(GIST OF KURUKSHETRA) Scaling up Enterprises by Incubation

(JUNE-2025)

Scaling up Enterprises by Incubation

Context:

The Deendayal Antyodaya Yojana -National Rural Livelihoods Mission j (DAY-NRLM) has expanded to 7,139 blocks spread over 742 districts across 28 States and 6 Union Territories. It has been instrumental in building a platform of over 10 crore rural women mobilized into community institutions. The community organizations have been provided capitalization support of more than INR 49,000 crores. More than INR 9.85 lakh crore of Bank credit has also been accessed by these Self-Help Groups (SHGs) since 2013-14.

Objective

The objective of the initiative was to pilot strategies to scale up at least 100-150 existing women-owned/ women-led growth-oriented enterprises in a State and create models for replicability.The incubators were expected to:

Develop these women-led enterprises as formal enterprises and build them as legal entities with proper business models.
Help the incubated enterprises increase revenue by 15% from the baseline (on a year-on-year basis) in 18 months.
Create business models for generating local employment. Improve creditworthiness of these enterprises and enable them to access credit from formal financial institutions
Create models for replicability across the State/other States
Capacitate the women entrepreneurs to enable them to run the business themselves.
Develop partnerships with innovators to catalyse growth of rural enterprises.

As this was the first time the rural women’s incubation programme was being taken up, the process of creating the incubator guidelines needed a number of iterations. It was a multi-level process, involving:

Study of the guidelines for various government-sponsored incubators.
Meeting existing incubators and understanding their models.
Discussions with teams of Invest India.
Discussions with existing incubators in the social enterprise space, seeking their feedback on what they would need to support rural enterprises.

From the above intensive studies, it emerged that most of the existing incubators provided two sets of services-

Funding-related services:

Some start-up funds to the incubatees.
Visibility of the incubatees to the angel investors.
Co-working space and a place to network and interact with similar start-ups.

However, mentoring was not much, and the incubatees had to travel to the incubator for seeking mentorship or support. Further, the existing incubates strength. Further, success of single-digit % is considered acceptable for the incubates (as most are either in ideation or proof of concept stage).

However, the NRLM’ steam had different challenges:

The NRLM team wanted to mentor existing enterprises to scale up.
The SHG enterprises were expected to be spread across the State.
Given the small size of the enterprise, and the dependence upon the enterprise for family sustenance meant that the entrepreneur could not be expected to leave the work and travel for frequent training camps.
The challenge of addressing remoteness, lack of access to urban markets, and lack of access to organised buyers had to be addressed.
The enterprises being self-funded or funded through debt by poor SHG households could not be allowed to fail or go from profit into losses as an outcome of growth-related expansion.

Training and Capacity Development

Product development training by Tata Taneira
Selling at Craft Fair by Dastkar
Training on visual merchandising
Training on Exporting handicraft by West Bengal

Market Linkages

Attended 3 buyer-seller meets (Saras 23, Saras 24 and Sabala 24) and connected to more than 25 Wholesalers, 2 big Retailers and 4 premium Boutique houses.
Ecommerce onboarding - Yespoho and Meesho.
Attended several State and National handicraft and Handloom Fairs.

Financial Linkages: To help expand the business, the application for Mudra loan through Jansamarth Portal was supported.

Formalization Support: To upscale the business, ensure various compliances and avail benefits of various government schemes, formalization was ensured through following:

Artisan card
Udyam Aadhar
ITR
GST
Fire insurance
Bookkeeping

Learning from the Programme

By examining the development and achievements of various enterprises, it has been observed that the incubator’s strategic support, including training, mentoring, and market linkages, has empowered individuals, fostered economic advancement, and improved the quality of life in rural areas. A few of the learnings from the initiative of the incubator programme, are as follows:

The SHG members performed exceedingly well in the challenge fund round, in spite of not having any experience or exposure to the process earlier.
The zeal, skill and enthusiasm to learn of the SHG entrepreneurs impressed the jury and mentors alike.
Regular and frequent reviews by the top leadership of the programme at the NRLM and SRLM levels helped in removing bottlenecks as well as retaining focus on the programme.
Ensuring and facilitating interaction among incubators while allowing them the flexibility to use their own processes for incubation helped ensure sharing of best practices and also using their own processes.
Field-level trust was compromised due to payment delays and unmet promises, leading to entrepreneurs being reluctant to share financial information with the incubation team.
Entrepreneurs gained insights into customer needs and segmentation, tailoring their products accordingly.
Entrepreneurs began maintaining daily cash books and keeping financial records.
Diversification of distribution channels was observed, with some adopting E-commerce for sales.
Active participation in product design and development interventions was noted.
Enterprises started prioritizing product quality.
Domain training exposed entrepreneurs to industry best practices.

Some best practices that emerged from the programme were:

Usage of e-application software for applying for the challenge round
Using the same software for tracking the performance of the enterprises
Creation of a buddy system for the enterprises with the existing women enterprises supported by the incubator acting as a buddy to the SHG entrepreneurs
Digital comfort of the SHG entrepreneurs post training and practice
Buyer-seller meetings effective for opening new channels for market

Conclusion:

In a nutshell, the incubator programme needs to be implemented with some fine tuning across India. This will not only ensure compliance of the clarion call of the Prime Minister to make three crore Lakhpati Didis but will also lead to women empowerment, which will lead them to make significant contributions in making India a developed country by 2047.