Kudumbashree views Micro Enterprise development as an important tool for poverty reduction. When the concept of developing enterprises by poor women was planned in 1999, the response from various stakeholders including banks was far from encouraging. The previous experience of failures in group enterprises under various government programmes, perceived lack of entrepreneual abilities of poor and apathy of banks in associating with ventures of the poor were the prime reasons for this unfavourable environment. But the most crucial factor was the lack of any successful enterprises model, which was worth emulating. The task for Kudumbashree was simple and challenging, to create a model for enterprise development. Kudumbashree went about creating a model, and the results are for everyone to see. 18969 enterprises across the state covering urban and rural areas, ranging from “traditional” enterprises like Goat rearing and Dairy, Catering units, Multi Purpose job clubs, Health care enterprises, Computer hardware and data entry units, innovative enterprises like Clean Kerala Business in solid waste collection are a testimony to the resolve of women to succeed in enterprises.

 The Kudumbashree definition of Micro Enterprise, any enterprise that has:

• Investment ranging from Rs 5000 to Rs 2.5 lakhs
• Turnover ranging from over of Rs 1 lakh to Rs 10 lakhs.
• Potential to generate a net income of at least Rs 1,500 per member per month.
• Fully owned, managed and operated by members themselves.

 There are certain common features in the funding of the various enterprise programmes. All Kudumbashree enterprises are bank linked and a minimum of 50 % of the project cost has to be through bank loans. The subsidy component is limited to 50% of the total project cost and the entrepreneurs’ share is to the tune of 5% of the total project cost.

 The emphasis in the Kudumbashree enterprise programme was to encourage innovative business ideas rather than on the “tried and tested” ones. A simple and practical way for identifying enterprises was devised; any idea that could solve a problem existing in the society (Problem Solving), fill the gap that existed (Gap Filling) or cater to new opportunity (Emerging Opportunities) was converted into an enterprise. The fact that most of the entrepreneurs were first generation entrepreneurs from their families was kept in mind while implementing the RME programme. The micro enterprise development was seen as an emerging process, which will start with low capital low risk and low profit in the initial stage that will gain momentum and later scale up to greater capital, risk and profit.