Factors Affecting the Expansion of Micro-enterprises: A SWOT Analysis on Cottage Level Rice Processing

Abstract

Micro-enterprises are highly beneficial to rural low income community, in many ways. Rice Processing Village program was launched by Institute of Post Harvest Technology (IPHT) to increase the income earned by rural paddy farmers. High quality parboiling techniques were introduced to rural paddy farmers so that they can sell parboiled rice instead of paddy. This study was conducted to identify strengths, weaknesses, opportunities and threats in expanding rice processing activity as a micro-enterprise at rural level. A sample of rice processors of 30 Rice Processing Villages was selected using stratified random sampling technique. Data collection was done using focus group discussions, key informant interviews and from the secondary sources. Of the strengths identified, the participants being paddy farmers were the most important. Existing knowledge on parboiling, which was favourable in adopting the technology and existing social contacts also were strengths. Lack of capital, mainly financial to invest in the enterprise, lack of business management skills, which hampers future planning and laziness to conduct strenuous activities, were identified as weaknesses. Being situated in major paddy producing area, simplicity of the technique introduced and availability of natural resources were identified as main opportunities. Major threats identified were competition with large scale rice millers and being situated in an agricultural area, which limits the marketing opportunities and less flexibility of local banks in obtaining credit. All these factors should be considered in initiating rice processing village programs in future.