# 2010 - 039 India ’ s Rural Financial System : Does it Support Pro - Poor Innovation ?
نویسنده
چکیده
From the perspective of poverty alleviation, socially relevant, or pro‐poor, rural innovation is of particular interest in a country like India since it is in rural areas that most of the poor live. Pro‐poor innovation in rural areas is more likely to occur through small‐scale ventures and entrepreneurs than industrial research and development. The Indian banking system does not support such rural pro‐poor entrepreneur‐based innovation efficiently. Instead a pioneering alternative financing sector has been emerging recently. There are three broad categories of organisations in this sector: grassroots innovators and incubators, micro venture capital firms, and small‐scale financiers. This paper considers why the core of India’s financial system, its banking sector, does not support rural entrepreneur‐based innovation. It ends by discussing the emerging alternative financing sector at the periphery which, on the other hand, appears able to do so.
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