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Part - III

Small Scale

When we explore the means of financing from below we have to bear in mind that the amount of resources at the disposal of the beneficiary population is meager as compared to their well off counterparts. Hence whatever means of finance they generate the magnitude would be small vis-à-vis traditional sources of financing from above. Moreover, the amount generated would be very less as compared to the gargantuan needs of finance.

Role

A natural consequence of the above fact is that finance from below will predominantly play the role of a supplementary mechanism to finance rural development. At best some projects in some areas may be financed by the beneficiaries fully from conception to implementation and maintenance. While in most other cases financing from below may be limited to just partial meeting of costs of initiating and implemented of the project. And still there will remain a huge number of development interventions (DI) that would have to be financed entirely from above.

Sources

The possible sources of finance for the people could be: -

• Accumulated savings of the past and from current income.

• Inherited wealth.

• Loans from various sources, to be repaid after the implementation of the development programmes.

• Funds generated from sale of services that originate from implementation of the development programmes, e.g., revenues from provision of irrigation facilities to users.

An important aspect of development interventions is the maintenance and sustenance of the projects after completion, which requires finance. Even if beneficiaries generate their own funds to maintain such development intervention it would fall under the purview of financing from below.

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* Contributed by -
Reena Narula,
2nd Year - PGDRM,
Institute of Rural Management, Anand.