Rural India supplies a number of non-farm products for consumption in local market, regional market or even international market. Their production is normally carried out in the decentralised sector. The raw materials are either locally produced or managed from outside. Marketing and financing are the two important functions recognised for the success of such activities. This paper gives a brief idea about the availability of institutional finance to this sector. It also reflects on the performance of 'Automatic Refinance Facility of NABARD for financing rural non-farm activities and suggests changes in the facility for providing necessary finance for the development of this important sector.