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Vinod Khosla on India's Rural Economy

Via Rajesh Jain on Vinod Khosla's Microdredit interview from Financial Express

Finance is still the biggest problem for development of rural economy despite it being innovative. People in the rural areas have no money and often tend to go for high-cost borrowings. No venture capitalists or funders have ever come forward to help those community with social obligations in mind. Who lends the money to those poor people without collateral securities despite having the entrepreneurial capabilities, innovativeness, creativeness and hard working abilities?

Nobody understood that development of India’s rural economy is vital for growth than urban economy. It is a foregone conclusion that there will never be a growth unless rural economy develops. It is also time for those in the high positions to have courage, passion and help those in BPL (below poverty line) category.

I would like to spare 30 per cent of my time towards focussing on helping developing the rural economy through funding those micro-finance companies which serve the rural community with dedication and selfless manner. I have identified six micro-finance companies in Andhra Paradesh, Tamil Nadu, Karnataka and Uttar Pradesh. I was impressed with their performance and will contribute my mite to those companies to lend the poor people. If those six companies could reach nearly 30 lakh women on a regular basis, imagine what will be the impact if one look at national level, which is amazing.

There are NGOs and grameen representatives, who have powerful micro-financing model with a business principle in mind and market competitiveness. Venture capital funds for BPL families is a very good idea. If it happens in a more systematic way it will be probably the single largest revolution after the Green Revolution of 1960 in India and I hope so this will happen.