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Date of Submission: 04-02-2014

Assignment on Rural Entrepreneurship


Submitted to Smita Bhowmik Lecturer Department Of Management Submitted by Md. Ashikul Islam Id.: 10113101066 Intake: 25 Section: 02 Program: BBA

Bangladesh University of Business & Technology

Definition Of Rural Entrepreneurship:


Rural Entrepreneurship can be defined as entrepreneurship emerging at village level which can take place in a variety of fields such as business, industry, agriculture and acts as a potent factor for economic development. Rural entrepreneurs are those who carry out entrepreneurial activities by establishing industrial and business units in the rural sector of the economy. In other words, establishing industrial and business units in the rural areas refers to rural entrepreneurship. So, broadly it can be said that, rural entrepreneur is one who basically resides in the rural area, utilizes available talent and builds capacity in the rural work force; maximizes the use of raw material and services available in the area and provides opportunity for economic growth and development to the village communities.

Some examples of rural entrepreneurship:


Agro Based Industries: like sugar industries, jiggery, oil processing from oil seeds, pickles, fruit juice, spices, dairy products etc. Forest Based Industries: like wood products, bamboo products, honey, coir industry, making eating plates from leaves. Mineral based industry: like stone crushing, cement industries, red oxide making, wall coating powders etc. Textile Industry: like spinning, weaving, coloring, bleaching. Engineering and Services: like agriculture equipments, tractors and pump sets repairs etc.

Roles Of Rural Entrepreneurs In Economic Development:


The entrepreneurs with their ability to scan, analyze and identify opportunities in the environment transform them into business proposition through creation of economic entities. 1. Formation of Capital: Rural entrepreneurs by placing profitable business proposition attract investment to ensure private participation in the industrialization process. The otherwise idle savings are channelized for investment in business ventures which in turn provides return. 2. Balanced Regional Development: The rural entrepreneurs always look for opportunities in the environment. They capitalize on the opportunities of governmental concessions, subsidies and facilities to set up their enterprises in undeveloped areas. Thus entrepreneurs reduce the imbalances and disparities in development among regions. 3. General Employment: This is the real charm of being an entrepreneur. They are not the job seekers but job creators and job providers. Employment is generated directly by the requirement of the large enterprises and consequential development activities. 4. Improvement in Standard of Living: Entrepreneurial initiative through employment generation leads to increase in income and purchasing power which is spent on consumption expenditure. Increased demand for goods and services boost up industrial activity.

5. Stable Economic Growth: Rural entrepreneurs contribute in the development of rural economy and thus increasing the rate of GDP. Which makes the way of stable economic growth. 6. Increase in per Capita Income: Entrepreneurs convert the latent and idle resources like land, labor and capital into goods and services resulting in increase in the national income and wealth of a nation. The increase in national income is the indication of increase in net national product and per capita income of the country. 7. National Self-reliance: Entrepreneurs are the corner stores of national self-reliance. They help to manufacture indigenous substitutes to imported products which reduce the dependence on foreign countries. 8. Earning foreign exchange: There is also a possibility of exporting goods and services to earn foreign exchange for the country. Hence, the import substitution and export promotion ensure economic independence and the country becomes self-reliance. 9. Planned Production: Entrepreneurs are considered as economic agents since they unite all means of production. All the factors of production i.e., land, labor, Capital and enterprise are brought together to get the desired production. This will help to make use all the factors of production with proper judgment, perseverance and knowledge of the world of business. The least combination of factors is possible avoiding unnecessary wastages of resources.

10.Equitable Distribution Economic Power: The modern world is dominated by economic power. Rural entrepreneurs contribute in industrial development and business activity. Industrial development may lead to concentration of economic power in few hands which results in the growth of monopolies. 11.Promotion of artistic activities: The age-old rich heritage of rural India is preserved by protecting and promoting art and handicrafts through rural entrepreneurship. 12.Awaken the rural youth: Rural entrepreneurship can awaken the rural youth and expose them to various avenues to adopt entrepreneurship and promote it as a career.

Development and support of rural entrepreneurs:


Different organization like IFCI, ICICI, SIDBI, NABARD etc. are trying to sort these problems. Marketing problems are related with distribution channels, pricing, product promotion etc. In order to make the rural entrepreneurs to stat the business venture, the following measures may be adopted: 1. Creation of finance cells: The financial institutions and banks which provide finances to entrepreneurs must create special cells for providing easy finance to rural entrepreneurs. 2. Concessional rates if interest: The rural entrepreneurs should be provided finance at concessional rates of interest and on easy repayment basils. The cumbersome formalities should be avoided in sanctioning the loans to rural entrepreneurs. 3. Proper supply of raw materials: Rural entrepreneurs should be ensured of proper supply of scarce raw materials on priority basis. A subsidy may also be offered to make the products manufactured by rural entrepreneurs cost competitive and reasonable. 4. Offering training facilities: Training is essential for the development of entrepreneurships. It enables the rural entrepreneurs to undertake the venture successfully as it imparts required skills to run the enterprise. 5. Setting up marketing co-operatives: Proper encouragement and assistance should be provided to rural entrepreneurs for setting up marketing co-operatives. These co-operatives shall help in getting the inputs at reasonable rate and they are helpful in selling their products at remuneration prices.

6. Government support: Govt. should provide separate financial fund of rural entrepreneur. Govt. should arrange special training programs of rural entrepreneurship. 7. Creating competitive environment: Rural entrepreneur should more competitive and efficient in the local & international market. 8. Developing vocational training: Vocational training should be extended to the community that enables them to understand the production process and production management. 9. Provision of micro credit: Making provision of micro credit system and enterprise credit system to the entrepreneurs at local level. 10.Educational facilities: Better educational facilities and schemes should be extended for the rural people from government part.

Biography of rural entrepreneurs:


The economy of our country stands largely on rural development and rural entrepreneurs contribute a lot to the rural development. Here I describe the story of two rural entrepreneurs who make them established by their skill and hard working.

Rural Entrepreneurs Biography: 1

Name: Faisal Ahmed Current Status: Faisal has started batik works and experiments on new designs for the mens wears, especially the Punjabis and fotuwas (T-shirts). The people living in the rented apartments of his family also lend their helping hands in his tailoring works, expanding his industrial enterprise day by day. Start of Business: At an early age Faisal Ahmed started Acupressure and while in this activity he thought of becoming an individual income earner. He however, didnt want to join any job, and so decided to set up a business of his own. Investment: In 2000 with a capital of Taka two lacs, he started a boutique shop and named it Anneshita Aarong. Situated at 18 B.K. Roy Road at Heikhpara,

Khulna, his shop initially sold embroidered saris, three-piece dress material, mens wear, punjabis and household linen. He has a manufacturing unit and he emphasized on creative endeavors to produce attractive products and win a good name as a fashion designer and garments manufacturer. After a few years, Faisal ventured to expand his market and started to explore the Dhaka market in order to popularize his products in the capital. Initially the shop keepers displayed his ember ordered dresses and saris and paid his well after sale of his products. But later with passing years these people refused to pay his back. In this way he waited three years to receive all the money from the sale of his products, and though he got some money back, he failed to recover all his money. Being disheartened, he started to concentrate again on his boutique shop at Khulna, though he knew that his products had won a good market at Dhaka. Employment: Starting a new with three male and about a hundred female workers, he started with full vigor in his manufacturing enterprise of embroidered dresses, saris, and household linen. Challenges He Faced: Faisal complained that raw materials for his dresses are not always available in the form of good quality. The textile materials are bought from the local market which quality is not always reliable and color not permanent as desired. His greatest problem is his financial constraint as banks in Khulna are not eager to provide loans to the entrepreneurs. Way of getting success: Faisal is proud that he has been able to establish himself as a successful entrepreneur. This was a time when he could not make his ends meet since he was financially in a very difficult position but today he is leading a successful life. More so, he is happy and satisfied in being able to employ more than a hundred employees, by not only helping them to earn but also assisting these poor, disadvantaged people to support their families and lead a respectable life. Today he is successful, and well placed in life which he has earned through the din of his hard work and confidence. He says, If there is no one to support you, go ahead

fearlessly since Allah is there to guide you and it is He who will rescue you and assist you to stride ahead with dignity and prosperity Future Prospects: He plans to open a boutique shop in Dhaka and show those who had cheated his that he knew how to be successful in business.

Rural Entrepreneurs Biography: 2

Name: Md. Rabiul Islam Current status: At present as Rabiuls business developed, he took loan and bought land to build his farm. With the loan money a suitable land was bought for Taka eight lacks and the factory at present was set up at Taka three and a half lacs. He employs two men and two women to assist him in his business requirements of the poultry farm. Today Robiul has gradually developed his Poultry farm. His monthly expenditure is Taka two and a half lacs, while his average turnover is around Taka Five lacs.

Start of Business: In the year 2001, Md. Rabiul Islam set up his M.S. Poultry at LP4 Western Zone B, Khalishpur, Khulna.

Investment: He first bought 60 chicken and started his business with an initial investment of Taka twenty thousand. He took loan from his friends and also CC loan from the Bank. He faced problems initially as he did not have any training on poultry farming. He talked to people in the relevant field and started learning from his failures. He never was disheartened because he was bent on achieving success and tried to find ways to prosper and progress. Trading was his business and he gradually prospered, leading to thirty- three hundred layers in his farm at present. It took time to earn the tricks of the trade and he shared his problems with his workers, who tried to guide him and give him advice. He informed that he bought one-day chicks, which started laying eggs after eighteen weeks. He observed that about a hundred hens gave 95% eggs, which, however, decreased daily. After they laid eggs for eighteen months, they were sold off and new chicks were bought. These had to be given vaccine after two months, anti-biotic and insecticide spray. Challenges He Faced: He faced problems initially as he did not have any training on poultry farming. His poultry firm was attacked by bird flu virus. A large portion of his firms hens were died. Then he talked to people in the relevant field and learned that these had to be given vaccine after two months, anti-biotic and insecticide spray and started learning from his failures. He never was disheartened because he was bent on achieving success and tried to find ways to prosper and progress.

Way of getting success: Robiul feels proud to be an entrepreneur which has given his fame and recognition in society. He thinks that this profession makes one self-reliant and gives opportunities for progress if hard work and discipline is applied through all efforts. Robiul looks back to his struggling days when he never thought that he could ever overcome his financial problems. He has attained self-confidence but insists that sustainability must be achieved for an overall success. The life of an

entrepreneur is independent. He does not have to report to anyone. If he gives his efforts and works hard with a determined will, he is sure to succeed. Future Prospects: Robiul wants to extend his poultry farm and develop various business related with the poultry and the eggs. He insists that rural people should be given training on various business activities and he feels that he should start a training center for poultry rearing courses. He also plans to build a shop where he wants to sell eggs and also supply to different areas of Khulna from his shop.

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