Mrs.A.Pankajam, Associate Professor, Avinashilingam School of Management Technology, Avinashilingam Deemed University for Women, Coimbatore-43
Rural India was once considered a mere painter’s muse and not a uberous ground for business. The reason being – around 42% Indians are below poverty line earning around $1.25 a day. Addressing poverty-based issues, NGOs, Microfinance Institutions (MFIs) and social entrepreneurial organisations have emerged in a big way to provide sustainable solutions to the poor through scalable business models and also created market opportunities for business transforming the rural markets’ landscape substantially.
In the 21st century, rural India has evolved in a big way. The growing literacy rates, rising income levels, increasing purchasing power and consumption levels of people have grabbed the attention of corporates, who have erstwhile wooed urban consumers to buy their products. As of 2009, rural regions are flocked by big companies like Coca-Cola, Nokia, HUL, LG, Bharti Airtel, ITC, Bajaj Allianz and Godrej. Over the years, these companies also realised the need to develop rural regions as a key for their growth as well as the nation's economic development. In the process of charting out ways for market-based development, they partnered with MFIs to expand their network. These MFIs, acting as distributors to the companies, are benefitting them by enhancing their brand visibility in rural areas, helping them in tapping more rural consumers, save distribution costs, etc.
Micro Finance Institutions (MFIs) now have access to staggering 50 million clients with powerful social network. Their understanding of group dynamics, bonding and proximity to customer is unparalleled. The extensive reach and power of SHGs are now being leveraged by companies to penetrate this market. And that is precisely why several consumer product companies are exploring this... [continues]
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