Page 36 - IMDR - Journal of Management Development and Research - March2019-20

Problems in Rural Entrepreneurship

Entrepreneurs certainly play very important role in the development of economy thus
contributing to overall Gross Domestic Product of the nation. They face various

problems in day to day life and work. As thorns are part of roses, in the same way
flourishing business has its own kind of problems. Some of the major problems faced

by rural entrepreneurs are as under:
1. Financial Problems: Some of the major financial problems faced by rural

entrepreneurs as follows:

a. Paucity of funds: Due to absence of tangible security and credit in the market most
of the rural entrepreneurs fail to get external funds. Also the procedure to avail the

loan facility from the banks is time consuming that its delay often disappoints the

rural entrepreneurs. Lack of finance available to rural entrepreneurs is by far one of
the biggest problems faced by rural entrepreneurs nowadays especially due to global

recession.
b. Lack of Infrastructural facilities: In spite of efforts made by government the

growth of rural
Entrepreneurs are not very healthy due to lack of proper and adequate infrastructural

facilities.

2. Marketing Problems: Some of the major marketing problems faced by rural
entrepreneurs are as follows:

a. Competition: Rural entrepreneurs face stiff and severe competition from large
sized organizations and urban entrepreneurs. They incur high cost of production due

to high input cost. Problem of standardization and competition from large scale units
are some of the major problems faced by marketers.

b. Middlemen: Middlemen exploit rural entrepreneurs. Rural entrepreneurs are

heavily dependent on middlemen for marketing of their products who necessarily
pocket large amount of profit. Poor means of transportation facilities and storage

facilities are also other marketing problems in rural areas.

3. Management Problems: Some of the major management problems are as follows:
a. Lack of Knowledge of I.T: Information technology as such is not very common in

rural areas. Entrepreneurs rely on internal linkages that which encourage the flow of
services, goods, ideas and information. The intensity of family and personal

relationships in rural communities can sometimes be very much helpful but they may
also present obstacles to effective and efficient business relationships.

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