Scottish Rugby have announced they are to increase the funding at club and grassroots levels from £3.7m to over £5m for the coming season.
The £1.3m boost reflects the increasing priority which Scottish Rugby is placing on these sectors.
Chief executive Gordon McKie said the money is part of their drive to have 38,000 players at club level by 2012.
"We recognise the importance of better funding and we're building partnerships towards this goal," said McKie.
Currently some 27,000 people participate in the sport at club level in Scotland.
McKie added that they have developed relationships with government and the business community in order to maintain investment growth.
Colin Thomson, Scottish Rugby head of community rugby, said: "There is a wealth of activity going on in clubs and schools around Scotland as more people are becoming involved in rugby."
"This additional funding will be welcomed as a catalyst to ensure we open our doors to more people and keep driving up participation and interest in the game."
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