The idea of the MVIF originally evolved at first International conference on Creativity and Innovation at Grassroots (ICCIG), Jan 11-14, 1997, at IIMA. A note was circulated in advance to various state governments secretaries invited to the conference about such a fund. It was based on a case study of tilting bullock cart describing how anew innovation when gets traction from market needs not only risk capital but also hand holding. That’s how, GIAN was set up to mobilize such capital. In 2003, the Finance Minister announced such a fund after our advocacy with then finance secretary and economic adviser.

Idea was simple. Micro Finance met the financial needs of enterprises for which market existed. MVIF met the need of the enterprise for which market did not yet exist. SIDBI set up such a fund at NIF in 2003 October. After repayment by NIF of entire balance of MVIF, the same has been re-established at GIAN. GIAN model was scaled up in the form of NIF in 2000 and we hope that MVIF will be an Indian contribution to the global repertoire of novel poverty alleviation approaches. It is strange that despite all kind of innovation indices having been developed, the WIPO/World Bank and other international development institutions have not yet recognized that without risk capital grassroots innovations can not be scaled up.

Small Industries Development Bank of India (SIDBI) in partnership with GIAN, has in principle agreed to sanction funds not exceeding Rs. 127.10 Lakh (One crore Twenty-Seven Lakh Ten Thousand only) for the purpose of promoting at least 50 rural innovations emanating mainly from ITI/diploma/Polytechnic/school drop-out students, from and for grassroots, rural, women entrepreneurs, etc.

The project seeks to promote rural innovations on a PAN India level with thrust areas in UP, Bihar, Orissa, Maharashtra, Chhattisgarh and Jharkhand. In the 1st phase, the focus states are UP and Bihar only. Other states will be covered in the subsequent years.

The priority areas vis-à-vis investments to be made are in the following order:

• Novelty (potential for filing patent)
• Affordability
• Inclusivity and gender sensitivity
• Innovations for niche markets
• Potential direct/indirect beneficiaries

An average investment per innovation would be Rs. 2.00 Lakh. The threshold limits are as under:

• 25 innovations: Below Rs. 1.20 Lakh
• 15 innovations: Above Rs. 1.20 Lakh and below Rs. 2.00 Lakh
• 10 innovations: Above 2 .00 Lakh and below Rs. 4.00 Lakh

In order to fulfil the objectives of this unique initiative of promoting rural innovations, GIAN will employ the following strategy:

• GIAN shall setup a Rural Innovation Centre, manage the Rural Innovation Fund with an aim to strengthen Innovation ecosystem in rural areas in the country and support at least 50 innovations at different stages of maturity across the country in a period of one year, focusing more on ideas and projects of ITI, polytechnic and drop-out students besides other innovators addressing unmet needs of rural areas.
• The proposed Centre for Rural Innovation will have an advisory committee of national experts to guide its deliberations. The Centre shall aim at nurturing new rural innovative ventures including products and services in the areas where they occur, i.e., through in situ incubation on a PAN India basis.
• Making a database of innovative final year projects of polytechnic and diploma students, agriculture and extension students, Idea bank of students of ITI and others including dropouts, and a database of unmet needs.
• Broad areas of incubating innovation are:
  • Idea/concept generation/identification
  • Appraisal/Vetting of ideas/concept
  • Product/process development including providing technical support
  • Commercialization of product/processes
  • Handholding support for marketing and financial linkages
• GIAN may partner with reputed institutes in the field of Rural Development and Management, lead business service providers, stakeholders, etc. It will pursue the following activities.
  • Supporting action-oriented and problem-solving research and consultancy
  • Conduct suitable awareness (amongst schools, colleges, ITIs/polytechnics) by various means viz conducting quiz/competitions, challenge fund etc.
  • Develop experience sharing mechanism amongst other centres (Swavalamban Club/HBN innovation clubs for interaction with role models and mentors), focus group discussions (at least 25 people) amongst stakeholders (preferably in presence of bankers) in various regions.
  • Undertake effective promotion and advertisement initiatives
  • Share Monitoring and Evaluation reports including baseline and end line tracker and yearly impact reports
  • Online courses may be offered for young innovators willing to learn from the experience of successful incubates and also experts, besides HBN partners;
  • Publication of case studies/videos for creating wider social awareness
• Prior to the disbursement of funds to the beneficiaries, GIAN will carry out the following activities:
  • A 3 days training in book keeping so that innovators learn to separate personal and enterprise account, learn to outsource things which are much costly to build oneself, identify quality control parameters, build systems of after sale service; develop regular feedback management system, learn to collaborate with other investees so as to promote each other’s products and services etc.,
  • The family of the innovation-based entrepreneur will be involved in taking responsibility for the financials and other enterprise functions
  • All sources of income of innovators will be considered for repayment and not just the funded enterprise so that there is no incentive to divert money or use infrastructure created for non-funded activities
  • Investees will be encouraged to take responsibility of monitoring 2-3 other investments nearby

In summary, GIAN will strive to incubate at least 50 rural innovations, with the successful commercialisation of at least 30 enterprises in the initial one year which will have created social impact directly or indirectly.