Executive Summary

Rural entrepreneurship is such kind of entrepreneurship that concern with the businesses that develop in rural area by any entrepreneur. It is a big business sector of our country and it contributes a great to our national GDP. We discuss some of the rural entrepreneurship that can collect from some sources. In this report we discuss about the sector of rural entrepreneurship, its present scenery, some statistical data, contribution to GDP, how many people involves with this sectors, advantages and disadvantages of rural entrepreneurship.

Introduction

Like entrepreneurship, rural entrepreneurship also conjures different meaning to different people. Without going into semantics, rural entrepreneurship can simply be define as entrepreneurship emerging in rural areas is rural entrepreneurship. In other word rural entrepreneurship implies rural industrialization.

Let us know, for the sake of our knowledge, the meaning of rural industry-

Rural industries are generally associated with agriculture. Some other sectors also associate that we discuss in the main body of our report.

By this report you can know an overview about the rural entrepreneurship of Bangladesh. From the study we realize that rural entrepreneurship is a very important and most leading industry for Bangladesh still now. It contributes a huge portion to GDP that no other specific can do. The main positive thing of rural entrepreneurship is that there are many people engage with this sector for their living and for daily consumption.

A scenery of rural entrepreneurship in Bangladesh

Meaning of rural entrepreneurship: Rural entrepreneurship can simply be defined as entrepreneurship emerging in rural areas is rural entrepreneurship. In other words, establishing industrial units in the rural areas refers to rural entrepreneurship. The definition of village industry has been recently modified as rural entrepreneurship.

Types of rural entrepreneurship:

Agro-based industry Textile industry(including khadi) Service Forest-based industry

Having understood the meaning of rural entrepreneurship and rural industry let us move on to appreciate the need for and significance of rural entrepreneurship in Bangladesh.

Need for rural entrepreneurship: the need for rural entrepreneurship for developing industries in the rural areas is imbued with multiplicity of justifications as listed below:

1. Rural industries being labor incentive have high potential in employment generation.2. By providing employment, these industries have also high potential for income

generation in the rural areas.3. These industries encourage dispersal economic activities in the rural areas and thus

promote balanced regional development.4. Development of this in the rural areas also helps build up village republics.5. Rural industries also help protect and promote the art and creativity, i.e. the age-old

rich heritage of the country.6. Rural industrialization fosters economic development in rural areas.7. Last but not means the least, rural industries being environment friendly lead to

development without destruction, i.e. the most desideratum of the time.

How to develop rural entrepreneurship: Establishing an industry and thereby developing entrepreneurship is not one-man activity. In fact it involves multi-pronged activities. It has some criteria’s to develop rural entrepreneurship such as:-

Raw material is a must for any industry. Finance is considered as lubricant for setting up and running an industry. Funds

therefore need to be made available on time at soft terms and conditions to those who really need it.

One peculiarity of rural entrepreneurs is that most of them join their entrepreneurial career not by choice but by chance.

One effective way to include the entrepreneurial acumen and attitude may be imparting entrepreneurial education in the schools, colleges and universities.

Sometimes the real problem in setting up industries is not the non-availability of facilities, but non-awareness of facilities whatever is available.

Proper provisions need to be made to impart the institutional training to orient the entrepreneurs in specific products and trades so that the local resources can be harnessed properly.

Advantages:

Easy to establish Create new employment Need little capital Risk is less Increase self dependencies Contribute to rural development

Disadvantages:

Source of capital is not enough Market is small Technology unavailable There is not enough support from government Not enough education system for it.

Scenery of Sector wise rural entrepreneurship in Bangladesh

Agro-based industry

Overview: Most of the people (near 85%) in Bangladesh attach with agriculture directly or indirectly. Agriculture contributes 32% in 1980 and 22% in 2000 to GDP. In the agriculture about 3.75 crore male and 2.28 crore female was worked within 1999 to 2000. The growth rate of agriculture increase 4.2% to 5.53% in 1980-81 to 2000-01 respectively. Most of the rural entrepreneurship in Bangladesh growing based on agro-industry. There are many agro based industry in Bangladesh that people take to make them as an entrepreneur.

There are different sector in agro-based industry. These are:-

Agriculture Crops and Horticulture Animal farming Fisheries Poultry

Sectoral GDP shares (%)

Sector 2001 2002 2003 2004Agriculture 25% 24% 23.5% 22.8%Crops and Horticulture 14.7% 13.8% 13.4%% 12.9%Animal farming 2.9% 3% 2.9% 2.9%Fisheries 5.5% 5.4% 5.3% 5.2%Poultry 2.4% 2.7% 2.95% 2.97%

Agriculture: Agriculture is the main source of employment in our country. At present about 63.2% of total labor force are related to agriculture. Agriculture is the single sector that holds most female employment.

Crops and Horticulture: There are many people in our rural area make entrepreneurship with crops and horticulture. Our environment and weather is very much helpful for cropping. The entrepreneur of crops take three option of cropping:-

1. Multiple cropping patterns: Cultivation of more than one crop in a particular land and in the particular time.

2. Relay cropping pattern: Cultivation of one kind of crops just after harvesting another

kind of crops. 3. Inter cropping pattern: Cultivation of other crops before harvesting the cultivated

crop i.e. new crops are cultivated within the existing crop.

Animal Farming: The source of rural entrepreneurship and there are many of people involve with this entrepreneurship. The 1988-89 census estimates that there were 20.36 million cattle, 12.48 million goats and sheep. The government tries to increase

the growth rate of animal production by providing necessary credit facilities.

Fisheries: It’s one of the traditional rural entrepreneurship in Bangladesh. There are many people of south-west area in Bangladesh are related with this entrepreneurship. It also involves with the exporting business of fish and it contributes a big part to national GDP. The gross production fisheries is estimate at 1200000 metric tons in 1994-95 ( inland 922000 and marine 278000 metric tons ) the annual rate of growth of

total fish production 0.3% in 1970 and 9.39% in the early 1990s.

Poultry: Poultry firm is one of the most profitable and easy to setup entrepreneurship. At present there are many poultry firm in our country. It also contributes a considerable portion to GDP. The contribution of poultry to GDP 2.4% in 2001 and 2.97% in 2004 respectively.

Government involvement in agro-based industry

The first major drive to agro industry was the establishment of Agriculture Commission in 1960.The main motive of the Agriculture Commission was:

To form active agricultural policies In particular establishing public control of both collection and distribution of agricultural

sector. Enhancing involvement in irrigation and the like.

The agriculture sector of Bangladesh is divided into two parts. These are:-

1. Crop2. Non-crop

Government policy on agriculture

Any applied activity through proper utilization of natural resources which relates to production, development, preservation, processing, marketing and extension of not only crops but also agricultural commodities such as fish, meat, eggs etc.

Financing of agro-based industry

Agro-based industry is playing a vital role in the economy of Bangladesh. This sector is providing the highest contribution to GDP.

Sources of financing: The sources of agriculture exist in Bangladesh are:-

Formal SourceQuasi Formal Source

Informal Source

Formal Source: Tow specialized formal financial institutions to finance in the agriculture sector of Bangladesh are:-

a) Bangladesh Krishi Bank

b) Rajshahi Krishi Unnayan Bank

Quasi Formal Source: Non-government organizations (NGOs) are the source of agriculture financing. The examples of Quasi formal sources are:-

a) Grameen Bankb) BRACc) Proshikad) CARE

Although the interest rate is high but low transaction cost insists the farmers to take loan from the quasi formal source.

Informal Source: Informal source is the main source of agriculture financing in Bangladesh. Interest rate is the highest which range from 0-100% in this source. But transaction cost is the lowest. The examples of informal sources are:-

a) Village money lendersb) Shop keepersc) Land lordd) Mahajons etc.

Textile industry (including khadi)

Overview: Textile industry is one of the leading industries in Bangladesh but all the textile industry is not include in rural entrepreneurship. There are different kinds of textile industries in Bangladesh. Such as woven and knit wear, silk, tat, khadi etc. But rural entrepreneurs are involving in producing silk, tat, khadi etc. many year ago our rural entrepreneur was make mosline sharee. Rajshahi silk is one of the most popular and success textile industry for rural entrepreneur because exporting of rajshahi silk increase day by day. There are many people on

hill area of Bangladesh are engaged with tat industry.

Service Sector

Overview: service sector in rural area is not very popular and few people engaged with this sector. Some sectors that rural entrepreneurs takes as a profession. These are:-

a) Small cottageb) Hotelc) Guest Housed) Restaurante) Boat etc.

Small cottage: This is one kind of hotel but the size is very little, such as three to six room facilities, most of the time there is no food facilities only resident, normally rent is lower than hotel etc. we can see this types of cottage in Shylet, Ragamati, Bandorban and some other area

in Bangladesh.

Hotel: Normally the hotel of rural entrepreneurs is not large as like town hotel. It contains some of rooms with or without restaurant facilities. This types of hotel’s room is not highly decorated, rent is not much and other facilities such as room service, security is not so good.

Guest House: Guest house looks like home with all kinds of servant facilities. Such as food make in the house with the demand of the customer, it have enough personality management, leaving room facilities are available, guest house rent is higher than the other discuss above.

Restaurant: This entrepreneurship grows mostly at tourist area. In cox’s Bazar, Shylet, Ragamati, Chittagong, Sundarbon and some other area in the country. Restaurant serves many types of food. Foods vary with the variation of the area. At cox’s Bazar sea food, Shylet is special for tea, at sundarban honey some time deer meet etc.

Boat: Bangladesh is a country of river. So we can say that boat is one of the most important vehicles. But, because of urbanization in the city area the necessity of boats is very low. But in

the rural area it the main vehicle still now, so many entrepreneur engage with this business.

Forest-based industry

Overview: A country should have 25% of her total land. But in Bangladesh have only 13% of her total land. But many depend on this forest for their earnings. There are some of industry also that they on the forest. We discuss here some of it:-

Furniture making: Most of the furniture we use in our household or for office that by wood. And most of the woods come from forest. There are many rural entrepreneurs engage with this business.

Honey collection: It is one most popular business that depends on forest. Some rural entrepreneurs invest to collect honey from the forest and then they sell it into the market.

There are some other rural entrepreneurship has in Bangladesh is discussing below:

Grocery shop: Some of the people in the rural area become an entrepreneur by shop business.

Normally this shop contains the everyday necessary things.

Owner of van/Rickshaw: Some people buy van or rickshaw and give lease it to other with a minimum charge in return.

Fish Depot: Fish is a fish collection spot. The entrepreneur of this depot collect fish by a fixed

rate of this fish from fish cultivator and then sell it to fish processing company.

Blacksmith: A few numbers of entrepreneurs engage with this type of entrepreneurship. The make spread, knife etc.

Tea Stall: Tea stall is another type of entrepreneurship. If it is in rural area it becomes a rural

entrepreneurship.

Conclusion

From the discussion we try to show a short picture of rural entrepreneurship. It was so difficult to collect the information about rural entrepreneurship but we try our best to accumulate the information. We discuss about rural entrepreneurship of Bangladesh according to “Bangladesh SME Foundation”.

References

Entrepreneurship Development- S.S.Khanka Ministry of Agriculture- Bangladesh Bangladesh SME Foundation The Premier Bank Ltd. Bangladesh Muhammad Amir Hossain- Deputy Director, statistics Department,

Bangladesh Bank.

LETTER OF SUBMISSION

03 January 2011

The Teacher

Ahsanullah University of Science Technology (AUST)

Sub: A scenery of rural entrepreneurship and analyze.

Dear Sir,

We are the student of “School of Business” BBA (3rd year 2nd semester) at AUST. We took a duty from you for making a report on “a scenery of rural entrepreneurship and analyze”. We are five members in our group and try hard and soul to make this report. We collect the data of rural entrepreneurship from various sources in country. But it is important to say that the collection of information about rural entrepreneurship is so difficult for us, because we live in capital city and rural area is so far from the city. Another think also need to mention that there is no proper information in the website also. But we try our best.

Therefore, we pray and hope that you will consider all the mistakes and lacking of our report.

Sincerely yours

S.M.Mamun Morshedul Mohiuddin

ID-08.01.02.123