The National Innovation Foundation – India (NIF) and Small Industries Development Bank of India (SIDBI) have launched the second phase of Micro Venture and Innovation Fund (MVIF). The agreement was signed by Dr. Vipin Kumar, Director and Chief Innovation Officer, NIF-India and Ramesh G Dharmaji, Chief General Manager, SIDBI in New Delhi today.
The concept of MVIF was first proposed in 1997 by Society for Research and Initiatives for Sustainable Technologies and Institutions (SRISTI) at International Conference on Creativity and Innovations at Grassroots (ICCIG) at IIM Ahmedabad.
In his budget speech of financial year 2002-03, Yashwant Sinha, Minister of Finance, announced a micro venture capital fund for small innovations to be initiated by SIDBI in cooperation with the NIF to facilitate the transition of innovations into enterprises.
The first phase of this fund was launched in the year 2003 and 193 projects by various grassroots innovators across districts and states benefited from it with more than 75 percent recovery. It proves that grassroots innovators scouted and mentored by Honey Bee Network are a good risk.
In its second phase, the fund will be made available to innovators and entrepreneurs for technology commercialisation. Nearly, 244 projects will be financed through MVIF in coming years. Innovative technologies will be incubated and launched in the market with support of this fund.
The key guiding principles of MVIF are timely and hassle-free financing of innovations. If financing is provided at an early stage to the innovator, time to market is considerably reduced for a given product.
MVIF is unique, in the sense that it is the first and only micro venture fund in the world, which extends financial support to grassroots innovators under a single signature on a simple agreement of understanding without any collateral or a guarantor.
Innovators from informal sectors mostly come up with frugal innovations to fill up the technological gap between the need and supply in the society. These innovators generally do not have a sound financial background and are not capable to scale up production and/or commercialisation of their innovation. Loan as an option is also not available due to the lack of a guarantor or a collateral for mortgage. They may become successful in converting their ideas into prototypes but usually the story ends there.
Based in Ahmedabad, the NIF-India, is an autonomous organisation of the Department of Science and Technology, Government of India providing institutional support to innovators from the informal sector.