Filling the funding gap to boost small rural businesses

Figure: Managing Director and members of staff at small business Enimiro sort through vanilla pods. © IFAD/Jjumba Martin

IFAD Rural Voice

30 December 2025

Rural micro, small and mid-size enterprises (MSMEs) are the backbone of agriculture and food systems. But too often, they are constrained by a lack of investment and adequate capital.

Many investors simply lack the knowledge and capacity to reach small-scale farmers and rural MSMEs. That’s why bridging the funding gap requires an investor with a deep understanding of the agriculture sector and rural communities.

From India to Uganda and beyond, IFAD is stepping in to empower rural entrepreneurs to grow their businesses at every stage of their journey.

Getting started in rural India

Mizoram is India’s most heavily forested state, with forest covering over 90 per cent of the land. Here, farmers practice a traditional technique of shifting cultivation known as jhum. Despite having one of the country’s fastest-growing economies, many of Mizoram’s jhum farmers remain excluded from formal financing.

Rural entrepreneurs across the state are trying to fill the gap and establish businesses that link jhum farmers with strong value chains. But taking this sort of risk is a luxury that many aspiring MSME leaders can’t afford. 

KAMCO, a fruit processing start-up, received around US$60,000 in funding through the IFAD-supported FOCUS project to overcome this obstacle and trial its business model. KAMCO buys dragon fruit and star fruit from local farmers at a fair price to turn them into fermented juice.

“KAMCO was established for farmers,” says R. Lalhmingthanga, KAMCO’s founder. “The main objective is to help farmers in selling their products and to generate labor opportunities for others.”

The funding allowed KAMCO to set up a processing unit, exhibit its goods at local fairs and establish its brand – and the investment paid off. As a result of successful growth over the trial period, KAMCO started selling its delicious dragon fruit and star fruit juices in late 2024.

See: https://www.ifad.org/en/w/rural-voices/filling-the-funding-gap-to-boost-small-rural-businesses