited by middlemen. In order to perform the marketing of products, rural entrepreneurs are heavily dependent upon middlemen who charges a huge profit. Absence of storage facilities and adequate transport services are another marketing issues faced in remote areas. 
  7. Legal formalities- A rural entrepreneur need to fulfill several legal formalities prior to establishing a business unit. These formalities include attaining a business license, pollution certificate and various other forms of clearance. The entrepreneur may find difficulty in completely all these tasks due to the low-level of education.  

Types of Rural Entrepreneurship

Various types of rural entrepreneurship are as listed below: – 

  1. Agro based enterprises- Agro based enterprises are one which are engaged in processing and selling of agricultural products. These products include fruit juice, sugar, wheat, rice, dairy products, jaggery, oil from oil seeds and many more. 
  2. Mineral based industries- Mineral based industries uses minerals ores as primary raw material for producing their range of products. Iron and steel industry, cement industry, aluminum industry, wall coating powders etc. are included in mineral based industries. 
  3. Handicrafts- Handicrafts are artistic items which are made from glass, jute, bamboo, soil, wood etc. In addition to this, antiques, traditional decoration items and toys are also covered here. 
  4. Textile industry- Textile industries include all those industries which are involved in spinning, weaving, tie and dye, and coloring and bleaching of textile. 
  5. Engineering services- Engineering services comprise of tool and equipments that are used in pumps, tractors, pipes and fittings, repairs, etc. 
  6. Forest-based industries- Forest based industries are involved in bamboo products, honey making, beedi industry, supply of wood and wood products, etc.