Rural Industries Programme ( RIP)
INTRODUCTION
A unique approach for rural industrialisation where the emphasis is on stimulating and helping
the potential entrepreneurs to set up small enterprises through consultancy outfit positioned by
SIDBI.
OBJECTIVE
Development of viable and self-sustaining tiny / small enterprises in rural and semi urban India
by harnessing local entrepreneurial talent. The Programme attempts to address the problems
such as rural unemployment, urban migration and under-utilisation of local skills and resources,
and is designed as a comprehensive Business Development Services programme.
The Rural Industries Programme (RIP) of the Bank provides a cohesive and integrated package
of basic inputs like information, motivation, training and credit, backed by appropriate
technology and market linkages for the purpose of enterprise promotion.
APPROACH
Development of underdeveloped areas :
Under RIP, an economically underdeveloped district is identified and an Implementing Agency
(IA) Development professionals, Technical consultancy organisaion or Non- Government
organisation is positioned to provide a comprehensive and integrated package of inputs and
business development services to potential entrepreneurs. The identified IA positions a team of
professionals at the field level for a period of five year. IA also provides support during post
implementation period to ensure sustainability of enterprises.
Integrated approach : The package of services provided by IA, inter alia, includes identifying
and motivating rural entrepreneurs, identification of viable ventures based on local skills and
resources, training, appropriate technology linkages and finance tie-up with the formal banking
sector.
Performance Oriented incentives : Entreprises are grounded on technological and economic
considerations. No subsidies or grants are available to entrepreneurs. Besides start-up
administrative support, IA is paid performance fee in the range of Rs. 2000 to Rs. 6000 per unit
promoted, depending on project size.
Long term viability and sustainability of the enterprises promoted is an important aspect of RIP.
New enterprises require continued support, at least for the first year of their operations.
Therefore, an amount of Rs. 1,000 per unit is payable to the IAs by way of post-sanction
incentive over and above the initial performance fee for providing escort services to the assisted
entrepreneurs and post-sanction work.
A sub-sectoral approach is followed to enable the implementing agencies to provide necessary
backward and forward linkages to the enterprises.
Monitoring and Management support: Services of independent professional agencies Regional Development Cells (RDCs) are outsourced for monitoring, Identification of new IAs,
Promote and transfer new project ideas based on appropriate rural technologies in association
with R&D Laboartories and specialised institutions, provide marketing linkages, provide technical
and managerial services to IAs, half yearly visits to agencies - at least 10% of the end
beneficiaries to be visited and submit quarterly reports to SIDBI.
To bring about qualitative improvement in the programme implementation, a centralised Team
for RIP, specially charged with the responsibility of strengthening the technology content of
enterprises promoted under RIP, has been positioned.
Marketing support : Entrepreneurs are supported for group participation in domestic trade
fairs and exhibition cum sale.
EVALUATION
RIP, over a period has evolved into a very penetrating, cost effective and impact making
intervention as brought out in the evaluation exercise conducted by National Institute of Rural
Development, Hyderabad.
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Higher employment generation - average employment per enterprise promoted is
4.70 persons i.e. a total employment of over 44000.
Cost-effectiveness - the cost per employment generated works out to Rs.1,096.
Entrepreneurial competence - Focus is on entrepreneurial competence of rural poor
rather their social status.
Social upliftment & Poverty reduction - 59.35% of the Entrepreneurs are from
Socially / Economically vulnerable sections.
Low Development cost - Cost per enterprise promoted works out to Rs. 5,100
Investment catalysed - Project outlay of Rs. 48,000 per enterprise.
Women empowerment - 13 % of projects set-up by women entrepreneurs.
Sectoral break-up - Manufacturing and service enterprises constituted 67% and 33% of
the units respectively.
PROGRESS
Upto March 2003, the programme was in progress in 62 districts of 24 states through 32
implementing agencies. cumulatively, around 10,800 enterprises have been promoted under RIP
including around 2,350 units promoted during the FY 2002-03.
INTERNATIONAL RECOGNITION
SIDBI’s efforts in this direction have been internationally recognised and the RIP has bagged the
prestigious "ADFIAP Development Awards 2003" given by the “Association of Development
Finance Institutions in Asia and Pacific” (ADFIAP) under the Countryside Development category.
The award was received by Shri A. Vikraman, CGM, SIDBI, H.O. from Shri Anothai
Techamontrikul, Chairman, ADFIAP at the Annual Conference of ADFIAP held at Ulanbatar,
Mangolia in September 2003.
The RIP has emerged as a comprehensive programme generating employment for rural poor in
industrially backward areas by grounding of entreprises on techno-economic considerations
rather than grants / subsidy related considerations. Professtional support is provided in
identifying ventures, linking them with formal banking channel after due appraisal, providing
escort services at each stage from inception of project with emphasis on technology transfer and
long term sustainability. In the coming years, the programme is proposed to be extended to
about 100 districts with a view to making it a national programme for mass employment.
MAHILA UDYAM MITRA (MUM)
Mahila Udyam Mitra (MUM), is a variant of RIP which targets promotion of micro enterprises by
women entrepreneurs. The programme was test launched in Andhra Pradesh in end 1994 with
APITCO as the IA. The programme has met with success in Andhra Pradesh and has led to
grounding of 2037 enterprises by women entrepreneurs as on March 31,2003. The success has
prompted the Bank to extend the intervention to Kerala with APITCO continuing as the IA. The
programme has resulted in promotion of 150 enterprises by women in Kerala.