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June 28, 2023

Are MSMEs the Answer to Sustainable Development

27th June, 2023 marked the United Nations’ Micro, Small & Medium Enterprises Day – celebrating the crucial role that MSME’s play in achieving the 2030 agenda for Sustainable Development.  ACF is committed to enabling rural people – particularly women and young people – in establishing enterprises to provide much needed fuel for families and local economies.


24 year old Satyaveer Singh is the founder/owner of Shree Ma Motors – an up and coming enterprise in his home town of Chirawa Rajasthan, that assembles and sells e-scooters!  With a 1.13 crore turnover, Satyaveer employs 36 people at his assembly unit in Chirawa – a place where employment options are limited and often confined to agriculture. Satyaveer and Shree Ma are a shining example of what MSME’s can do for rural communities and families.

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The Micro, Small, and Medium Enterprises (MSMEs) sector is the backbone of the Indian economy, contributing 29% to the nation's GDP. And As India strives to become a 5 trillion USD economy, the role of Micro, Small, and Medium Enterprises (MSMEs) becomes even more crucial. Micro-enterprises in particular, hold immense potential in tackling the persisting issue of unemployment in tier 2, tier 3 cities and rural areas. They tend to be more labor-intensive and require relatively lower levels of capital investment. These enterprises serve as engines of job creation, offering opportunities for the local population, particularly in regions where larger industries may be absent or limited.

It is for these reasons that Ambuja Cement Foundation (ACF) has adopted a 3-tiered approach to catalysing and empowering MSMEs at an individual, group and skill-based level – providing much needed guidance and a support to help kickstart rural enterprises and turn them into economic powerhouses for rural communities.


1. Home-based Enterprises 

ACF has taken great strides to bolster and diversify farm incomes away from traditional crops, and the potential for fostering individual enterprises around existing farming businesses is vast – reducing risks and generating multiple income streams for farming families. Women, in particular, have been some of the key beneficiaries of this initiative, and so far, 16,101 women have been actively involved in micro-enterprises supported by ACF - gaining economic freedom and social empowerment.

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After her divorce, Shafali Khatun, from Farakka West Bengal, moved back home. With pressure to contribute financially to the household, she joined an ACF promoted SHG and learnt about chick rearing. With nothing in her hand, she took a loan of Rs. 20,000 and kickstarted her own business, buying 350 chicks in 2011. But the birds got the ‘flu’ and 150 chicks died in that first year. Already in debt, she kept going.  Shafali bought another 500 chicks and this time sought some expert advice from ACF on how to raise them the scientific way. 9 years on, she has diversified into different breeds of chicken, built a shed with a capacity for 30,000 chickens and earns Rs. 17,000 per month and uses the money to fund her niece’s education.

Non-Farming enterprises are also providing households with off-farm stable income sources, and include various cottage industries/home businesses like the making of Papad, Pickles, Spices, Stitching, Knitting, or the operation of a local Kirana store. 

ACF has empowered 14,500 individuals to develop home-based enterprises, helping them attain economic growth and social empowerment. Income levels have risen significantly, with average monthly earnings increasing from Rs. 8,000 to Rs. 12,000, contributing also to the improvement of their social standing in the community.


2. Group-based Enterprises:

Group-based micro enterprises are also burgeoning, with many people preferring to work together with peers to form a business – helping spread risk, provide motivation and support, and share the workload.  

Working with SHGs, Federations and FPOs, ACF has fostered many group-based enterprises, including the manufacturing of spices, pickles, ghee, sanitary napkins, handicrafts, production houses, food canteen, and once again, livestock (goat & dairy – with a group based marketing approach).

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ACF kick-started organic farming promotion in 2010 in Bhagwanpur block in Uttarakhand.  Today, the district is home to the Bhu Amrit Farmer Producer Organisation, an ACF promoted collective of organic farmers who work across the entire value chain of organic production, certification, and marketing. With 667 farmer shareholders, the group produces a variety of products and has commenced marketing them in key markets such as Delhi, Gujarat & Punjab, and has even moved their products online, via Flipkart and Amazon.

So far, ACF has supported 2,800 entrepreneurs through group-based enterprises, which not only provide much needed economic fuel for rural economies, but act as a platform for learning and empowerment for their many members.


3. Skill-based Enterprises:

Skilled rural youth, with an entrepreneurial spirit, have great potential to create thriving businesses and generate local jobs in rural and regional India.  Primarily developed around technical trades like electrical and household goods repairing, refrigeration and AC mechanics, two-wheeler repair mechanics, welding and fabrication, and the beauty sector, these MSMEs are providing rural families with a much needed source of ‘off farm’ income which lift them over the poverty line.

Additionally, there are many existing entrepreneurs in rural areas who can benefit from focused training on entrepreneurship. ACF has rolled out a focused Entrepreneurship Development Program across locations to help existing, and new, entrepreneurs take their businesses to an all new level.  

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When the 2020 COVID-19 lockdown came along, Partha Mondal was less than 1 year into his brand new business, running a telecom shop in Dhulagori, Howrah.  Business came to an abrupt halt. But instead of sitting at home moping about it, he decided to put the time to good use and upgrade his skills – enrolling in Advanced Smartphone Repair course at SEDI, along with the Entrepreneurship Development Program. Putting his new skills to use and thinking laterally, he diversified his business and commenced ‘home service’ to villagers during the pandemic – helping them withdraw money via E-Sewa and biometric devices, and also becoming a Spice Banking Correspondent in the process. When the country opened up and he got back to work, he had a host of new services to offer his customers and his income jumped from Rs 15,000 to Rs 45,000 per month.

In the face of the pandemic, where India Inc. struggled to adapt, micro-entrepreneurs (particularly those in rural areas), just like Partha Mondal, demonstrated remarkable agility and adaptability - emerging as the frontrunners in embracing the new normal.


Conclusion: 

As agriculture becomes more and more fragile to shocks, there is a need to enable the development of alternative livelihood sources in rural India, and MSMEs provide the perfect solution. Like most economies and cultures, entrepreneurship has been an integral part of the cultural fabric of India for centuries. It’s time to shift our focus from the IT sector and urban India, to foster the entrepreneurial spirit that is alive and well in rural India also – one that has the potential to transform the futures of both families and communities!


June 28, 2023

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