The Fund offers financial assistance by way of grant like loan, venture type assistance, etc. for promoting innovations.
NABARD Rural Innovation Fund (RIF) is a fund designed to support innovative, risk friendly, unconventional experiments in Farm, Non-Farm and micro-Finance sectors that would have the potential to promote livelihood opportunities and employment in rural areas. “The Fund with a corpus of around Rs 140 Crore was established in October, 2005 and projects are funded out of this corpus. This Fund is a 5 year fund (extended up to 2012 recently),” says Mr. C.K.Gopalakrishna, CGM. The corporate office of NABARD is located in Mumbai.
NABARD and Swiss Development Corporation (SDC) have been active in promoting rural non-farm sector activities for the last over 25 years by extending NABARD refinance to Rural Financial Institutions, as well as through promotional activities like skill/ entrepreneurship development, market promotion, artisan cluster development, etc. by way of grant assistance to NGOs, etc.
During the studies conducted on the effectiveness of these promotional initiatives, it was observed that there are a large number of product and process innovations reported from rural areas – most often from farmers/ artisans without any formal education or exposure to markets – which have great potential to improve income generation capacity of large number of farmers, reduce the drudgery of rural population especially the poor women, increase employment opportunities, etc. only if these innovations are scaled up and its benefits made available to the large world outside its origin.
NABARD and SDC therefore agreed in 2005 that the promotional funds made available to NABARD by SDC still remained unutilized could be used to spot such innovations and help the potentially useful innovations to be scaled up. This resulted in the creation of a separate Rural Innovation Fund in NABARD for this purpose. The Fund is administered by NABARD under the Steering Committee headed by Chairman, NABARD with representation from NABARD, SDC and external experts in rural development.
Criteria for Project Selection
When asked about the criteria for selection of projects, Mr.Gopalakrishna says, “Any innovations in the rural farm, non-farm or microfinance sectors will be eligible form support under RIF.” The applications will be subjected to scrutiny with regard to capabilities of the champion of the innovation, the concept and the likely impact of the innovation, its scalability/ replicability and the contextual relevance of the innovation, before it is accepted for funding support under RIF.
“NABARD solicits applications from individuals/ organizations interested in demonstration and scaling up of rural innovations through press advertisements, interactions with NGOs/ academic and research institutions, etc. and through the media of Farmers’ clubs/ Self Help Groups, etc. Individuals/ organizations interested to work with NABARD to promote innovations are extended financial assistance by way of grant, venture type assistance, loan, etc. Already about 100 such innovations have been supported by NABARD. A list of the innovations supported till December, 2008 is appended,” says Gopalakrishna.
Focus of the Fund
“NABARD is looking for innovations which have rural poor in the focus, has maximum potential for replication/ scalability and is likely to have wider impact on the income generation, employment opportunities, reduction in drudgery, etc., preferably those for which no other forms of support are available,” he emphasizes.
There are no special programs for each area. “Any region/ activity conforming to the overall objectives of the Fund will be supported. But our experience is that a large number of such projects emanate from resource poor regions like the NE States, Orissa, Chattisgarh, etc.,” Gopalakrishna adds. Research activities are not a priority area of the Fund. “Fundamental research is not a priority area under RIF, though not outside the purview of the Fund, as the objective of the Fund is to help scale up the innumerable number of rural innovations already being reported,” says Gopalakrishna.
The Fund offers financial assistance by way of grant like loan, venture type assistance, etc. for promoting innovations. Though no limits have been fixed for individual innovations as they depend on the merits of each case, generally, financial assistance to a maximum extent of Rs 30-40 lakhs are considered.
Training for Rural Agriculturists
Training forms an essential part of demonstration/ scaling up of the innovation and a part of the project itself is eligible for support under the Fund. “One of the innovative projects funded under the fund is one from Udaipur in Rajasthan in which the marginal farmers and agricultur labourers migrating from Rajasthan to Gujarat, etc. are extended skill Development Training so that their employability increases when they migrate and even to find alternate jobs without migration,” says Mr.Gopalakrishna. “Moreover, NABARD extends financial assistance under its ongoing programmes like Rural Entrepreneurship Development Programmes, Farmers’ Club Programmes and SHG-Banks Linkage Programmes for various training activities of farmers,” he adds.
The Fund helps innovations not only in the farm sector, but also in the non-farm and micro credit sectors are eligible for support under the scheme. “Any innovations in the rural non-farm sector are eligible for support. Under the Cluster Development Initiative, NABARD has been supporting a number of artisan clusters in handicrafts, handlooms, etc. across the country,” says Mr.Gopalakrishna.
Support in Marketing Produce
Any innovative marketing proposals is also eligible for support under the Fund. NABARD is in the process of identifying marketing aggregator models in the form of Community Owned Companies of Fabindia, Earthygoods, Sandhi Foundation, etc. for possible support under the fund. NABARD also have separate schemes for supporting Rural Haats, Rural Marts and participation of artisans/ SHG members in Melas/ Exhibitions (like SARAS in Mumbai, Dilli Haat in Delhi, etc.)
Natural Resource Management Projects
The Fund also supports water and natural resources conservation projects. Speaking about counseling farmers in usage of fertilizers and water resources, Mr.Gopalakrishna says, “A number of innovative proposals received for funding support under RIF relate to efficient water usage, organic cultivation, etc.
Water conservation is being supported in tribal areas of Chattisgarh, Manipur, Tripura, Meghalaya, Nagaland, etc. under projects already sanctioned under RIF. The Umbrella Programme for Natural Resource Management (UPNRM) – another project being administered by NABARD is also actively involved in these areas.”
Response to the Fund
When asked how the Fund is received in the rural areas of India, Mr.Gopalakrishna maintains, “The Fund has been well received and NABARD has been able to fund about 100 innovations already and the numbers are growing.
Intensive efforts are, however, needed to further upscale the programme and NABARD has tied up with similar organizations like the Techno Entrepreneurs Development Programme of the Department of Science & Technology for closer cooperation in spotting and funding rural innovations. Efforts are also on to rope in organizations like the National Innovation Fund to work closely with RIF.”
He adds, “NABARD salutes the innumerable number of inquisitive minds responsible for a large number of scalable innovations and would like the projects funded under the Fund to speak for themselves.”