**2. Defining sustainable rural development**

Rural and urban areas are different from each other in terms of socio-economic characteristics and other aspects. Therefore, development strategies aimed at rural areas should be different from those for urban areas. However, to achieve equality on welfare efforts should be made to minimize the differences in living standards of both areas. There is no universally accepted definition of a rural area or rural development. Rural areas can be described as "residential areas where the economy is mainly based on a natural resource such as agriculture & forestry, where face-to-face interaction is more common, rules of daily life are shaped by local customs, and social, economic, and cultural developments are relatively slow and delayed [3].

Similarly, rural development is a challenging notion, in theory, practice, and policy. World Bank [4] defined rural development as raising the level of rural income through agricultural modernization. In the '70s rural development was seen as a purely economic issue and rural development was seen synonymous with agricultural development. Later in 1980, World Bank redefined rural development as a strategy to improve the economic and social life of the rural people. Since then, rural development has been defined in various ways.

According to Kata [5] "rural development indicates the overall development of rural areas to improve the quality of life of the rural people".

Shepherd [6] defined rural development as "the set of activities and actions of diverse actors that taken together leads to progress in rural areas."

All these above definitions have many missing links and the authors failed to consider some important dimensions and aspects of rural development. From early 1900 to the 1990s the concept of rural development has changed significantly. In 1900s it was guided by profitability, however, in late 20th century it was directed to the sustainability of agriculture and other activities and based on a holistic, inclusive, and participatory local and territorial model [7, 8].

#### *Role of Microcredit in Sustainable Rural Development DOI: http://dx.doi.org/10.5772/intechopen.102588*

Madhu [9] defined rural development "as an activity concerned with the improvement of spatial and socioeconomic environments of rural areas to enhance the ability of the individuals to cater to and sustain their well-being".

"Rural development is people who live in rural areas and earn their living mainly from agriculture. with an inclusive approach to increase the welfare of people and families who provide such as nature, environment interaction, use of natural resources and technology, and agriculture-based industry. economic activities are carried out in harmony and aim to create an ecosystem" [3].

Rural development nowadays is about an overall improvement of the human quality of life in terms of economic social, political, environmental, and administrative issues [10]. Rural development has emerged from agricultural development to human, social, environmental development along with agriculture. Therefore, a shift from rural development to sustainable rural development has occurred in the recent past. Sustainable rural development is based on four basic pillars which are social, economic, environmental, and political.

According to a report on the 17th session of the Commission on Sustainable Development of the United Nations "sustainable rural development is vital to the economic, social, and environmental viability of nations. It is essential for poverty eradication since global poverty is overwhelmingly rural. The manifestation of poverty goes beyond the urban-rural divide; it has a sub-regional and regional context. It is therefore critical, and there is great value to be gained, by coordinating rural development initiatives that contribute to sustainable livelihoods through efforts at global, regional, national, and local levels, as appropriate. Strategies to deal with rural development should take into consideration the remoteness and potentials in rural areas and provide targeted differentiated approaches."

#### **2.1 Importance of sustainable rural development**

Rural development is concerned with improving the quality of life and social, economic wellbeing of the people living in the rural areas. Sustainable rural development is little different from rural development. It also focuses on the technical, socioeconomic, and environmental conditions of rural areas. Therefore, the daily basic needs of the rural population are covered by realistic public utilities combined with technical, socioeconomic, and environmental conditions to support regional economies and urban-rural linkages called sustainable rural development [11].

Rural development is concerned with the improvement in the different indicators like increasing productivity, raising employment opportunities, high adoption of modern technologies, low poverty, high income, and good infrastructure, etc. just focusing on these things without concerning environmental conditions is not sustainable development. Sustainable development links with social economic, and environmental sustainability of the rural areas which do not compromise the ability of the future generation to meet their own needs. For example, cultivation of crops by using high quantity of chemical fertilizer, chemical may contribute little to crop production, but it is not sustainable because the application of high chemical fertilizers degrades the agricultural land. Similarly, the zero application of fertilizer or pesticides is also not a concern of sustainable development which adversely affects the crop yield leading to low income of farmers. In this way, low income generates many socioeconomic problems in rural areas which adversely affect the current rural population. The main focus in sustainable rural development is meeting your daily needs without compromising the social, economic wellbeing of the current generation of rural

population coupled with focusing on the wellbeing of future generations without compromising the environment quality.

### **3. Rural areas and their challenges**

The rural-urban gap exists all over the world and eliminating inequality in access to services and opportunities is the main challenge for policymakers. The rural population is facing many challenges some of which are discussed below.

#### **3.1 Home to poor**

The rural areas are considered as a home for the poor. Generally, the rural population is poor as compared to the urban areas. The unequal distribution of assets, working facilities, and uneven land ownership cause high poverty in rural areas. Therefore, the poverty rate in the rural population is 17.2% three times more than in urban areas [12]. Endemic poverty has caused many negative consequences for the rural population. Especially rural population in countries of South Asia, Sub-Saharan Africa, and Latin America is more vulnerable to extreme poverty, climate change events (floods, heatwaves, disease, etc.), and social exclusion.

#### **3.2 Gender inequality**

Gender inequality can be observed more in the rural area as compared to urban areas. The women have limited access to services, capital, productive infrastructure, and technologies. Their limited freedom inhibits the women to perform their role actively in the development of the rural areas. According to International Fund for Agriculture Development [13], women spend 12–13 h in different daily activities, but they remain unpaid.

#### **3.3 Limited employment opportunities**

Rural areas are normally characterized by seasonal employment opportunities. Unemployment normally prevails more in rural areas. Moreover, underemployment is also a common problem in rural areas. The low productive jobs and low-waged activities discourage the rural youngsters which ultimately tend to migrate to the urban areas.

#### **3.4 Subsistence economy**

The majority of the rural population in many developing and even developed countries rely on agriculture as a source of livelihood. In developing countries, the majority of the farmers are small farmers, and the traditional economy is based on subsistence agriculture. Many researchers have estimated that there are around 500 million small farms (landholding up to 2 ha) in the world [14–16] which makes almost 70–80% of the total farms in the world [17]. Subsistence agriculture is volatile to extreme weather shocks, floods, droughts, degradation of resources.

#### *3.4.1 Dependence on agriculture and related issues*

The rural people are majorly depending on agriculture for their earnings. As a major source of earning, agriculture still faces many challenges and problems. The small landholding is one of the main problems impeding the development of rural
