By and large, people working to improve conditions in the poorer parts of the world consider microcredit the practice of offering very small loans to individuals starting small businesses to be a successful tool. But microcredit isn't as wellsuited for people starting up riskier ventures; the funds needed are often substantially higher, and the more significant risk involved in the startup would inevitably lead to a greater default rate. MIT's Neal Gershenfeld, of Fab Lab fame, described in his book Fab the need for "microventure" services in the developing world to support the greater risk and greater upside of local innovation. It turns out that he wasn't alone in seeing that need. Aavishkaar India Micro Venture Capital Fund started operation in May, 2002, with the goal of promoting development in rural and semiurban India through funding and operational support. In principle, this differs little from any venture capital company in Silicon Valley or London; the main difference is the size of the required funding: Aavishkaar provides equity ranging from "Rs. 10 lacs to Rs. 50 lacs, approximately USD $20 thousand to USD $100 thousand." They've been careful with the funding of the Rs. 5 crore (a bit more than a million US dollars ) raised, Rs. 3.5 crore is yet to be invested. According to Aavishkaar, their focus is on "sustainable financing" (PDF):
Aavishkaar India Micro Venture Capital Fund:
'Aavishkaar' means innovation in Hindi. Hence, Aavishkaar concentrates on supporting micro enterprises based on grassroots innovations. Companies supported by Aavishkaar include: Craftsbridge, which provides marketing and logistics support for village crafters; Servals, a rural innovation group responsible for the development of micro-irrigation systems and high efficiency kerosene stoves; Shree Kamadhenu Electronics, makers of equipment for dairy cooperatives that increase production efficiency and transparency; and Tide Technocrats, producers of micro hydro and biomass energy systems for rural villages.