Impact of Women Entrepreneurship Development on Families: A Study of Women run micro-enterprises in Selected districts of Maharashtra.
Thesis Submitted to the Padmashree Dr. D. Y. Patil University, Department of Business Management in partial fulfillment of the requirements for the award of the Degree of
DOCTOR OF PHILOSOPHY In
BUSINESS MANAGEMENT
Submitted by MS. RASHMI GOPINATHAN (Enrollment No. DYP-PHD 066100016)
Research Guide Dr. R. GOPAL DIRECTOR DEAN & HEAD OF DEPARTMENT
PADMASHREE DR. D.Y. PATIL UNIVERSITY, DEPARTMENT OF BUSINESS MANAGEMENT, Sector 4, Plot No. 10, CBD Belapur, Navi Mumbai – 400 614
June 2010
IMPACT OF WOMEN ENTREPRENEURSHIP DEVELOPMENT ON FAMILIES : A STUDY OF WOMEN RUN MICRO ENTERPRISES IN SELECTED DISTRICTS OF MAHARASHTRA
DECLARATION
I hereby declare that the thesis entitled “Impact of Women
Entrepreneurship Development on Families: A Study of Women run micro enterprises in selected Districts of Maharashtra” submitted for the
Award of Doctor of Philosophy in Business Management at the Padmashree
Dr. D.Y. Patil University Department of Business Management is my original work and the thesis has not formed the basis for the award of any degree, associate ship, fellowship or any other similar titles.
Place: Navi Mumbai.
Date:
Signature of the Guide Signature of the Signature of the student Head of the dept.
CERTIFICATE
This is to certify that the thesis entitled “Impact of Women
Entrepreneurship Development on Families: A Study of Women run micro enterprises in selected Districts of Maharashtra” and submitted by
Ms. Rashmi Gopinathan is a bonafide research work for the award of the
Doctor of Philosophy in Business Management at the Padmashree Dr. D. Y.
Patil University Department of Business Management in partial fulfillment of the requirements for the award of the Degree of Doctor of Philosophy in
Business Management and that the thesis has not formed the basis for the award previously of any degree, diploma, associate ship, fellowship or any other similar title of any University or Institution.
Also certified that the thesis represents an independent work on the part of the candidate.
Place:
Date:
Signature of the Head of the Department Signature of the Guide
ACKNOWLEDGEMENT
I am greatly indebted to the Padmashree Dr. D.Y. Patil University, Department of Business Management which has accepted me for the Doctoral Program and provided me with an excellent opportunity to carry out the present research work.
I am grateful to my guide, mentor, philosopher Dr. R.Gopal for having guided me throughout the research span of time and for providing his constructive criticism which made me bring my best. I would also like to thank sir for being there at any point of time without considering his own precious personal time.
I would also like to thank Mr. Mahendra Gamre Sir, Training Head MAVIM and also all the District Heads of MAVIM. Special thanks to Dr. Veena Punecha, Research Head (SNDT University) having discussed and guided me with the topic. Prof. Kumar (IIM – Bangalore), Mrs. Kusum Balsaraf, Deputy M.D.- MAVIM for having supported me throughout the study. I would be failing in my duty if I did not thank the grass root level workers for helping me throughout the field work.
I sincerely thank my father for providing me the necessary motivation for completing this dream project. I also wish to place on record my sincere thanks to my revered deity and my late mother who have provided me with the strength and ability to carry this research out of the best of my ability.
Lastly I also wish to thank all my near and dear ones who have been directly and indirectly instrumental in the completion of my dissertation.
Place:
Date: Signature of the student CONTENTS
CHAPTER TITLE PAGE NO. NO. List of Tables List of Figures List of Abbreviations EXECUTIVE SUMMARY 1. Introduction – Development of Entrepreneurship 1 – A conceptual and Theoretical Interpretation 1.1. The Entrepreneur: Origin of the Concept. 1 1.2. Concepts of Entrepreneurship. 2 1.3. Historical Development of Entrepreneurship in 5 India. 1.4. The Colonial Era 6 1.4.1. Post Colonial/ Modern Era 7 1.4.2. New Classical Economic Theories. 10 1.4.3. Psychological Theories. 12 1.4.4. Sociological Theories 18 1.4.5. Contemporary Theories 20 2. Literature Review 21 2.1. Western Research on Entrepreneurship 21 2.2. Indian Research on Entrepreneurship. 33 2.3. Studies on Women Entrepreneurship in Indian 37 Context. 2.4. Studies on Entrepreneurship from Low Income 46 Group. 3. Statement of the Problem 51 3.1. Objectives of the Study 51 3.2. Hypothesis 52 4. Research Methodology 53 4.1. Understanding the issue 53 4.2. Pre-Study 53 4.3. Primary and Secondary Data 54
4.4. Instrument for Survey. 54 4.5. Selection of Samples. 55 4.6. Pre Testing Phase 57 4.7 Tabulation and Statistical Analysis of Data. 58 4.8. Interpretation and Report Writing. 58 4.9. Limitations of Study. 58 5. Development of Women Entrepreneurship. 59 5.1. The Existing Scenario 59 5.2. Entrepreneurship Among Poor Women. 62 5.3. Women and Micro Enterprises. 62 5.4. Profiles and Typology of Women Entrepreneurs. 65 5.5. Entrepreneurs in Large and Medium Sectors. 66 5.6. Entrepreneurs in Small Sectors. 67 5.7. Micro Entrepreneurs. 67 5.8. Small Scale Entrepreneurs. 67 5.9. Role of Government/ Non Government 68 Organizations in Development of Women Entrepreneurship. 6. Microfinance and Micro Enterprises 70 6.1. Microfinance Globally (Europe & Asia). 71 6.2.1. Microfinance in Europe. 72 6.2.2. The Case of Ireland. 72 6.2.3. The case of Germany. 73 6.2.4. Microfinance Lessons Learned from Europe. 75 6.3. Microfinance in India. 76 6.3.1. Origin and Early Development. 76 6.3.2. Medieval India. 79 6.3.3. British India. 80 6.3.4. Independent India. 81 6.4. Linking Formal and Non Formal Finance: A 85 Financial Innovation. 6.4.1. MFI and their approaches. 90 6.5. Micro enterprise. 94 6.5.1. Micro enterprise Development. 95
6.5.2. Micro enterprise and Economic Self Sufficiency. 101 6.5.3. Micro Enterprise and Women. 102 7. Role of Government and Non Government 106 Organization for Entrepreneurship Development in Maharashtra. 7.1. Maharashtra Centre for Entrepreneurship 106 Development. 7.2. Annapurna Mahila Mandal. 108 7.3. Bhartiya Yuva Shakti Trust. 110 7.4. National Small Industries Corporation Ltd. 112 7.5. Small Industries Development Corporation. 115 7.6. Central Social Welfare Board. 117 7.7. State Bank of India. 122 7.8. District Industries Centres 123 7.9. Mahila Aartik Vikas Maha Mandal. 126 8. Data Interpretations and Findings 137 8.1. Data Interpretation 137 8.2. Summarisation of Findings. 183 9. Conclusion 192 10. Suggestions and Recommendation 196 Reference Section. 201 Annex. I - Bibliography . Annex. II – Questionnaire. Annex. III- List of Activities Annex. IV – Statistical Tables of SPSS Findings Annex. V– Region and District Profile
LIST OF TABLES
List of Tables Page No.
4.2. Detail of Sample Size 57
5.1. Average Annual Growth of Enterprises 61
under Women.
6.1. Microfinance Services. 93
6.2. Sectoral Classification of Micro- 98
enterprises.
8.1.1. Age 137
8.1.2. Educational Level 138
8.1.3. Religion 139
8.1.4. Marital Profile 139
8.1.5. Family Type 140
8.1.6 (a) Monthly Income – Before 140
8.1.6 (b) Monthly Income – After 141
8.1.7 (a) Choice of Entrepreneurial Activity 141
8.1.7 (b) Relation between Entrepreneurial Activity 143
and Age.
List of Tables Page No.
8.1.7 (c) Relation between family type and type of 144
entrepreneurial activity.
8.1.7 (d) Relation between Entrepreneurial Activity 145
and Income.
8.1.8. Years of Experience in existing business. 146
8.1.9. Motives for venturing into 146
entrepreneurship.
8.1.10. Interdependence of women entrepreneurs Annex. IV 247
and families.
8.2.1 (a) Occupation 149
8.2.1 (b) Impact of Entrepreneurship on Income 150
8.2.1 (c) Change in the Monthly Income of 151
Respondents.
8.2.2. Type of decision maker and decision on 153
spending.
8.2.3. Impact of entrepreneurship development 154
on Asset Formation.
8.2.4. Debt Status 155
8.2.5.1 Control over earnings. 156
List of Tables Page No.
8.3. Impact of women entrepreneurship on 249-Annex.IV
standard of living.
8.4. (a) Key Drivers, Mean and Std. Deviation. 254-Annex.IV
8.4. (b) Correlation matrix. 255-Annex.IV
8.4. (c) Communalities. 255-Annex.IV
8.4. (d) Total Variance. 256-Annex.IV
8.4 (e) Rotated Component Matrix. 257-Annex.IV
8.4. (f) Component Transformation Matrix. 258-Annex.IV
8.4. (g) Covariance Matrix 259-Annex.IV
8.4. (B) Logit Model 260-Annex.IV
8.5.1. Entrepreneurial Characteristics. 165
8.5.1 (a) Independence 166
8.5.2 Leadership 167
8.5.3. Decision Making 168
8.5.4. Risk Taking Ability 169
8.5.5. Future Planning 170
8.5.6 (a) Initiative of Borrowing Finance. 171
8.5.6 (b) Experience of Borrowing Finance. 172
List of Tables Page No.
8.5.6 (c) Purchase of Raw Materials 173
8.5.6 (d) Marketing Initiative 174
8.5.7 (a) Support from Family 175
8.5.7 (b) Support from Community 175
8.5.8.1 Demographic Factors 177
8.5.8.2 Type of Venture 178
8.5.8.3 Type of Traits 178
8.5.8.4 Internal Inputs 179
8.5.8.5. External Inputs 179
LIST OF FIGURES
List of Figures Page No.
1.1 Mc- Cleland’s Theory Model 13
1.2 Hagen Theory Model 15
1.3. Atkinson’s Model 15
1.4. Shapero’s Model 16
1.5. Kunkels Theory Model 17
5.1. Women Entrepreneurs Economic 61 Development.
6.1. Types of Programs for Economic Self 102 Sufficiency.
7.1. Organizational Chart of DIC. 126
8.1. Entrepreneurship Development Stages in 182 Rural Maharashtra
LIST OF ABBREVIATIONS
MAVIM Mahila Aartik Vikas Mahamandal
GAD Gender and Development Approach
ILO International Labour Organisation
NGO Non Government Organization
MFIs Microfinance Institutions.
ROSCAS Rotating Savings and Credit Association
SHG Self Help Group
B.C. Before Christ
RRB’s Regional Rural Banks
RBI Reserve Bank of India
NABARD National Bank for Agricultural and Rural Development
SIDBI Small Industries Development Bank of India
IRDP Integrated Rural Development Programme.
SEWA Self Employed Women’s’ Association
RMK Rashtriya Mahila Kosh
MCED Maharashtra Centre for Entrepreneurship Development
SICOM State Industrial and Investment Corporation of Maharashtra
MSSIDC Maharashtra Small Scale Industries Development Corporation.
MELTRON Maharashtra State Electronics Corporation
MIDC Maharashtra Industrial Development Corporation
MITCON Maharashtra Industrial Technical Consultancy Organization.
IDBI Industrial Development Bank of India.
IFCI Industrial Financial Corporation of India
ICICI Industrial Credit and Investment Corporation of India
SIDO Small Industries Development ORganisation.
EDP’s Entrepreneurship Development Programmes
DPSE Development Programmes for Self Employment
MCRP Maharashtra Rural Credit Project
BPL Below Poverty Line.
NOC No Objection Certificate
DIC District Industries Centre.
PMRY Prime Minister Rojgar Yojana
VTP Vocational Training Programmes.
AMM Annapurna Mahila Mandal
GBF Group Based Finance.
BYST Bharatiya Yuva Shakti Trust
ODA Overseas Development Administration
PFC Project Formulation Committee.
PEC Project Evaluation Committee (PEC)
NSIC National Small Industries Corporation Limited
CSWB Central Social Welfare Board.
NAYE National Alliance of Young Entrepreneurs (naye).
NAWEE National Association of Women Entrepreneurs and Executives.
SBI State Bank of India
IRDP Industrial Rural Development Programme
AWAEK Association of Women’s Entrepreneurs of Karnataka.
KVIC Khadi and Village Industries Commission
AMC Assistance for Marketing Centre
RRC Research and Resource Centre.
IAS Indian Administrative Service.
MRCP Maharashtra Rural Credit Project
SGSY Swarnajayanti Gram Swarojgar Yojana
SLP Special Component Plan
TSP Tribunal Sub Plan
RSVY Rashtriya Sam Vikas Yojana
KSY Krishi Saptak Yojana
NORAD Norwegian Agency for International Development
STEP Support to Training and Employment Programme.
DRDA District Rural Development Agencies
IWEP Integrated Women Empowerment Programme.
EERP Emergency Earthquake Rehabilitation Project.
SUDA State Urban Development Agency
DUDA District Urban Development Agency
MSFC Maharashtra State Finance Corporation
EXECUTIVE SUMMARY
The past decade have seen a growing interest in strategies to enhance the economic status of women, especially in the developing world through promotion of small and informal sector enterprises. This interest on women managed enterprises has mainly focused on sectors such as industry, commerce and services. The number of women moving into these sectors is on the rise because women are of the opinion that there are better prospects in improving their economic standing in these sectors than in the traditional agricultural sector.
The existing scenario is that women form an important part of the labour force and the economic role played by them cannot be isolated from the framework of development. Emergence of entrepreneurships considered to be closely linked with social, cultural, religious and psychological variables. These changes seem to have become acceptable norms in the context of women at work in India today’s with increasing number of women participation in economic development. Women entrepreneurship in India is a recent phenomenon which has come on the scene in the seventies but became more prominent in the eighties especially in the latter half of the decade. The recognition of entrepreneurship as a quick route to socio economic development by planners, the declaration of the international decade of
Women (1975-85) and setting up of a separate ministry for Women and Child
Welfare in 1985 have given a spurt to women entrepreneurship (Sethi 1994). Studies suggest that it is more difficult for women to start and be in business due to lack of opportunities to develop business skills, granting of business credit, domestic responsibilities that make them have a feel of conflict between their roles.
Under such circumstances it is very essential to study the economic independence of women entrepreneur on family especially in case of micro enterprise. Several facets of women entrepreneurship have been probed by different scholars of instance the psychological aspects of entrepreneurial behaviour. Several research has been carried on characteristics, motivation and constraints of women entrepreneurship process and general entrepreneurship, no review of literature revealed the impact of women entrepreneurship on families and also inculcating entrepreneurial and general values in family.
The studies done so far have not touched the low income and women run micro enterprise across several districts of Maharashtra with a similar geographic contours.
Objective of the study were :
1. To study and find the interdependence of women entrepreneurs and
families.
2. To study the impact of women entrepreneurship development on family
with respect to standard of living.
3. To identify the key drivers of economic independence of women
entrepreneurs. 4. To create an independent model with respect to economic
independency of women entrepreneurs.
5. To make recommendations in order to have empowerment of women
especially among disadvantaged group.
Parameters on the basis of which research questions were formed.
1. General information.
2. Information related to Enterprise.
3. Information related to family.
4. Information as to reasons for entering into entrepreneurship.
5. Information about income of self and family.
6. Information about standard of living and change.
7. Information related to interdependence of women on family and their
support for success.
Methodology Adopted :
The study concentrated both on primary and secondary data. The secondary data gave information on the state of Maharashtra and Districts of
Maharashtra.
The primary survey was critical component of the study as it would yield crucial data on the impact of women entrepreneurs on their families from.
o Women Entrepreneur Respondents. o Grassroot Workers. o District Officers (MAVIM). The local of study was Maharashtra State and 10 districts of Maharashtra was selected using judgemental sampling and 500 entrepreneurs were selected using proportionate sampling.
Findings of the Study:
1. Profile of the respondents: Most of the entrepreneurs belong to the age
group between 30 and 40 years, with an upper secondary educational
background and belonging to Hindu Community and most of the
respondents were married.
2. Interdependence of Women Entrepreneur and Family: Major
respondents had entered entrepreneurship to support the family though
they supported the family financially and were economically
independent in the income bracket upto Rs. 5000 but above Rs. 5000
the respondents were dependent on the family and both the groups
were dependent on the family morally.
3. The key drivers for entrepreneurship was monetary benefits as most of
the respondents were from financially weak family background.
4. With the help of the study the independency model was created which
depicts the importance of 4 parameters that influence entrepreneurship
process and help the respondents to become successful and
economically independent.
5. The study also brought to light that most of the respondents have
brought a change in their financial positions thus bringing a change in
the standard of living of their family. This has brought about a positive self esteem in the women entrepreneurs thus proving that there has
been empowerment of women entrepreneurs through entrepreneurship
development which has brought a positive impact on the lives of the
family and improvement in the community and society at large.
Recommendations
1. Requirement of proactive role of government and non-government
organization.
2. Training programme for women entrepreneurship should be more
specific and practical oriented.
3. Formation of professional bodies where the entrepreneurs could come
together and establish linkages for mutual benefit.
4. A database of resource and resource linkages for entrepreneurship
development.
5. Involvement of banks to uplift women through entrepreneurship
development.
6. Better established links among all the organizations working towards
the same objective rather than competition among themselves.
7. Involvement of academicians for change process along with
government and non-government organisations.
Chapter – 1 INTRODUCTION
Development of Entrepreneurship – A Conceptual and Theoretical
Interpretation
In recent times entrepreneurs have been referred to as necessary pre- requisite to mobilize capital, exploit natural resources and create markets to carry on trade (Harbinson and Myers 1984). Entrepreneurs are agents who perform a vital role in the economic development of a country and are linked to the overall industrial development of a nation.
The present concept of an entrepreneur however, has developed through the last two or three centuries and has been defined with subtle variations by different researches in the field of social sciences.
1.1. The Entrepreneur: Origin of the concept:
The word entrepreneur is derived from the French verb “entrepredre” which means, “to undertake”. In the early 16 th century, the Frenchmen who organized and led military expeditions were referred to as
“entrepreneur”. For Cantillon, an entrepreneur was a kind of person who was engaged in production activities and made certain payments to owners of production factories in expectation of uncertain receipts and was bearing non-insurable risks (Aitken, 1965). According to
Haggen (cited in Desai, 1991) an entrepreneur is an economic man who tries to maximize his profits by innovations. Innovations involve problem solving and the entrepreneur gets satisfaction from using his capabilities in attacking problems. The New Encyclopedia Britannica considers an entrepreneur as “an individual who bears the risk of operating a business in the face of uncertainty about future conditions”.
Walrus (cited by Guha 1987) gave recognition to the entrepreneur as an organizer. In 1934, Schumpeter added a new dimension to the entrepreneur. He defined the entrepreneur in an advanced economy as “an individual who introduces something new in the economy – a method of production not yet tested by experience in the branch of manufacture concerned, a product with which consumers are not yet familiar, a new source of raw material or of new markets and the like”.
Schumpeter viewed an entrepreneur as a leader who gets the satisfaction of using his capabilities in attacking problems.
The phenomenon of entrepreneurship is comparatively new. The studies done of women entrepreneurship in taking into consideration the cultural and the characteristics of an entrepreneur. A woman entrepreneur for the present study is a woman who has managed to procure capital to set up a small enterprise and is actively involved in running and managing the enterprise in all functional areas of management and earns a livelihood for herself and her family from the enterprise and belongs to low income group.
1.2. Concepts of Entrepreneurship:
The concept of entrepreneurship can be described as a creative and innovative response to the environment. Such responses can take place in any field of social endeavour, business, industry, agriculture, education, social work, and the like. Thus doing new things or doing things that are already being done in a new way is therefore a simple definition of entrepreneurship. According to Hartman (1959)
“Entrepreneurship is the process whereby people, money markets, production facilities and knowledge are brought together to create a commercial enterprise which did not exist before According to
Schumpeter’s system entrepreneurship is essentially a creative activity. These definitions have been used in many studies to study the characteristics of those who have started business ventures. However, the contributions of these to the understanding of concept of entrepreneurship is not substantial because they have not tried to focus on the critical function of the entrepreneur and so the concept remains elusive. According to Pareek and Nadkarni (1978) entrepreneurship refers to the general trend of selling up new enterprises in a society and is a dynamic function of individual, socio- cultural factors, support systems and the environment. Drucker (1986) illustrates entrepreneurship and intrapreneurship with numerous examples of innovations. Timmons (1986) stated entrepreneurship to be an ability to create and build something from practically nothing.
Sugumar (1996) refers to entrepreneurship as the qualities which are required to innovate and start a new enterprise accept the challenge and bear the risk. In India the term entrepreneurship connotes a restricted meaning. It generally veers round efforts which result in establishing and running factories and industrial enterprise alone.
Moreover, there is a market tendency to relate it only to operations, which exceed a particular size. This narrow overview of the concept perhaps reflects the preponderance of values nurtured by urban white collar class in the society. Secondly entrepreneurship has been viewed as a phenomenon occurring around the individual and benefiting only an individual. It is rarely appreciated as one that could be harnessed to benefit the larger groups. Likewise there is a tendency to view the occurrence only in terms of the total aggregate society. This approach ignores the distinctly varying social environments which confront the large variety of smaller groups and which present both opportunities as well as challenges dissimilar in nature. This consideration of entrepreneurship has also negated the role that the joint family system played in the sphere of economic development. Moreover, it is often not recognized that the process of transformation from the rural and agricultural society to entrepreneurial society, would have to cover all sizes, shapes and types of economic activities. Harbinsen (cited by
Singh 1992) defines entrepreneurship as a skill to build an organization. He spots the crux of entrepreneurship in the ability to multiply by effectively delegating responsibilities to others. He further stresses that the ability to create an organization is the most crucial skill as it facilitates the economic use of other innovations and that in the absence of this skill other innovations fail to stimulate economic development. Thus entrepreneurship is basically concerned with the development and coordination of entrepreneurial functions. Deolankar
(2003) observes that entrepreneurship among the weaker section
Tribal and women who constitute a large section of the Indian masses needs to be brought into the main stream of development.
1.3. Historical Development of Entrepreneurship in India.
1.3.1. Pre-Colonial Era :
The entrepreneurial history of any country evolves within the context of the general economic history of the particular country. Before India came into contact with the West, people were organized in a peculiar type of economic and social system, the unit of which was the agricultural village. The artisans/ entrepreneurs of those times would produce goods that a village would require for its growth. The village life was in no way dominated by towns and it had other than economic linkages with the towns. The towns in India had more of religious importance and were aloof from the general life of the country. The entrepreneurs of this era were effectively protected from the pressures of external competition by the closely knit system of the village economy and this resulted in the absence of localization of industry in
India. Organized industrial activity was evident in a few recognizable products. During this time, neither the economic activities nor the technology was complex enough to require or engender entrepreneurship of high order. But there is no doubt that the functions performed by artisans resembled the functions of their prototype in the modern age (Bisht and Sharma,1991). According to Deshpande (1982) the Indian entrepreneurship in this period was markedly affected by the occupational caste system. The entry into industrial activity was greatly influenced by the caste to which a person belonged. The required skills for manufacturing were inherited from the father. The father’s place of work was the training ground of the new comers.
1.3.2. The Colonial Era:
In colonial era (the beginning of the European commercial activities in
India) the entrepreneur was seen more as a trader cum money lender cum merchant, bound rigidly by caste affiliations and sex, religious, cultural and social forces ranging from the philosophy of ‘karma’ to the system of the joint family (Vinze, 1987). During this period, the Indian entrepreneurs were generally men because of the social norms, which governed the administrative actions and the planning process. The entrepreneurial arena during this period did not provide sufficient scope to entrepreneurs. This part is evident from the migration of large number of traders and money lenders to countries. According to
Tripathi (1971) multiple factors such as the lack of capital lack of political unity, network of custom barriers, existence of innumerable systems of currency regional markets plagued by arbitrary political authority, taxation policies and the low prestige accorded to entrepreneurs by society were responsible for lack of entrepreneurial growth in India. The ‘concepts of entrepreneurship’ prevailing during this era was very different from what we understand today. The prevailing socio-cultural beliefs political and economic factors had a inhibiting effect on the spirit of enterprise among the Indians. Until around the third decade of 19 th century, the existing socio-cultural and religious-economic factors restricted the development of entrepreneurship among both men and women (Patel and Nair, 1996).
1.3.3. The Post-Colonial/ Modern Era.
The first half of the 20 th century witnessed gradual changes in the entrepreneurship scenario. This changing scenario could be accorded to the spread of secular education, rising nationalist feelings and social reform movement. The two world wars also created opportunities for the growth of entrepreneurship. It is since the Second World War that the Indian Economy has been undergoing rapid changes with regard to its industrial polices and the market. The government of India helped entrepreneurs in expanding their venture thereby helping them to earn profits. These measures helped in establishing and extending the factory system in India.
Independent India’s economy was designed from a socialistic perspective. By its very nature such an economic system could not adequately focus on entrepreneurship as a catalyst of economic development. The entrepreneurial scenario in India changed in the
Eighties with globalization and concept of ‘open economy’ The new
Industrial Policy of 1991 promoted and further strengthened the small scale sector thereby, creating a conducive environment for development of entrepreneurship in this sector. A wide range of empirical inquiry on entrepreneurship development has provided theoretical interpretation in terms of the nature, internal dynamics of the function of entrepreneurship that further highlights understanding of entrepreneurship.
1.4. Theories of Entrepreneurship.
The field of entrepreneurship research has expanded considerably over the past two decades. Not withstanding this expansion, dynamics of entrepreneurship is at the rudimentary stage and is quite fragmented. The theoretical foundations of entrepreneurship are still at the pre-paradigm stage. There is an absence of well structured and comprehensive framework despite the existence of various conceptual models. The inter connection of serial entrepreneur antecedents within the theories of entrepreneurship does not seem to be very strong, consequently the explanatory and predictive power of the existing entrepreneurial theories are limited. According to Perry Man, M.R
(1982), entrepreneurship research is presently characterized by the absence of both a definitive set of precepts and a universally accepted methodology process. He further elaborates that entrepreneurial research is in its formative stages and is similar to ‘normal science’ phase of the Kuhnian Scientific structure. However recent entrepreneurial research endeavours have made significant contribution to the knowledge of entrepreneurship and their successful application in mitigating economic stagnation indicates maturity towards paradigm building in entrepreneurship. The importance given to entrepreneurship as a causal variable in the growth process is strongly conditional by different disciplines. The economist view that the genesis of entrepreneurial function is rooted in the structure of economic incentives. The psychologists hold that the risk bearing and innovation as non-materialistic and inner psychic concern are essentially the prime movers for the entrepreneurial activity. For the sociologists, there are non-economic factors or conditions based on society’s value and hierarchy, which determine the extent of entrepreneurial activity (Singh 1985). Thus, the multi disciplinary nature of different factors for entrepreneurship forms the basics for the emergence of different theories of entrepreneurship development. It has been found that there has not been any monolithic approach towards theory building in the field of entrepreneurship. Various scholars have taken multiple approaches to study entrepreneurship as no single factor works as the only determining variable for the phenomenon of entrepreneurship. The theories of entrepreneurship emergence can be classified mainly into four broad categories. The first category falls in the domain of economies, the second one is within the realm of psychology and the third category is based on sociology perspective. The fourth category i.e. the contemporary approach is used to research the characteristics of entrepreneurs.
Among those who contemplate entrepreneurial emergence on the basics of economics are Cantillon, IB say, Walrus, Marshal A.H. Coli.
The psychological theories advocated by Schumpeter et al, McClelland
Hagan and Kunkel. The theories with sociological interpretations are postulated by Weber, Wochran, and Young. The two most common contemporary approaches are the trait and demographic approach as postulated by Robinson, Stimpson, Huefner, and Hunt. However, there are some factors like conducive business environment, political structure of a country or a region, other support systems like availability of finance, and family support which play significant roles in the emergence of entrepreneurship in general and women entrepreneurship in particular. Some recent researches highlight the
‘Integrated Approach’ as the most appropriate to explain the phenomenon of entrepreneurship.
1.4.1. Economic Theories of Entrepreneurship:
The economic theories of entrepreneurship have been described in early economic history as well as within the existing classical and neo classical economic framework. Entrepreneurship as a concept entered the economic literature mainly through the work of Richard Cantillon
(1680 – 1734), who gave the concept an analytical prominence and assigning the entrepreneur an economic role. According to cantillon it is the entrepreneur’s reaction to price movement that continuously bring about a tentative balance between supply and demand in specific markets (Gopakumar, 2008). Cantillon was the first person who coined the term “entrepreneur” and also defined the entrepreneur as one ‘who’ buys factors services at certain ‘prices’ with a view to sell their products at uncertain prices and become a bearer of an uninsurable risk (Desai 1989).The evaluation of economic theories on entrepreneurship can be divided into two schools of thoughts classical economic theories and neo classical economic theories.
1.4.1.1. Classical Economic Theories.
By the mid 18 th century, new forms of production, social relations, governance and social thought began to emerge. In the economic stream, this phase marks the rise of classicism. I.B Say (cited by
Aitken, 1965) identified the entrepreneur as an organizer. According to him, the entrepreneur is an economic agent who unites all means of production and produces a socially valuable product. In order to be successful, say mentioned that the entrepreneurs must have the ability to assess future demand (a factor of judgement) to determine the appropriate quantity of goods and their timings (market research and analysis) to calculate probable production costs and selling price and to possess the art of administration (management). Say added the concept of management in a form with which modern industry is familiar.
1.4.2. The Neo Classical Economic Theories:
The entrepreneur is rarely studied within the context of the basic neo- classical framework of economic. Brock and Evan (1989) mention that economists have concentrated overwhelming on large business.
Recent textbooks in economics have little discussion of small business and entrepreneurship. C. Kent (1990) points out that courses in entrepreneurship and economics seems to be lacking. This is probably due to the failure of economists to adequately integrate entrepreneurship into economic theory. Herbert and Link (2009) believe that the history of economics clearly demonstrates that the entrepreneur was gradually excluded from economic analysis when economists attempted to emulate the physical science by incorporating the mathematical method. As there was no satisfactory mathematical method to deal with the dynamics of economic life, economic analysis solved by concentrating on comparative statistics, and the entrepreneur took a purely passive role J.G. Eisenhaver (1995)). The entrepreneur, thus in the new classical framework is a mere spectator with no real scope for individual decision making. A few thinkers however, kept the interest in entrepreneurship alive in limited ways, the most important of these being Alfred Marshal (1980).
1.4.3. The Psychological Theories:
The initiation of entrepreneurial study and the process of setting up a new venture involved assumptions about psychological characteristics of the entrepreneurs. Despite conducive economic circumstances, social networking, support system, entrepreneurial teams, finance, marketing and government policy, enterprise, sometimes cannot be created. It requires a ‘person’ who can combine all these factors in a productive manner, who believes in innovation or meta innovation and who has the motivation to accomplish the goals. For a person and his process to be successful definite psychological perspectives are essential. Flood (cited in Priyadarshi, 2007) describes an entrepreneur as a person who initiates and manage new ventures. The theorists who have emphasis the contribution of psychological factors to entrepreneurship are Schumpeter (1934), Mc Clelland (1961), Hagen
(1962) Kunkel (1965).Schumpeter’s Theory – Joseph Schumpeters
(1934) theory provides the most thorough analysis of the entrepreneurial function. The analysis of Schumpeter’s theoretical system is based on three basic assumptions (a) the nexus between entrepreneurship innovation and leadership in his theory of economic development (b) the relationship between the entrepreneurial function in the analysis of social classes and (c) the facing away of the entrepreneur as a key in explaining the crisis of capitalism (Martinelli
1994). The theory further stresses that the key variable to entrepreneurial function is innovation. Innovation is defined as the introduction of a new combination of the factors of production i.e. land and labour when combined with credit, breaks into the static equilibrium of the circular flow of economic life and raises it to a new level. The entrepreneur changes the conditions of supply, combines exis0ting resources in new ways, and thereby set ups a new production function (Martinelli 1994). The Schumpeterian entrepreneur is an economic leader motivated by a will to achieve, having an inherent capacity to select correct answers, energy and capacity to withstand social oppositions (Dhillon, 1993).
Mc Clellands Theory : According to Kilby (1971), David Mc Clellands theory has developed from Weber’s protestant ethics in which an intermediary psychological motive (the need for achievement) is introduced. Mc Clelland extends Webers’s casual sequence producing entrepreneurial behaviour as follows.
Ideological Entrepren eurial Values Behaviour
(Webers casual sequence)
Ideological Family Need for Entrepreneurial Values Socialisation achievement behaviour
Fig. 1.1 – Mc Clellands Theory Source: Peter Kilby, Hunting the Heffalump (1971). Mc Clelland has tried to offer explanations for some societies that were more likely to produce entrepreneurs than others. He appeared concerned with the influence of cultural attitudes in primary socialization which in turn can foster entrepreneurial altitudes. He ascribed inculcation of the achievement motive to child rearing practices which stress on standards of excellence, low parental
(father’s) dominance, maternal warmth and self reliance training
(Martinelli 1994).
Hagen’s theory: Hagen’s Theory (1962) is more sophisticated in terms of the relation between socialization and entrepreneurial personality and has its own importance in the emergence of entrepreneurship.
Hagens model combines a psychoanalytical interpretation of the entrepreneurs personality with an analysis of his conditions as a member of a group that is deviant from the cultural norms of the larger society. As an economist Hagen’s view of economic development was based on non-economic factors. According to him, economic development is almost exclusively a process of technological change, which is brought about by the technological creativity of individuals in society.
The main focus of this theory is on the authoritarian creative personality dichotomy. He postulates that the complex changes separating the typical authoritarian personality of a stable traditional society from the emergence of a creative entrepreneurial activity .
Traditional Authoritarian Non-innovative child rearing Anger/ Anxiety personality
Relative Social blockage
Mothers rejection of father and husband, Father & Husband Creative son protective protective nurturance
Suppression of Entrepreneurial values behaviour Fig. 1.2 – Hagen Theory nurture
Source: Peter Kilby, hunting the Heffalump 1971.
Motivation plays a significant role in planning of socio-economic change (Pareek, 1968) and that motivation alone cannot bring about change unless accompanied by perceptible change in the societal system. A term borrowed from the Atkinson’s model shows that expectancy is necessary and the societal system provides the expectancy frame. An elaboration of the paradigm is as follows.
Societal system Motivation (Values) Reinforcing
Mechanism Expectancy Behaviour
Fig. 1.3 : Atkinson’s Model
Source: Peter Kilby, Hunting the Heffalump (1971). Entrepreneurship and Economic Development Free Press, New York.
Along the same lines, young (1971) found that entrepreneurship occurs when a group has a low status, has been denied access to mainstream society but still has more resources than other marginal groups. Shaperol (1975) generalizes that most entrepreneurs are displaced persons who have been dislodged from their familiar niche.
Perceived desirability culture, family peer colleagues mentors.
Perceived feasibility Exogenous Intentions Entrepreneuria by financial support. Inferences Demonstration effect credibility l behaviour model partner
Propensity to act. Precipitating Displacing Event
Fig. 1.4: Shapero’s Model Source: Kilby, Hunting the Heffalump (1971). Entrepreneurship and Economic Development Free Press, New York.
Even in Shapero’s model the displacing event plays an important role for entrepreneurial behaviour along with desirability feasibility and propensity to act.
Kunkels Theory: Kunkels Theory (1965) of entrepreneurial study is based on the behaviouristic model and emphasizes behaviour of the individual. Unlike Moung’s (sociological treatment) ways of looking at the school of psychic needs and values as passive phenomenon reflecting group level activity, Kunkels theory moves in the opposite direction values and personality types are explained on the basis of the behavioural pattern from which they are inferred. In his model, behaviour patterns are determined by reinforcing aversive stimuli present in the social context. The rewards and punishments are limited and based on the child rearing period. Therefore Kunkel’s views on entrepreneurial behaviour are a function of the surrounding social structure both past and present and can be influenced readily by manipulable economic and social incentives. His model of analysis is based on experimental psychology and identifies sociological variables as the determinants of entrepreneurial supply (Dhillon, 1993) which is put in the
Physiological SSC. Societal context SV Characteristics
SD
Or R
r a S S Or S
(Discriminative Behaviour Reinforcing stimuli Controlling Stimuli) S o
Fig. 1.5: Kunkels Theory
Source: Peter Kilby, Hunting the Heffalump (1971). Entrepreneurship and Economic Development Free Press, New York.
Where R = any activity
Sr = reinforcing stimulus (like rewards)
Sa = aversive stimulus (like punishment)
So = absence of any consequences
(rewards or punishments).
SD = Stimulus in whose presence R has been reinforced
S = Stimulus in whose presence R has not been reinforced
SV = State variable (i.e. conditions of deprivation
and Satiation).
According to this model, an individual’s behaviour pattern is shaped
(established by means of operant conditioning procedure involving the differential reinforcement of activities) after they have been performed.
Only certain activities desired by a society or a group are positively reinforced and others may be punished. Positive reinforcement enhances the probability of repetition and if such reinforcement is frequent and intermittent, the probability is a certainty and this is explained by the diagram of Kunkels behaviour model.
1.4.4. The Sociological Theories:
The sociological perspectives and research provide essential and distinctive contributions to the understanding of entrepreneurship in various ways. Sociologists consider the entrepreneur as a role performer corresponding to the role expected by the society. Different societies are characterized by different customs and taboos, rewards and restraints ethnic values and child rearing practices, nationalistic attitude and patriotic inculcation and different ethics. According to
Marris (cited in Priyadarshi, 1997), to assemble or reassemble from what is available very concrete kind of imagination, to see what others have missed, sensitivity to business and social environment and entrepreneurial courage are the factors that make an entrepreneur.
The theorists who have stressed on the contributions of sociological variables to entrepreneurship are Wiber (1960), Cochrom (1965) and
Young (1971).
Max Weber’s Theory: Webers (1960) theory involved four conditions contributing to entrepreneurship: rational capital accounting involving the appropriation of all means of production as disposable property of autonomous private industrial enterprises, free and voluntary labour, rational technology and mechanization, public credit and freedom of the market. These conditions were studied by Weber, as a complex, of inter-related institution. Weber also added the analysis of cultural factors, which become effective conditions for the emergence of capitalism. In other words Weber studied the phenomenon of profit making and free wage labour in terms of cultural and motivational significance. (Martinelli 1994).
Cochran’s Theory: Cochran’s Theory (1965) is based on the premise that fundamental problems of economic development are non- economical. He emphasized role expectations, social sanctions and cultural values as key elements that determine the supply of entrepreneurs Cochran (1965) does not see the entrepreneur as being deviant or super normal individual, but rather as a representation of society’s model personality. In this model, the prevailing child rearing practices and schooling common to a given culture mould personality.
The individual performance as an entrepreneur is generally influenced by three factors (a) his own attitude towards his occupation (b) the role expectations held by the sanctioning groups (c) the operational requirements of the job.
Young’s Theory: Frank Young’s theory (1971) shares a commonality with Cochran’s theory with regard to the unimportance of personality factors but does not focus on values and society wide phenomena like
Cochran. Young’s theory focuses on the inter group relations. It is a theory of change based on incorporation of reactive sub-groups in society (Dhillon, 1993).
1.4.5. Contemporary Approaches.
The two most common approaches used in researching the characteristic of entrepreneurs have been the trait approach and the demographic approach (Robinson et al, cited in Balakrishnan et. Al
1998). In the trait approach, the entrepreneurship is assumed to be a particular personality type whose characteristics are key to explaining entrepreneurship as a phenomenon (Gartner, 1988, 1989). In the second approach i.e. the demographic approach, demographic information is used to arrive at a profile of a typical entrepreneur assuming that people with similar backgrounds possess similar underlying stable characteristics.
Chapter – 2 LITERATURE REVIEW
2. Studies on Entrepreneurship: A brief Review :
From the discussion of major and contemporary perspective, an attempt can be made to explore the applicability of such theorization into empirical enquiries with regards to western as well as Indian studies that would help to develop a theoretical framework for the present study. According to Hornday, the Churchill (1987) the accumulation of past research has produced sufficient empirical data to allow some development of theoretical concepts.
The existing literature can be grouped into four broad categories. The first which is not really concerned with theory focuses on a definition of the word
“entrepreneur” which has been discussed in the proceeding pages. The second category is the literature on entrepreneurship in western countries. A third category of literature refers to the studies done on entrepreneurship in general in Indian context. In fourth category there are studies dealing specifically with women entrepreneurs in the Indian context. Finally studies dealing with women entrepreneurs from low income group.
2.1. Western Research on Entrepreneurship:
The early researches on entrepreneurship was carried out by McClelland
(1969 and revealed that individuals with personality characteristics, which are indicative of high need for achievement are likely to behave entrepreneurially.
He regarded the following as distinctive characteristics of high, need achievement (i) a performance for moderate risks and a propensity to work harder in such situation (ii) a belief that one’s personal efforts will be influential in the attainment of some goal and pleasure derived from this belief. (iii) A tendency to perceive the probability of success in attaining a goal as being relatively high, (iv) a need for feedback regarding success or failure of one’s efforts (v) the capacity to plan ahead and to be particularly aware of the passage of time and (vi) interest in excellence for its own sake.
The study by Collins and Moore (1964) after interviewing 150 small business entrepreneurs at Michigan reported that (a) most of the entrepreneurs were orphans or half orphans (b) entrepreneurs lack social mobility drives. They have no attraction towards posts of authority and rewards associated with power and status (c) they indulge in punishing pursuits of task and choice fatigue, when one job is done, they like another to conquer. (d) They lack problem resolution (e) they categorize subordinates as either good or bold (f) they rebel against peers and parents, generally strained with partners but good with those outside the business (g) they are independent and (h) they don’t like authorities above them.
The studies focusing on personality characteristics of entrepreneurs found that older entrepreneurs take no risk option more frequently than the younger entrepreneurs. The fear of failure hinders their decision to take risks (Winich
(Cited by Dhillon, 1993). Hornaday and Abond (1971) analyzed a number of characteristics such as achievement, autonomy, aggression, support, conformity, recognition, independence, benevolence and leadership which were felt to be significantly associated with entrepreneurs. The research found that out of these characteristics, need for achievement, support, independence and leadership emerged as most significant.
The study by Decarlo and Lyons (1979) on the personality characteristics of minority and non-minority female entrepreneurs revealed that both minority and non-minority entrepreneurs differed significantly from those women who were not entrepreneur on tests measuring achievement, autonomy, aggression, conformity, independence benevolence and leadership.
Differences were also obtained between minority and non-minority women entrepreneurs with minority entrepreneurs reporting that they started their business at a later age than non-minority women entrepreneurs. The non minority entrepreneurs scored higher on ratings of need for achievement and independence. The minority women entrepreneurs placed greater value on conformity and benevolence.
Mc Irish (1982) (cited by Churchill, N.C. 1987) g model and locus of control
(LOC). He reviewed research relating LOC, to decision making and LOC (as measured by Rolters Internal – External locus of Control scale) to portfolio risk. LOC and portfolio risk were examined in combination with sex, marital status, age, educational level, asset level and number of value of common stock held. The LOC and portfolio risk relationship were also considered. The distribution of both LOC scores and portfolio risk scores were positively skewed. There was a positive relationship between portfolio risk and the standard deviation of portfolio risk of the securities in the portfolio. Age, assets and values of common stocks held were also significant determinant of risk level.
The study by Sectan and Kent (1981) (cited in Bhanushali, S.G. (2007) revealed the younger female entrepreneurs were better educated and placed slightly higher emphasis on profession than their families. They also compared characteristics of female entrepreneurs and executives revealed that female entrepreneurs were only slightly less educated than female executives. The executives view their ability to work with people as the greatest factor in success, while entrepreneurs viewed hard work and persistence as more important. Entrepreneurs tend to follow their fathers who are engaged in business although they do not acknowledge their fathers as role models. Female executives do not follow in their fathers footsteps. The executives were older and showed more job stability than entrepreneurs. The characteristics of female entrepreneurs are different from female executives.
Cromie and Johns (1983) measured psychological and entrepreneurial characteristics. The study indicates that new aspiring entrepreneurs possessed unique personal characteristics. But that after some years of managing one’s own business, entrepreneurial qualities diminish and established entrepreneurs begin to resemble career executives. The study concluded that the skills necessary to enter the growth and development of an enterprise may be different from those required to conceive and launch a business.
An indepth survey was carried out Hisrich and Brush (1984) on women entrepreneurs and profiled the ‘typical’ women entrepreneur. According to them, a women entrepreneur is generally the first born child of middle class parents with a self employed father and a mother who does not work outside home. The typical women entrepreneur after obtaining a literal arts degree, marries a college educated man who work in a professional or technical occupation, has children and works as a teacher, administrator or a secretary.
The biggest start up problem faced by her is finance, credit and lack of business training. Her greatest operational problem is lack of financial planning experience.
Durang (1983) (cited by Bygrave, W.D. & Hofer C.W. (2005) has found that need achievement training for achievement-motivation (NACH) has been limited to programme person who could afford the time and monetary costs of the longer training sessions. He found that a substantially shortened training design when combined with skill training, demonstrated many of the effects and benefits of the original need for achievement training among the sample studied.
The analysis of women entrepreneurs by Goffe and Scase (2008) shows how business start up enables many women, but not all, to achieve forms of economic and social independence that they would not otherwise enjoy.
Further they illustrate ways in which business proprietorship has a wide variety of effects upon individuals, and upon their personal relationships and lifestyles. They refute the notion of a single entrepreneurial experience and argue that the causes and consequences of business start up are highly conditioned by the excellent to which women are committed to traditionally prescribed roles and to profitability.
Exploring the life events and experiences that had influenced women to choose entrepreneurship as a career alternative Huntley (1985) indicates that women entrepreneurs were determined hard working and self-confident.
Inspite of having faced financial hurdles, their determination, courage and optimism helped them to overcome these hurdles. Most of women ventured into entrepreneurship because of a desire to be independent and to be in control of their lives. They defined their own measurement of success, i.e. succumbing to social expectations and definitions. They were looking for a balance of personal and professional interest and admitted to career satisfaction which transuded other aspects of their lives.
A biographical study was done by Williamson (1986) on depth Joyce Eddy, a successful women entrepreneur in order to provide a role model for existing and would be women entrepreneur. The result showed that Joyce’s percentile score were more like those of general population and that she was successful despite her short comings with regard to personal characteristics and requirement, often equaled with entrepreneurial success. It was therefore concluded that there is no one formula for entrepreneurial success.
Mc Clung and Parkar (1986) carried out a study on female entrepreneurs in
Oklanoma to identify associations between entrepreneurial characteristics and financial performance. The findings of confirmatory and exploratory analysis indicated that there was some association between entrepreneurial characteristics and financial performance.
The study by Donckels and Dupton (2009)) found that small firms generate more new entrepreneurs in Belgium than larger firms, and that such entrepreneurs often have an entrepreneurial family background. The study also found that (a) in recent years there has been a substantial increase in the number of unemployed starting their own business (b) start up capital was mostly low (c) government support hardly had any importance at all (d) almost half of the new entrepreneurs were employed in private industry before starting their own enterprise.
Bowen and Hirrich (1986) have developed a comprehensive career model
(determinants of entrepreneurial behaviour for women) that adopts a career perspective and life cycle approach to entrepreneurial career in terms of educational environment, work history, adult development history, adult family work history, current work situation and current perspective family/ non work situation.
The study by Mc Donald (1986) identified traits and characteristics of women entrepreneurs and compared the perceptions of successful women entrepreneurs with those of the less successful ones. The survey method was used to question the responder on demographics, traits and characteristics. A
Likert type scale and a demographic survey of 519 women entrepreneurs concluded the following (a) Net Profits is a factor of success in the opinion of more successful women entrepreneurs and not in that of less successful ones
(b) length of time in business is a predictor of success. (c) successful women entrepreneurs perceive the same traits and characteristics necessary for success (d) Having entrepreneurial parents does not affect the success of women entrepreneurs.
Hisrich (1986) developed a theory on women entrepreneurs career. The analyzed data reveals demographic information, motivations for beginning the business venture, management skills and personality traits, business problems. The authors state that while the backgrounds of self employed women vary considerably the women entrepreneurs do share similarities in personality, motivation, education and family background. The majority of women entrepreneurs are first born children from middle or upper middle class family in which the father was self employed. Education was an important factor for the upbringing of most of the women entrepreneurs, and it continued to play a major role in helping them to cope with deficiencies in their business skills.
The development of entrepreneurial characteristics and career selection tendencies of individuals using social learning theory to investigate the effects of parent entrepreneurial role models was undertaken by Schwartz, E.B.
(2008). The impact of role model was studied on a set of entrepreneurial characteristics like achievement, motivation, risk taking propensity, innovation and locus of control orientation.
Birley, S (2009) study on women and men micro entrepreneurs in Ecuador confirms that male entrepreneurs manage larger firms than women and men’s businesses yield higher net incomes. There was a significant increase in monthly net incomes of the entrepreneurs one year after the baseline measures. The result also confirms the dynamism of the micro enterprise sector, where some firms are able to increase net income in the course of a year, despite a lack of access to credit and other inputs available in then formal sector. All micro producers and micro vendors’ borrowers, irrespective of borrower’s sex show a significant increase in hourly income. The results also show the preference among women entrepreneurs for using the credit to increase efficiency is explained by women’s two fold responsibility of producing at the work place and producing at home. The results are also indicative of the fact that women micro producers in manufacturing and services as well as women micro vendors access to credit was a key factor in the increased productivity. This signifies that credit was available to large number of low income women micro producers and micro vendors and was able to keep a considerable number of women micro producers active.
Dignard and Havert (1995) study the women owned micro and small scale entrepreneurs in both formal and informal economic sectors. The study is a compilation of articles and case studies by various authors and focuses on understanding women micro entrepreneurs economic values and behaviour, gap in policies and programme with regards to micro enterprises, problems of women’s access to credit technology and training which are essential for designing women owned micro and small scale enterprise, and general policy interventions. Case studies of five countries are also discussed in the book.
Wolfensohn, J.D. (2008) investigates whether the acquisition of greater skills, resources confidence and social position through repeated micro-credit borrowing might reduce the effectiveness of mechanisms which promote repayment based on the experience of Bangladesh Rural Advancement
Committee, the author suggests that a micro-credit intervention, based strongly on incentives for individuals self enrichment alone, eventually undermines the social forces including repayment by changing the incentives and costs associated with honouring the financial contract.
The study by Hansraj (2009) discusses two innovative approaches to fostering group entrepreneurship to address the urgent employment and income needs of urban and rural workers in developing countries and countries undergoing privatisation and structural changes. The study concludes that group entrepreneurship provide the basis for a dynamic employment and enterprise development strategy.
Micro enterprises are no longer a means by which the poor scrape a living.
They can become an integral part of the economy, providing jobs and contributions for economic growth. Berger and Giullamon (2006) describe the variety of ways in which banks and NGO’s are attempting to provide sustainable basis.
Stemper (2006) examines the experience of a group of commercial banks catering to micro enterprise women clients. The results indicate that a small number of commercial financial institutions are expanding the coverage and depth of financial services to these businesses, both at the wholesale and retail levels, and could act as leaders in the provision of financial services to the micro enterprise sector, and specifically women entrepreneur. Rather than focusing on one specific type of institution as the viable alternative, the overall supply of financial services to women micro entrepreneurs – credit for enterprise and household investments, savings and payment services comes from a variety of institutions including NGOs, banks credit unions and other formal and semi formal financial intermediaries. The study further concluded that less flexibility was found in loan repayment for banks than NGO’s. The
NGO practices indicate that schemes adjusted to women owned micro enterprises use more frequent payments, or set payments in a more flexible way. They also found relative absence of trust between banks and private or government institutions involved in micro enterprise development. The banks have identified awareness building in high ranking executives, in addition to technical staff, as an important way to become active in micro enterprise lending.
Marrison, A.M. White R.P. and Velsor, E. Van (2007) observe that female entrepreneurs are the fastest growing segment of the small business population, with numbers increasing dramatically since 1980.
A framework to assess the attitudes of low income individuals towards entrepreneurship on the basis of a survey of the residents of a public housing in a major south western city in the United States was developed by Hood and
Young (1997). They concluded from the study that business creation and entrepreneurship represent one possible tool for addressing the poverty paradox on a long term basis. Entrepreneurship education and training form a vital component within an entrepreneurial infrastructure which is required to successfully launch enterprise in any community.
In a study of women entrepreneurs in Cameroon by Catherine (2008) revealed that a poor choice of business venture often meant that they run at a loss. However many women value their business for non-financial reasons, such as the fact that they get them out of the house. Though women running micro enterprise face long hours with low returns and often accumulate debts they are critical for the survival of their households.
Vander, Weisc Ramijn H (2005) discuss the impact of micro finance industry becoming a global phenomenon. The study examine the financial products aimed at women entrepreneurs and calls for more products such as savings accounts, money transfers, or loans for domestic equipment. Financial services should be delivered as effectively as possible, but subsidies may continue to be a necessary component in achieving this. The SHG continue to play a strategic role in the development of micro enterprises among women entrepreneurs.
The study by Choudhury (2000) conducted on light engineering firms in
Dhaka reveals that the entrepreneurs not only produce spare parts but also build up the base for potential entrepreneurs. To maximize the economic welfare and to become self employed these entrepreneurs took initiatives that in most of the cases were not in their family traditions. The entrepreneurs demonstrated strong willingness and had managerial capability. They were aware of the necessity for improving the quality of their products and towards this end they attempted to adopt new production processes. The process of production in these enterprises was labour intensive and utilized capital more efficiently. They received little support from the government with regard to credit and other facilities. Development institutions has done little to improve their quality, technology and marketing facilities. Only those who succeed were able to take advantage of whatever opportunities were available.
The study by Rutherford (2000) attempts to clarify the situation by defining all financial services for poor people as means of turning their savings into usefully large lump sums to meet needs arising from life cycle events and from emergencies to invest in land productive household assets and in business. 2.2. Indian Research on Entrepreneurship:
The Indian research on entrepreneurship have heavily focused on small scale sector entrepreneurs from various parts of the country. The study by Gaikwad and Tripathi (1970) on small entrepreneur of the Janku region of the West
Godavari district in A.P. brought out the prerequisite for successful entrepreneurship. The study found that all entrepreneurs were persons with initiative, drive and hard work, though the majority of the entrepreneurs had neither technical knowledge nor strong economic base or strong political connections. Moreover among the entrepreneurs studied, very few had an idea of the work involved and the relevant government policy. The study also brought out an interesting finding regarding the opinion of traders about industrial entrepreneurship. The traders interviewed were of the opinion that industrial entrepreneurship had a lot of scope and better status but it required a large capital outlay, high managerial and organizational skills and technical knowledge. It was difficult for traders to venture into industrial entrepreneurship as it involved a long gestation period before obtaining terms.
Nandy (1973) also carried out an intensive study by comprising a group of small scale entrepreneurs with non-entrepreneurs from Howrah in West
Bengal. The objective of his study was to draw a comparison between enterprising and non-enterprising cultures. The study revealed that in a enterprising community, entrepreneurial exposures contribute substantially to entrepreneurship and that such a phenomenon was an important determinant of entity and survival in business. The need for achievement was found o b e the best predictor of entrepreneurial motives, followed by need for power and a sense of efficacy. The significant association between need for power and entrepreneurship is surprising as it goes against the popular belief.
The study by Bhatia (2004) on 50 small manufacturing firms comprising of less than 50 employees located in the state of Punjab examined the socio- economic background of entrepreneurs, their attitude towards industry, the ways in which they made transition to industry and the problems they faced in establishing and building up their entrepreneurs. The research findings showed that entrepreneurs established their business in various sectors like service, trading, manufacturing and agriculture. The research analysis showed no relationship between growth of firms and socio-economic background of the entrepreneurs. The study revealed that firms which continuously expanded, had a gradual growth and were started with a relatively favourable capital base were mostly established by merchants. The entrepreneurs showed a tendency to diversify instead of expanding after a point and the researcher suggests that this was because of the lack of vital information about wider markets.
Nagporewalla, Dr. G.B. (2008) also studied entrepreneurs from small-scale manufacturing enterprise in Visakhapatnam, A.P. He found that a highly disproportionate number of entrepreneur, especially the successful ones were from higher castes and from high economic status families. The study further suggested that the socio economic class status of businessmen were substantially higher than that of the general population not only in India but probably also in a larger part of the rest of the non-socialist world.
A change in the trend was noticed in entrepreneurial research from the late seventies the focus of the studies were now on entrepreneurial characteristics and their relation to various demographic variable like age, education, family background etc.
Bhattacharjee and Akhouri (1975) empirically tested the entrepreneurial characteristics and developed a profile of a small industry entrepreneur. The study found that the most significant characteristics appeared to be the need for achievement, power, independence, propensity to take risk, personality modernity, business experience leadership, lack of social mobility and symbolic or actual rejection by father. The factors which were empirically tested but not statistically supported, are autonomy, aggression, conformity, recognition, benevolence innovativeness, occupational background caste, family background, age and education.
The study by Sharma (1976) on the inner state patterns of entrepreneurial performance between the states of Punjab and Uttar Pradesh revealed that inter state variations in industrial climate give rise to variations in entrepreneurial performance and better that climate the better world be the performer and that the socio-economic background of the enterprises matters for entry into manufacturing. This has been affirmed by the study (in Dhillon
1993).
Ansari & Ahmed (2007) analyzed the relationship between risk taking behaviour and age among entrepreneurs. The late entry of entrepreneurs into business having a higher level of education could be on account of two reason. First on account of the time they were required to spend on education and secondly on account of their failure to get another job which maintained parity with their higher educational qualifications.
Venkatapathy R (2006) using purposive sampling technique studied 75 first generation and 58 second generation entrepreneurs. The results of the investigations suggested that first generation entrepreneurs perceive the father as a loving person and parents as encouraging and overprotective.
They are influential by the father attribute greater importance to friendship, initiative venture to promote self employment, desire to be a model to others.
They consider social awareness and involvement as essentials for a business venture which are the second generation entrepreneurs perceive the father as being dominant, are not influenced by any one, attribute least importance to friendship adopt a venture to avoid unemployment consider social awareness and involvement as not essential for a business venture.
Venkatapathy and Subramanians (1988) study reveals the entrepreneurs feel less alienated than non-entrepreneurs because entrepreneurs have more chance to experience power and that their ventures are often by choice, which gives them satisfaction, a sense of achievement and a feeling of relevance of their role in society.
Case studies of four self employed persons, with scheduled tribe background was carried out by Gupta and Sharma (2007). Out of the four cases two opted, for self employment due to family tradition of living on one’s own without going for job. The other two entrepreneurs preferred to be entrepreneurs after having been dissatisfied due to exploitation by employers.
The study by Deivasenpathy (1986) on 45 entrepreneurs from sick units and
53 entrepreneurs from successful units found that family support and previous job experience influence success, whereas educational level and family background do not have an influence on the entrepreneurial venture.
The extension approach, as a phenomenon was used by Kanitkar (1994) to discuss that in developing economies like India, Microenterprise is a source of self employment and income for rural youth. The study reveals that the micro enterprise program implementation institutions maximum potential can be tapped by encouraging innovation, organization flexibility, the impact of training on entrepreneurs. After examining the results of planned training interventions it is argued that lack of ‘extensive approach’ in the industrial promotion agencies and support systems seems to be the major causes of failure of trainees to establish business cultures. He therefore suggests integration of the approach in the functioning of promotional agencies. He revealed the experiences in organizing a training programme aimed at motivating the officers of the industrial support system. The review concludes that if the external environment is to be influenced and the human component of the industrial support system to be sensitized then it is essential to integrate the extension approach in the entrepreneurship development activities.
2.3. Studies on women entrepreneurship in Indian context.
The studies on women entrepreneurship became prominent from the 1980’s when the focus of development shifted from women the ‘objects’ to ‘subjects’ of development. Surthi and Sarupriya (2003) investigated the psychological factors affecting women entrepreneurs. They examined the role stress experienced by women entrepreneurs the effect of demographic variables, such as marital status and type of family, and how women entrepreneurs cope with stress. The results indicated that unmarried women experienced less stress than married women. Those from joint families tended to experienced less role stress than those from nuclear families, probably because they share their problems with other family members. External focus of control was significantly related to role stress, and fear of success was related to result inadequacy and role inadequacy dimension of stress.
According to Mohiuddin (2006) women (in his study) became entrepreneurs due to the following reasons. (a) Economic needs. (b) As a challenge to satisfy some of their personality needs (power, achievement novel experience etc. (c) Educated women like to utilize their knowledge gained. (d) Family occupation and (e) As leisure time activity women face the same difficulties as those by men.
Certain studies like Singh and Sengupta (1986) on women entrepreneurs have been on entrepreneurs attending entrepreneurship development programmes. The conclusion drawn by Singh and Sengupta (1986) revealed that the profile of a women entrepreneur was not dominated by either education or lack of it. Educated women perceived entrepreneurship as a challenge, ambition fulfillment and for doing something fruitful, whereas less educated entrepreneurs had clarity about their projects but needed moral support from males and other family members for setting up their enterprises.
Shah’s (1987) study was based on three categories of sample (i) women entrepreneurs of middle and high middle income groups including working women and housewives. (ii) women entrepreneurs having science and technology background and coming from middle and lower middle income groups and (iii) women entrepreneurs of low income group coming form the lower strata of society. The data analysed revealed that the distinctive features of women entrepreneurs in all the three categories were needed for achievement self sufficiency in terms of internal and external resource awareness, initiative taking, problem solving and risk taking. Among the motives to become an entrepreneur were economic needs which was an important motive in the low income, utilization of experience and education was reported by women with science and technology education, husband’s/ family support and interest, availability of full time and finance, desire to be independent and personal ego satisfaction of doing something on one’s own were expressed b y women in all groups.
Singh, Sengal, Tinani and Sengupta (1986) carried out an exploratory study of successful women entrepreneurs examined their identity, expectations, motivations, types of problems encountered by them to reach the level of success and to identify the operational problems they were confronting. The sample comprised of 60 successful women entrepreneurs from in and around
Delhi. The analysis indicates that there is quite a large variation in age, educational qualifications, marital status, type of family, age of children and occupation of family members of these successful women entrepreneurs. The five dominant motivating factors rank wise were to keep busy, to fulfill ambition, to pursue own interest, by accident or circumstances beyond control and to earn money. The main factors responsible for the choice of product were high demand, processing skills, ready market future prospects and requiring creativity. Majority of the entrepreneurs felt no role conflict between family role and entrepreneurial role.
The study by Vinze (1987) was an empirical study of 50 women entrepreneurs of Delhi. Her study gave a first hand report about their perception of the prospects and future of their enterprises, problems faced, their involvement in the enterprise and effects on family life. The study point out that women lacked confidence to start their own ventures, Social pressure and attitude of doubling women’s capability and restricting their freedom of movement were found to be yet another hurdle. Financial organizations were also held responsible for not encouraging women entrepreneurs. The analysis revealed that the fifty women entrepreneurs studied felt that the future prospects of their enterprises were bright. To the query as to which trade or enterprise has bright future all mentioned only those enterprises in which they themselves were engaged. In spite of the fact that they were educated most of the entrepreneurs were ignorant of government organizations that could help them. With regard to credit facilities and loans almost all of them felt that such facilities were available only on paper but in practice there were too many problems such as nepotism, favoritism and corruption. All the women on becoming entrepreneurs felt economically secured and independent.
Iyer (2007) did a qualitative study on women entrepreneurs from AWAKE
(Association of Women Entrepreneurs in Karnataka) and highlighted two major issues relating to starting and sustaining a business. The first is perception of society, in particular those of men, towards women as entrepreneurs and the built in gender bias. She found that traditional upbringing hampers the ability of men to relate to women as business women.
In India, women take up entrepreneurship due to various reasons and not essentially economic independence or to gain freedom from subordination in the family. With regards to role conflicts and role demands, while women do not draw any boundaries with their own families, strict boundaries are drawn around their mobility and activities outside the family. Another conflict which entrepreneurial women go through is the guilt feeling as career women. The credit worthiness of women were essentially linked to their ability to provide collateral. The reluctance to provide assistance, delay in the release of working capital by the commercial banks also cause considerable problems to the entrepreneur. She also revealed that when “AWAKE raised these issues, they were considered women’s issue and not entrepreneurial one.
Kanitkar and Contractor (1992) studied women entrepreneurs in the manufacturing sector. The study discloses that for the women their sector it has been “the search for identity during the period of mid-life crisis” which has lead them to entrepreneurship. Though for some of the entrepreneurs, economic necessity was the push factor, all of them were imbibed with a goal to achieve something significant in their lives. The first major hurdle which they faced was monetary followed by dealing with bureaucracy location, managing production and employees growth.
The study by Anselm (1992) studied female entrepreneurs in three cultural milieu. Hong Kong, Madras (South India) and Toronto (Canada).The study highlights the facts that despite marginal earnings, entrepreneurship had helped these women evolve from positions of relative subordinates to carefully carved niches of self determination social maturity, and fulfillment within the arenas of both economic and social progress. Their day to day interactions with members of their families, co-workers and business associates had given these women a sense of power, importance and above all self esteem.
Singh (1992) attempts to highlight the existing status of women entrepreneurs. The author has also made an attempt to diagnose the women entrepreneurial profile and has identified the dominating entrepreneurial traits, their motivational forces and performance both qualitatively as well as quantitatively. Their communication and linkage capabilities among themselves and at the government level along with the nature and magnitude of different constraints in entrepreneurial career have been also dealt with by the author. The sample consisted of 64 women entrepreneur from Haryana.
The study showed that majority of the entrepreneurs preferred trading type of enterprises probably because of less risk involvement, low gestation period, no necessity of technical staff and less problems in procurement and marketing. The data also proved that most of the respondents had high motivational and value orientation characters, medium level of job satisfaction usually took independent intra family and entrepreneurial decisions, and belonged to nuclear and small families with high level of education and services as their main occupation. Majority of the entrepreneurs possessed high level of confidence, decision making ability, managerial skills, far sightedness, communicability, skill competence, innovativeness, competitive spirit, change, proneness, amicable nature, independent and high aspiration low degree of credit orientation and risk preference.
Singh’s (1985) study deals with the factors impinging on and influencing the processes of the birth and growth of women’s enterprises are no different from those characterizing the entrepreneurial manifestation of men. The study further discloses that women entrepreneurs have entered a variety of fields involving relatively complex technologies which demand considerable managerial abilities. It further revealed that like men, women entrepreneurs are motivated by need for self fulfillment autonomy and independence. The findings do not suggest that entrepreneurship is gender specific. The study stresses that what women need is exposure to wider environment and access to facilities in order to appreciate their entrepreneurial potential.
Lalitha Rani (2006) studied women entrepreneurs in the city of
Visakhapatnam. The findings of the study shows that different women have different attitudes towards entrepreneurship and the growth profitability and survival of the enterprise depend on this attitude or view towards entrepreneurship. Some women consider “business as a challenge” were ambitious “career oriented” and “innovative”. Entrepreneurship was their first priority and they were prepared to take risks. For some, entrepreneurship was an avenue for additional income but despite their need for money the first priority was the home. This attitude towards entrepreneurship was categorized on the basis of education.
The study by Gupta M (2008) highlight the constraints faced by women entrepreneurs such as lack of knowledge about various important aspects related to their enterprise, lack of finance, support from family, male dominance, lack of information about various organizations and institutions supporting women entrepreneurs and they were not aware of the institutions or programmes for women entrepreneurs.
Banerjee and Talukdars (2007) study of 30 women entrepreneurs reveal that majority of them were above 50 years of age, had good educational backgrounds, belonged to higher income group families and were concentrated in urban areas. It was further found that women entrepreneurs had greater motivations, greater job involvement and higher annual family incomes. AT the same time, those with high entrepreneurship faced less conflict in their roles as entrepreneurs and housewives whereas those with low entrepreneurship faced more conflict comparatively more number of women belonged to joint families, approached institutions for financing their enterprises and hired labour from outside than those having low extent of entrepreneurship.
The profiles of 35 women entrepreneurs who own and manage small to medium sized enterprises in two states in South India was studied by Das
(1999). Based on their reasons for starting a business, the women were classified into three categories ‘chance’, ‘forced’ and ‘created’ or pulled’ entrepreneurs. The study indicated that there were both similarities and differences between the experiences of women from the three categories. The women in this study were found different when compared with their western counter parts in some antecedent conditions (for example family background and marital status), incubator organizations issues (as most did not work before starting a business) and environmental factors (for example, support services). The study suggests that there is a rationale for focusing on ‘created’ or ‘pulled’ entrepreneurs as they seem to perform better and view their success as resulting from business skills they possess. It could be inferred that finance motivations can lead to success in entrepreneurial activities.
The study on ‘Development of SSI’ and Women Entrepreneurs’ by Manimala,
M.J. (2008) reported that with the help of policy initiatives, incentives and facilities by Government of India, the small scale sector will continue to grow at a faster rate facing the challenges posed by liberalization and globalization and contribute substantially to the Indian economy. Since women entrepreneurs also constitute an inseparable segment of SSI sector, promotion and empowerment of women entrepreneurs is implicit in the expectations.
Khan M.A. (2006) examined the emergence of women entrepreneurs in
Andhra Pradesh. The study concluded that entrepreneurship among women requires a congenial entrepreneurial climate which motivates and facilitates them to take up entrepreneurial career.
The emerging socio psychological profile of successful women entrepreneurs in Jammu and Kashmir was studied by Khajuria and Sinha T.N. (2000). The trend of women turning to entrepreneurship has been growing many fold in the region during the last three decade. Most of the women were first generation women entrepreneurs who joined this field primarily ‘to remain busy’ and ‘fulfill ambition’. Women have shown a high single mindedness purpose to achieve perfection in quality of their products and services and establish their business well. Most of the women interviewed, have shown upwards trends in their profits and turnovers. Though the study had limitations in terms of small sample of successful women entrepreneurs, it throws substantial light on the entrepreneurial characteristics of successful women entrepreneurs in an average Indian city.
Koshy and Joseph (2000) conducted a study of 65 small scale industrial units managed by women entrepreneurs. The findings of the study reveal that the units exhibited a satisfactory growth rate in most of the cases. About 88 percent of the units were making profits and only 2 reported losses. 75% of the units expanded since establishment. The units in the food chemical sector registered a higher growth rate in general. Most of the entrepreneurs limited their growth due to reasons of fear of managerial problems, loss of tax incentives for SSI units marketing problems, scarcity of finance and other related issues. The entrepreneurs faced problems with respect to marketing and finance. The authors concluded that training and development in imparting professional management skills could be a been to women entrepreneurs especially first generation entrepreneurs.
2.4. Studies on women Entrepreneurship from the Low-Income Group:
Poor women from the low income group are venturing into entrepreneurship in the micro enterprise sector due to the changing economic scenario.
Rao (1995) attributes the inadequacy of entrepreneurship amongst rural women to the absence of congenial and appropriate entrepreneurial climate and an industrial base. The GOi has initiated entrepreneurial development programmes for women in rural areas. These programames do contribute to social transformation since they absorb rural women in income generating activities either on full or part time basis. But in developing entrepreneurship among women there have been several problems and identifying and eradicating such problems that inhibit the growth of grassroot entrepreneurship will help in envisaging active participation and contribution of women.
He assessed the factors that impede and slowdown the process of entrepreneurial development among women in the backward mandals of A.P. as (a) poor financial status (b) lack of cooperation from the family and society keeping them away from mainstream development (c) illiteracy.
The study by Rathore and Chhabra (1991) rural that with little training women could do business in the agro-based industries sector like food preservation, bakery, dairy poultry etc. As women have been helping men in such activities without getting any credit or financial remuneration. In areas, where forests are predominated they can do forest preservation, collection absortment and classification of medicinal plants. Apart from traditional industry women could be encouraged and trained in maintenance and repairs of small machinery etc. They concluded that women in both rural and urban areas needed training, finance and the cooperation and encouragement from the family, the society and governmental organizations to enable them as entrepreneur to enter the mainstream of the country’s economy.
Ramamurthy, V.M.J.A., Krishnakumar, T. (2008) discussed how training programmes can effectively address the wider needs for confidence building as well as business orientation among poor women entrepreneurs. He concluded that women development agencies including NGOs have to be sensitive to the training needs of the target group. He adds that there is an urgent need to change the orientation of the people who are administering the programmes and policies. The recent pronouncements of governments and international agencies recognizing the important role played by micro enterprises will not yield result unless the relevant policies and programmes as well as people are re-oriented suitably.
Jyothi and Prasad (2009) find a striking difference in the educational background of women entrepreneurs in general and those belonging to rural
India. Social factors like caste, community and religion were found to strongly influence the growth of entrepreneurship. The findings reveal that the system of joint family was on decline and that there was no significant relation between occupational background and entrepreneurial character of the women. A majority of them misperceived training as a pre-requisite for getting finance. The main reason, which urged them to take up business activities, were unemployment and inadequate educational qualification.
Sarngadharan and Beigum Resia (1995) studying the institutional support and problems faced by women entrepreneurs in Kerala confirm that women entrepreneurs confront numerous problems like outside financial support being meager, marketing purchase of raw materials, competition from larger units, slackness in demand as major problems in promoting and running their enterprises.
Awasti D.N. (2005) conducted a case study of women owned micro and small enterprises within India’s self Employed Women’s Association (SEWA) and reports that women change in two ways when they organize on the basis of work to join a union or form a cooperative. First their self perception evolves, they realize that they actually are workers that as such they contribute to the nations economy and so become conscious of the fact that they have more roles than those traditionally emphasized by society i.e. as mother-wife and housekeeper. Second women come to disregard their differences of caste, religion or community and manifest relatively high levels of solidarity especially in times of crisis.
The study by Nair (2006) received the strategies and approaches in training women entrepreneurs in the Indian rural sector. The review stresses the incorporation of gender in policy making and implementing agencies as gender has a direct bearing not only on the access to resources and the ability of individuals to realize their productive potential but also on the entire socio-cultural fabric of societies. The nexus between gender and economic deprivation is so complex that policies and schemes addressing these issues need to be extra-sensitive and flexible to the social and cultural echoes of the rural communities before settling on to resolve their economic problems.
Manimekalai and Rajeswaris (2008) study on women entrepreneurs running micro enterprises in Trichirappally rural that women were engaged in trade and service units. Majority of them were sole proprietorship. The raw material and marketing were mostly within the district or state and a number of agencies helped the women entrepreneurs in starting and running the enterprise including banks district industries centre, the family and friends and relatives. The impact of skill development training programmes for promoting/ creating self employment for women of the vulnerable sections of society was studied by Begum and Srinivasan (2000).The findings suggest a need for increasing, the awareness about the existing training programmes which can motivate women to become self employed. The study further implied that more knowledge input programmes should be planned in the extension work of the community.
The study by Awasthi (undated) on women’s work and credit reveals that women operated micro businesses do not grow because of inadequate investment capital coupled with low levels of skills which compel them to adopt low technology based production process and the inadequacy of working capital forces them to buy raw materials in smaller quantities making it costlier. All this affects their cost of production adversely and limits their ability to experiment or introduce new products and designs.
The review of literature reveals by and large, comprehensive and focus study on women entrepreneurs especially from below poverty line villages is scarce and limited in nature. Thus there is a wide scope for further research to investigate issues pertaining to women entrepreneurs in low income group/ below poverty line villages.
Chapter – 3
OBJECTIVE OF THE STUDY
3. Statement of problem/scope of study
Studies suggest that it is more difficult for women to start and be in business due to lack of opportunity to develop business skills, granting of business credit, domestic responsibilities that make them have a feel of conflict between their roles. Under such circumstance it is very essential to study the economic independence of women entrepreneur on family especially in case of micro-enterprise. Several facets of women entrepreneurship have been probed by different scholars of instance the psychological aspects of entrepreneurial behaviour. Several research has been carried on characteristics, motivation and constrains of women entrepreneurship process and general entrepreneurship, no review of literature revealed the impact of women entrepreneurship on families and also inculcating entrepreneurial and general values in family.
3.1. Objective of Study
Based on the secondary data, literature review and the gaps identified the objectives of the study was framed. The objectives of the study is as follows:-
1. To identify the key drives of economic independence of women
entrepreneurs.
2. To study the impact of women entrepreneurs on family with respect to
standard of living. 3. To study the interdependence of women entrepreneurs and families.
4. To create an independency model with respect to economic
independence of women entrepreneurs.
5. To make recommendations in order to have empowerment of women
especially among disadvantage group.
3.2. Based on the above objectives, the following hypothesis were
initiated.
H01 : Financial conditions of the family do not play significant
role for involvement of women in entrepreneurship.
H11 : Financial conditions of the family play significant role for
involvement of women in entrepreneurship.
H02 : Involvement of women in entrepreneurship does not play
significant role in standard of living of family.
H12 : Involvement of women in entrepreneurship does play a
significant role in standard of living of family.
H03 : Women’s involvement in entrepreneurship process does
not happen due to monetary benefits.
: H13 Women’s involvement in entrepreneurship process
happen due to monetary benefits.
H04 : Women’s involvement in entrepreneurship process are
independent of the interest and financial condition.
H14 : Women’s involvement in entrepreneurship process are
dependent of the interest and financial condition. Chapter – 4
RESEARCH METHODOLOGY
Research Methodology is a blue print of the Study conducted, which includes steps of data collection, sample selection, type of questionnaire, process of data and finally interpretation of the data.
4.1. Understanding the issue:
The research had to be started by understanding the concepts of entrepreneurship development, women entrepreneurship and status of the entrepreneurship development in rural India to be more precise its impact in Maharashtra which stands third in industrial development in the rural India. The organizations involved in women entrepreneurship in the interiors of Maharashtra had to be studied. Hence secondary data analysis was very essential.
4.2. Pre-Study:
This was done by having an open conversation with the organizational heads of MAVIM (Mahila Aartik Vikas Mahamandal). This organization was chosen as it has its presence felt in major districts of Maharashtra and is a body from the governments side which helps to bring in entrepreneurship development in the districts of Maharashtra and working exclusively for the upliftment of women. Several organizational books and manual were referred to understand the details. 4.3. The study concentrated both on primary and secondary
data. a) The Secondary data provided details of the State of Maharashtra
and districts of Maharashtra and the entrepreneurial activity
among women. b) The primary survey was critical component of the study as it
would yield crucial data on the impact of women
entrepreneurship on their families from women Entrepreneur,
grass root workers and district officers.
The survey would give an idea on :
1. The Entrepreneurial activities.
2. Prevailing socio-economic data of the village and the
composition of population.
3. Details of women who have been entrepreneurs and whether
they are part of SHG.
4. Special efforts made by women from socially backward group.
4.4. Instrument for Survey :
The instrument used was a questionnaire. The questionnaire was prepared taking into consideration certain parameters such as
1. General Information
2. Information related to enterprise. 3. Information related to family.
4. Information as to reasons for entering into entrepreneurship.
5. Information about income of self and family.
6. Information about standard of living and change.
7. Information related to interdependence on family and their
support or success.
4.5. Selection of Samples:
Locale of Research and sample size: The state of Maharashtra was selected as locale for the present study as it is the second most popular and third largest state by area in India. The state covers an area of 307,731 km (118,816 sq.ft) or 9.84% of the total geographic area of India. It is also the richest state in India contributing to 15% of the country industrial output and 13.2% of GDP. The ratio of the urban to rural population is 42% and 58%. The study was limited to rural
Maharashtra Mumbai, the capital city of the state, is Indias largest city and the financial capital of the natioin. Marathi is the language of
Maharashtra. Maharashtra has 35 districts geographically, historically and according to political sentiments. Maharashtra has five main regions.
• Konkan (Konkan Division)
• Vidarbha or Berar (Nagpur and Amravati Division)
• Marathwada (Aurangabad Division)
• Northern Maharashtra and Kandesh (Nashik Division)
• Desh or Western Maharashtra (Pune Division) 4.5.1. Considering that Maharashtra has 35 districts and is divided into
Western Maharashtra, Marathwada,Vidarbh, Konkan and Northern
Maharashtra and also considering the large size of districts talks with the officials and guide revealed that the study be conducted for all the regions of Maharashtra as mentioned above, but taking only 2 districts from each region based on judgmental sampling.
Consequently the districts selected were :
1. Konkan Region : Ratnagiri, Sindhudurg
2. Western Maharashtra : Pune, Kolhapur.
3. Marathwada : Latur, Osmanabad
4. Vidarbh : Gadchiroli, Bhandara.
5. Northern Maharashtra : Nashik, Ahmednagar.
The selection of the districts was also supported by MAVIM. Mahila
Artik Vikas Mahamandal a state government run organisaiton which works towards the empowerment of women in rural areas of
Maharashtra who felt that these area would represent all the 5 major region of Maharashtra.
The total number of women entrepreneurs is 500 through proportionate sampling and the villages chosen were on the basis of judgemental sampling.
4.5.2. The following table gives details of sample size throughout 10 districts of Maharashtra.
No. of Women No. of Villages (SV) Sr. Entrepreneur(s) District No. Sample Sample Population Population selected selected 1. RATNAGIRI (187) 4 2572 17 2. SINDHUDURG (176) 6 3830 25 3. PUNE (201) 10 7694 50 4. KOLHAPUR (137) 5 2693 18 5. LATUR (242) 8 8759 57 6. OSMANABAD (154) 8 5816 38 7. GADCHIROLI (451) 8 13076 85 8. BHANDARA (355) 6 12355 80 9. NASIK (326) 8 4021 26 10. AHMEDNAGAR (206) 10 15928 104 TOTAL 500
Source: Mahila Arthik Vikas Mahamandal.
4.6. Pre Testing Phase :
The first survey was done on pilot scale at Ratnagiri followed by which the questionnaire was revised. Further again the questionnaire was administered randomly on 30 entrepreneurs.
4.7. Tabulation and Statistical Analysis of Data.
The responses observed for each of the items in the questionnaire were scored and tabulated into a master sheet. The statistical tools included chi square test, factor analysis, F-test, regression and logit model. Paired t test. The analysis was done using SPSS/PC package. 4.8. Interpretation and Report writing:
The analyzed data were finally interpreted to draw the inference and reported with the objective of the study in view.
4.9. Limitations of the study:
The study was carried out with some assumptions regarding time, study area and sample size. The identification of the respondents and gathering information from them was one difficult task faced by the researcher. Accessibility of the researcher to the rural areas was also considered while selecting the state of Maharashtra.
Chapter – 5
DEVELOPMENT OF WOMEN ENTREPRENEURSHIP IN INDIA
5.1. The existing scenario:
Women form an important part of the labour force and the economic role played by them cannot be isolated from the framework of development. The role and degree of integration of women in economic development is an indicator of economic independence and higher social status of women. Emergence of entrepreneurship is considered to be closely linked with social, cultural, religious and psychological variables. These changes seem to have become acceptable norms in the context of women at work in India today, with increasing number of women participation in economic development.
Women Entrepreneurship in India is a recent phenomenon, which has come on the scene in the seventies but became more prominent in the eighties, especially in the latter half of the decade. In the eighties, the gender and development approach (GAD) influenced by social feminism, post modern and post colonial theorists, look into account the totality of women’s lives, rejecting the public/ private dichotomy which serves to devaluate the work of women at home. Focus on perspectives on development makes women the ‘subjects’ rather than ‘objects’ of development, change agents rather than welfare recipients. The GAD approach is to move women from the margin to the centre (Hooks 1984) by women gaining a sense of control over their lives (empowerment). Around 73 percent (Sethi 1994) of the women entrepreneurs, in India have launched their enterprises in the eighties and this trend appears to continue in the nineties. The recognition of entrepreneurship is a quick route to socio economic development by planners, the declaration of the International
Decade of Women (1975-85) and the setting up of a separate ministry for women and child welfare in 1985 have given a spurt to women entrepreneurship (Sethi 1994).
Women make the second largest target group for identification of potential entrepreneurs, being slightly less than 50 percent of the total population.
There are 99.4 million women workers in a labour force of 272.84 million in
India. Majority of the women seek employment out of economic necessity, but of these a large number are unable to find employment. Their share in total employment (40%) is higher than their share in the labour force (33%)
(Rathore and Chhabra, 1991). It is not always easy for women to find employment compatible with their family responsibilities and household chores. Thus many women are attracted to the idea of self employment in enterprises adjoining their premises, with flexible hours allowing them to take care of both home and business. The last two decades has seen not only a substantial increase in employment of women but the last decade has seen a prominent role played by women entrepreneurs in the process of economic development (Fig.).
100 96 95 91 87 90 78 80 72 70
60
50 Women
40 Men
30 24 20 20 13 9 10 4 5
0 1980 1985 1990 1996 2000 2006
Source: The Economic Times Financial Daily, March 17, 2007
The data shows that the participation of women in entrepreneurship during the post liberalization period is encouraging since the preparation has increased from 4% in 1980 to 13% in 1996 to 24% in 2006. There is also gradual increase in the rate of participation in the economy during the post liberalization period. The average annual growth of women entrepreneurship during the last decade is quite encouraging considering the inadequate growth during the first three decades of post independence period (Table 2.1.)
Average Annual Growth of Enterprises under Women
Year Percentage of increase
1971 -80 1.58
1981-1990 5.19
1991-1996 9.65
1997-2006 13.23
Source: The Business Line, Economic Daily March 17, 2007. 5.2. Entrepreneurship among Poor Women:
The concept of entrepreneurship among poor women is becoming a global phenomenon today as poor women are increasingly turning to entrepreneurship as a way of coping with poverty. Venturing into micro enterprises to generate income is increasingly being adopted by poor women as a livelihood strategy. The studies by Bhatt, Pecera, Anderson and
Barohona (1995) illustrated how poor women micro entrepreneurs, have utilized their entrepreneurial skills to become economically independent and provided economic support to the family through entrepreneurship. Marrison, white and Van Velser (1987) and Belcourt, Burke and Lee Gosselin (cited in
Das 1999) found that women are turning to entrepreneurship as it provides way to cope with the discriminations existing in the society. It is thus important to recognize and acknowledge the entrepreneurial spirit and approach which lie behind survival and livelihood strategies of poor people. Also, it is important to foster and promote the spirit of self reliance by directing entrepreneurial support services, programmes and policies to those who live at the edge of economic survival (Mahler, 1998). No deliberate distinctions have been made between income generating activities or self employment activities in the informal sector and entrepreneurship.
5.3. Women and Microenterprises
While the trend is to focus more on entrepreneurship development and enterprise creation at all economic levels, there needs to be clarity about terms women micro entrepreneurs or micro enterprise. IT is thus necessary to explain the terminology of micro enterprises with relevance to women entrepreneurs. There is no clear cut definition of what constitutes a micro enterprise particularly those relevant for women. Indian study of women entrepreneurs defined women’s enterprise as “a small unit where one or more women entrepreneurs have not less than 51 per cent holding” (Mishra 1996). Thus, in such a case the women’s enterprise is measured in terms of size and financial holding. Sometimes women’s enterprise is understood to mean not only majority ownership by one or more women, but also the comparative numbers of female employers. Thus a women’s enterprise can also be defined (Iyer
1991) as an enterprise owned and administered by women entrepreneurs having a minimum of financial interest of 51 percent of the share capital and giving atleast 50 percent of the employment generated in the enterprise to women”. Sing (1992) a woman entrepreneur is a confident innovative, and creative women capable of achieving economic independence individually or in collaboration, generates employment opportunities for others through initiating establishing and running an enterprise by keeping pace wither personal, family and social life. The typical woman entrepreneur like the independence associated with the entrepreneurial career, is a dreamer with high hopes and ambitions.
She has a positive approach to competition, is confident of her ability to deal wither problems and has a belief that hard work is a sure ingredient of success in entrepreneurial venture. David (1992) defined micro enterprises as small undertakings (upto 10 people) run by individuals who take up the responsibility of managing a business venture and often involve the family. Micro enterprise suit the life style of women because of the multiple roles and the need to reorganize time. Originally, micro enterprises for women, were extension of kitchen activities in stereotyped roles such as 3
P’s, Pickle, Powder, Pappad. Now women have ventured into non traditional business like Xeroxing, beauty parlours, photographs. Women especially poor women generally venture out as entrepreneurs in the micro enterprise sector.
They find the micro enterprise sector attractive because of low barriers to entry and flexible the nature of the work, which make it easy to combine gainful employment with domestic responsibilities. Sometimes these enterprises grow and become larger established organizations. Growth is a relative term and cannot be measured in isolation or absolute figures. It is usually assessed in terms of sales turnover profit, market share and such other indicators. Dowing (1991) studied growth strategies used by male and female entrepreneurs in many developing economics and asserted that men and women employ different strategies due to different circumstances. For example while make owned enterprises usually grow vertically, women’s enterprises tend to grow by diversifying into other activities. A female entrepreneur tends to involve her family in her business with very few exceptions. Women involved in micro enterprises are largely concerned with survival of their families rather than running successful ventures. According to
Cromie (1987), women see entrepreneurship as a means of simultaneously meeting their career needs and childcare roles. This contribution made by women to the economy goes unrecognized because of prevailing societal perceptions. Though women entrepreneurs are classified into separate category vis-à-vis labouring women, what is often forgotten is the gender issue which straddles women across sectors. Family values, hierarchical structure and kinship network continue to be powerful determinants in their lives and status. Taking up entrepreneurship has not relieved them of the prescribed roles or familiar responsibilities (Iyer 1991).
Some recent researcher indicate that several women become entrepreneurs due to the pull and push factors of the traditional and changing values
(Asghari 1983). Under the pull factors, the women entrepreneurs choose a profession as a challenge, as an adventure with an urge to do something new and to have an independent occupation under the push factors women take up, business enterprises to get over financial difficulties when responsibility is thrust on them due to family circumstances. As such women both in rural and curb an sectors turn to entrepreneurship to fulfill their aspirations both economically and socially.
5.4. Profiles and Typology of Women Entrepreneurs:
One may consider it only natural to raise question of what kinds of business are usually operated by women. But when the same question is asked about enterprises run by women, it is usually with different connotations. In other words it is seen positively self employment is a legitimate and acceptable occupational status. However for a women stereotyping is often implicit as a result of the traditional definition of legitimate roles in society. Instead two roles of women have almost undisputed acceptance, these of wife and mother. The existing variety of generated division the perception of what are suitable economic activities women engage in, is not universal. What is unacceptable in one social context maybe more easily accepted or be common practice in another. For example, blacksmiths are generally expected to be men, but in northern India, women ironsmiths are found hammering metal into agricultural implements. Similarly weaving may be widely categorized as a “traditionally female” occupation, but in many parts of
Africa, it is the man who weaves (Carr, 1984). The Life cycle of women is generally seen as having a critical bearing on the kinds of businesses they operate. According to Vinze (1987) women entrepreneur in India represent a group of women who have broken away from the beaten track and are exploring new vistas of economic participation. They have long stories of trials and hardships. The task has been full of challenges. They have had to encounter public prejudices and criticism. Family opposition and social constraints had to be overcome before establishing themselves as independent entrepreneurs. Vinze has developed a typology of women entrepreneurs in India based on their business activities. They are :
5.4.1. Entrepreneurs in large and medium sector :
In the large and medium sectors women entrepreneurs are educated and professionally qualified and can take initiative and manage business. In this category of entrepreneurs, women are mostly from urban upper and middle classes. They have received the basic managerial training and sometimes have possessed a MBA degree. These women usually have been the heads of large and medium units.
5.4.2. Entrepreneurs with benevolent attitude:
This category of entrepreneurs work in cities and slums to help women with lower means of livelihood. The enterprises owned by them are service oriented organizations. Women entrepreneurs heading such organizations need government support in marketing as well as getting finances at concessional rates for their products under preferential purchasing policy of the government.
5.4.3. Entrepreneurs in the small sector :
Those women entrepreneurs, who are educated or had any formal training in management, but have developed skills to take to small scale industry. They choose the product they are familiar with, like garments, weaving, pickles, dolls and handicrafts. Aasthi (undated) has classified women entrepreneurs in the Indian context based on their credit needs. His classification is as follows:-
5.4.4. Micro entrepreneurs :
Women earning low incomes in rural and urban areas by engaging themselves as home based workers (producers), small vendors, petty traders and hawkers, producers and suppliers of service and cultivators. They are mostly illiterate and are from the lower strata of the society (in terms of caste and communities), have very low level of skills, mostly learnt as part of their household work (cooking, knitting, bamboo basket, weaving textiles and handicrafts) and have little or no technology and cater to the low and of the market segment.
5.4.5. Small Scale Entrepreneurs :
This segment belongs to the urban middle and upper middle class women entrepreneurs who have relatively easy access to the government support infrastructure. They are better qualified and have more exposure to the market. They also have better business networks through their families and friends who may be in the same business. 5.4.6. Women Owners of large business:
These entrepreneurs come from wealthy class of the social strata, coming mostly from business houses or from the families of serial inheritance or division of large business houses.
In the present study the researcher focuses on the women entrepreneurs in rural area with micro enterprises.
5.5. Role of Government/ Non-Government Agencies in the
Development of Women Entrepreneurship:
Women development was not distinguished as an identified sector in the initial years of planning. It was only during the VIth plan, which began in 1980, that the magnitude of women’s problems was perceived and the need to make special efforts for the economic development of women recognized. The
Employment Policy envisaged for the VIth Plan (1980-85) was designed with two major goals viz. reducing under employment and lowering the age of retirement. The plan provided a “New Deal”, for self employment by providing a package of services such as training, credit, marketing, and general guidance for those who wanted to launch self employment ventures. The main thrust of the new deal was to ensure that the necessary information application forms etc. required for various facilities of self employment were made available at one place, utilizing the “one window” approach. Special attention was paid to the large section of women who were neglected as part of the work force, by giving financial and technical assistance through organizations engaged in various development activities. In the VIIth Plan
(1985-90) there was a definite shifts in focus from the welfare concept to development concept in programming for women, this ushering in a new thrust for the development of women. The plan suggested the following:-
♦ Treat women as specific target groups in all development programmes.
♦ Properly diversify vocational training facilities, for women to suit their
varied needs and skills.
♦ Encourage appropriate technologies, equipments, and practice for
reducing their drudgery and increase their productivity.
♦ Provide marketing assistance at the state level.
♦ Increase women’s participation in decision making.
The new Industrial Policy of 1991 has also stressed upon the need for conducting special entrepreneurship programmes for women. It emphasized on product and process oriented courses so as to enable women to start small scale industries. The policy further added that the objective of such courses would be to give representation to women in the filed of small industry development with a view to uplift their status in the economic and social fields.
Chapter – 6 MICROFINANCE & MICRO-ENTERPRISES
6.1. Microfinance Globally:
In a number of European countries microfinance evolved from informal beginning during the eighteenth and nineteenth centuries as a type of banking of the poor, juxtaposed to the commercial and private banking sector. Almost from the onset, microfinance meant financial intermediation between micro savings and micro credit, and was powered by intermediation. Legal recognition, regulation and mandatory supervision evolved in due course and led to a process of mainstreaming during the twentieth century when micro finance become part of the formal banking sector. In Germany, the former microfinance institution now account for around 50% of banking assets; outreach is to around 90% of the population.
Microfinance in Asia presumably has a much longer history, though little seems to be known about the early history of the heir in China, the chit funds in India, the arison in India or the Paluwagn in Philippines to name a few. Financial institutions of indigenous origin, most of them informal, are still exceedingly wide spread but have been largely ignored in financial sector development. There are exceptions on a limited scale, as in India where chit funds are regulated and in
Indonesia with its highly diversified rival and microfinance sector where various forms of informal financial institutions have been registered and eventually regulated throughout the twentieth century. Not a single country has made indigenous forms of microfinance a pillar of its modern financial system.
As neither commercial nor development banks nor state dominated but unsupervised cooperatives delivered to the rural and urban masses, credit NGO’s, during the 1970’s ushered in what came to be know as the micro credit revolution powered by donor support and international publicity. Grameen Banking became the new model of micro credit, its founder the prophet of micro credit movement. The term microfinance, originally meant to comprise financial intermediation between savers and borrowers, was created only in 1990. In the mid 1990s, it was taken up by CGAP, the donor consultancy group to assist the poor, which has turned the micro credit revolution into the microfinance revolution and professionalized microfinance. To some extent it has reinvented history not only in Europe but also in Asia and elsewhere where micro or informal finance and indigenous banking have always been based on principles of self-reliance, viability and sustainability.
CGAPs rediscovered the principles, but not the indigenous financial sector, be it informal or formal. Has the time come to revisit indigenous finance in Asia and re-examine its potential for upgrading, mainstreaming and innovating (Seibel 1997, 2001. India may serve as an example far older and more complex, yet also far less conclusive, than the European experience.
Microfinance as a new solution for poor people in newly developing countries. Microfinance is not a recent development, and neither are regulation and supervision of microfinance institutions (MFIs). Every now developed country and some developing countries, particularly in
Asia, have a long history of microfinance. It is important to recognize this because it presents a view different from that of many in the microfinance community who associate microfinance with credit NGOs and believe that micro finance history was invented in Bangladesh some thirty years ago.
6.2.1. Microfinance in Europe: Ireland and Germany.
The birth of microfinance in Europe dates back to tremendous increase in poverty since the 16 th and 17 th century. In response, microfinance in a number of European countries evolved from informal beginnings as a type of banking with the poor, juxtaposed to the commercial and private banking sector. Almost from the onset, microfinance meant financial intermediation between micro savings and micro credit, and was powered by that intermediation. Legal recognition prudential regulation and mandatory supervision evolved in due course and led to a process of main streaming during the twentieth century when microfinance became part of the formal banking sector. However in one case, that of Ireland regulations has also been used, upon the initiative of commercial banks, to curtail the further growth of microfinance.
6.2.2. The case of Ireland:
The early history of microfinance in Ireland covers the period 1720 to
1950, it is unrelated to recent initiatives to introduced credit unions. It is the story of how self help led to a financial innovation, legal backing and conducive regulation created a mass microfinance movement, and adverse regulation instigated by commercial banking interest brought it down. The so called Irish, loan funds emerged in the 1720’s as
Charities, initially financed from donated resources and providing interest free loans, but soon replaced by financial intermediation between savers and borrowers. Loans were short term and installments weekly. Peer monitoring was used to enforce repayment.
After a century of slow growth, a boom was initiated by two events (a) a special law in 1823, which legalized financial intermediation by allowing the funds to collect interest bearing deposits and to charge interest on loans; and (b) the establishment in 1836 of a loan fund board for their regulation and supervision. By 1840, around 300 funds had emerged as self-reliant and sustainable institutions, generating their own resources through deposit collection and providing small loans to the poor.
6.2.3. The Case of Germany:
The story of microfinance in Germany, covering more than two centuries, is one of self help, regulation and superior which have created, relative to its population, the largest microfinance sector of any country. It comprises two networks: community savings funds now referred to as savings banks in English, and member owned cooperative associations, now referred to as cooperative banks. The community owned financial institutions started during the latter part of the 18 th century. Having learned from the early Irish charities (a) that charity is not sustainable (b) that there is a strong demand among the poorer sections of the population to for safe deposit facilities, the first thrift society was established in Hamburg in 1778, followed by the first communal savings funds to expand their credit business, including agricultural lending. The Prussian state responded with regulation, passing the first Prussian savings Banks Decree in 1838- fifteen years after the Irish government had passed a law on loan funds.
In 1884 the savings banks formed the German savings banks association. The Second Microfinance movement started after the hunger years of 1846-47. Starvation was widespread; many peasants lost their fields to the moneylenders, and many small business went bankrupt. Two men are prominent among those who took action:
Raiffeisen in rural areas, creating credit associations (Darlehnskassen-
Vereine) predominantly of farmers, later known as Raiffeisenkassen and now Raiffeisenbanken; and Schulze Delitzsch in urban areas, establishing savings and credit cooperatives among craftsmen and other small entrepreneurs now called Volksbanker (peoples banks).
Raiffeisen established a rural charity association in Weyerbusch, bringing in grain from non-affected areas in the East. Within a few months, this brought down the price of bread by 50%. His initiative was paralleled in 1850 by Schulze – Delitzsch’s first urban credit association, who insisted on self-help without charity from the beginning. Raiffeisen soon realized that charity did not lead to sustainable institutions. In 1864 he established the first rural credit association in Heddesdorf, following Schulze – Deltzschs example who rejected charity. During the next twenty years, the initiative gradually turned into a movement, but growth was slow, reaching not more than
245 rural co-operatives in the mid 1880’s. The turn around came in
1889, when both the rural and the urban networks of credit associations were brought under the law; the co-operative act often
German Reich the first cooperative law in the world.
6.2.4. Microfinance Lessons Learned from Europe:
Three centuries of microfinance in Europe have taught a number of lessons that financial systems developers should be aware of, including the following informal local initiatives based on self help have a tremendous potential. Their foundations are savings, provided by depositors or shareholders. Savings are the essence of self help and self reliance, both of the household or small enterprise and of local financial organizations. The viability and sustainability of small enterprise (farm or non farm) and of local financial institutions are intertwined, they fall or grow together. Continual access to financial services, particularly savings and credit, over long periods of time are crucial in poverty alleviations without economic development. Local financial institutions, some of them very small, have proven their ability of providing such services for generation after generation of crucial importance in the evolution of local financial institutions have been two factors. • The first is regulation through an appropriate legal framework, with
changes and amendments overtime.
• The second is effective supervision delegated because of their
large number to apex organizations of MFI networks, which in turn
are supervised by the national financial authorities. While Germany
and countries like Italy have stuck to a multitude of local financial
institutions, the Netherlands have credited a central cooperative
banking institutions, Rabobank; France has its credit, Agricole and
Sweden has merged its savings and cooperative banks into a single
national banking institution. One may hypothesize that Germany is
a federation and therefore tends to institutional diversity, but Italy
shows a similarly diversified structure of local financial institutions
and is not a federation. There is just no single best practice model.
6.3. Microfinance in India:
6.3.1. Origins and early developments –
The case of India shows that the origins of microfinance predate those reported above in Ireland and Germany by more than two and perhaps even three millenniums. There are at least three strands of indigenous finance of great historical depth in India, moneylenders, chit funds or rotating savings and credit associations (ROSCAS), and merchant bankers each with a complex and interlinked history, much of it yet to be written. To draw lessons from this experience would require systematic historical research from a microfinance perspective. The following may serve as an inducement to embark on such research and share the results with the microfinance community. This is all the more important as India, over a period of tree thousand years, has spread its culture trade and banking through vast parts of south and south- east Asia and may continue to do so far as its latest rural finance innovation is concerned: SHG banking.
Moneylenders who provide loans from their own resources as their only financial service are the oldest of these professions, dating back to prehistoric times. There was probably a long period of transition from gift exchange, reciprocal lending and trading cum lending to specialized lending, and from lending in kind to lending in money before the first millennium B.C. Money lending became an organized and subsequently regulated profession in India around 1700-2200 years ago as shown below. Money lending is still widespread today, and remnants of its historical informal precedents are still in existence, re-emerging time and again according to demand. Many (informal and formal) moneylenders may have turned into (formal) merchant bankers at various times in history, or into organizers of (informal or formal) chit funds.
Chit funds or ROSCAs are widespread institutions of ancient origin in
India. A number of people, usually under an organizer, join together to regulatory (e.g. daily, weekly, monthly) contribute equal amounts of money (or kind) allocated to one member at a time, a cycle ends when each participant has his turn. It appears that historically they were relatively small and unregulated. There are two types: the conventional type found all over the world, in which the full amount contributed (part from minor deductions) is allocated to one member at a time, either by lot, demonstrated need or in an agreed upon sequence and an advanced type found in a number of Asian countries including, China Vietnam and Nepal where the amount collected is allocated by auction to the lowest bidder and the balance returned to the members, or by tender. In response to increasing business opportunities, the bidding type has been gradually replacing the conventional type. As chit funds grew in size and volume and the risk of fraudulent pyramid schemes increased there has been a tendency of regulating the chits. Starting with the Travancore Chit Act of 1945 followed by other state level laws, they were increasingly included in the formal financial sector. Chit funds attained such importance that in
1982, after ten years of deliberations, a federal chit funds Act was passed, providing legal status to chits as non-banking financial intermediaries. The act regulates minimum capital, ceilings on aggregate chit amounts, procedures of dispute settlement, etc. This has greatly contributed to the growth of licensed chit funds, which are found all over India in large numbers.
Merchant Banking i.e. financial intermediation comprising lending deposit taking and other financial services – evolved in India during the first millennium B.C. and was widespread in India and beyond as early as the third century B.C. Merchant guilds which dealt in good and money, appeared already in the Vedic scripts, the oldest parts of which date back beyond the first millennium B.C. between 200 B.C. and 300
A.D. a differentiation took place between the guild of money lenders and the guild of traders, followed by the emergence of a guild of merchant bankers. The guilds eventually turned into strictly hereditary castes and banking became a sub-caste of the traders caste (Vaisya).
Regulation evolved during the first two centuries. A.D. when a law code, dharmashastras, was written regulating loan deeds law courts and debt procedures in detail. Money lending and banking became licensed and tax paying professional. Usury initially was a major issue of religious disputation. This was eventually resolved by agreements over “reasonable” interest rates, e.g. 15% pa.. on secured loans and higher rates on unsecured loans. The latter ranged from 2% p.m. on loans to a priest (Brahman) to 5% p.m. to a cultivator (Shudra) supposedly reflecting different assessments of risk by caste. Interest payments could also be made in kind, but at a substantially higher rate.
Unrecovered loans were written off after 10 years. In addition there was social banking i.e. interest free loans to the deserving and the poor (Bhargava 1934; Schrader 1997: 71-83).
6.3.2. Medieval India:
The period from the mid thirteenth century to the beginning of British rule during the eighteenth century, with its highly monetized economy was the hey day of indigenous banking with domestic and international long distance trade merchant banking grew enormously held by individual firms, joint family firms and partnership firms all within the same baniya caste but differentiated into numerous sub-castes. Their customers include European private merchants and trading companies. They also advanced working capital to weavers and other artisans to produce goods on order for Indian or European merchants
– an Indian (monetized) version of the pulling out system. Some secured commercial interest rates during the 17 th century were reported between 0.5 and 1.25% p.m. risky commercial credit fetched a flat rate 40-60% per trade venture. The basic principle merchant banking were mutual trust and mutual benefit. Very much in contrast to what emerged at the same time in rural finance.
6.3.3. British India : Microfinance and banking changed substantially, starting 1757 (Battle of Plassey). The imposition of trade restrictions.
The imposition of trade restrictions and long distance maritime trade led to a decline of indigenous trading and merchant banking.
Interventionist polices such as the preferential importation of cloth from
England dealt a death blow to Indian textile manufacturing and the ancient commercial structure. However, this was followed by a rise in domestic trade and a shift to Bombay as the main centre of indigenous industry and banking. European finance limited itself largely to
European enterprise. In rural areas, new legislation on land revenue collection, private property and land mortgaging and the transformation of subsistence agriculture into cash crop production created new opportunities for money lender, who could now enforce their claims in court. During the first half of 20 th century, rural indebtedness first increased, then was reigned in by money lender, usury and tenancy legislation, but finally led to the rise of new types of lenders with an interact in acquiring the land of their borrowers. Cooperatives introduced top down, at the same time the bankers castes rose to new heights. In the sphere of big business, they adopted Western banking by pooling their capital, establishing joint stock companies or buying shares of banks, in the small and medium business sphere indigenous style banking continued.
6.3.4. Independent India: Searching for new approaches to reach the rural poor.
Upon independence India faced an underdeveloped rural economy, high levels of indebtedness and a lack of efficient financial services.
Since the 1950’s the lack of rural development has been attributed to a lack of access to credit to finance production assets. Private banks that should have provided such credit were absent from rural areas; and informal finance, through moneylenders friends, relatives and rotating chit fund was inadequate. 80% of the population lived in rural areas;
40% of GDP was contributed by agriculture, but only 2.2% of total credit went to agriculture. Almost exclusively to medium and big farmers. No attempts were made to build on indigenous informal finance, despite the fact that, according to Reserve Bank of India findings, informal credit accounted in 1951 for 90% and in 1971 for
70% of rural indebtedness, there was no mentioning of savings.
Instead to remedy the situation, the union government took three related measures in 1969; the nationalization of 14 private banks
(followed by another six in 1980); the requirement to open two rural branches for every urban branch and a mandatory system of priority sector lending.
A stock taking in 1975 revealed that as a result of the institutional expansion policy, 10,882 rural and semi urban branches had been opened, yet the poor still lacked access to credit. It was concluded that rural branches of large commercial banks, be they private or public, are thus not the right answer. Hence, the government introduced a new network of government owned Regional Rural Banks (RRB’s) regulated and supervised banking institutions with a low capital base of around $ 2,50,000 each covering with its branches a designated service area of 1 – 3 districts. By 2005 there were 196 RRB’s with a rural branch network of 14,000 including 12,084 rural and 1,875 semi urban branches. Yet the problem persisted: RRB’s and cooperative banks catered for farmers not the vast numbers of landless, migrant labourers and illiterate women. In 1981 RBI carried out the All India
Debt and Investment Survey, published in 1983. After years of massive branch expansion, policies of directing credit to the rural areas, massive self employment programs, and large numbers of donor credit lines among them over $ 1 billion from the World Bank with the requirement that at least 60% went to small farmers – a total of 14 million small loans had been provided by banks, yet some 250 million of the rural poor had no access to formal finance and 39% of rural indebtedness stemmed from informal sources (though a huge reduction compared to 1951 and 1971).
In 1982 RBI transformed its agricultural credit department into a new apex bank. The National Bank for Agriculture and Rural Development
(NABARD), with responsibility, eventually for some 1,60,000 rural financial outlets, among them around 1,00,000 credit co-operatives
(PACS), NABARD concluded that, while India had one of the most complex rural financial infrastructures of any developing country, the system had failed to attain its objective of reaching the rural poor.
Among the reasons identified were a sole emphasis on production loans, prohibitive transaction costs for tenders and borrowers, failure to mobilize savings, and overly complicated procedures. The contradiction between a highly diversified rural financial infrastructure and lack of access of the rural masses to financial services continues to plague India, this is paralleled by another contradiction between an emphasis on institutional diversity and a lack of emphasis on institutional viability. There are 97 commercial banks with 57,772 branches, 32,244 of them (56%) located in rural areas. Among them are 27 state banks which hold more than 80% of commercial banking assets and dominating the banking sector. There are 196 Regional
Rural Banks with 11,944 rural retail outlets. In addition there are
1,15,000 rural co-operative outlets. The total number of rural outlets of the normal sector is thus around 1,60,000. Yet according to a rural finance access survey conducted in 2003, over 70% of small farmers and landless have no deposit account; 87% have no access to formal credit. The commercial banking sector has been the first to be reformed, followed by the regional rural banks which is still ongoing.
Turning from the old to new world of rural finance during the second half of the 1980’s, NABARD argued that programs with the poor have to be savings led and not credit driven and that the poor have to have a say in their design. In the years to come, they looked or new partners, new delivery systems and new financial products. One of these new partners was MYRADA one of now 700 credit NGOs and
MFIs whose action research into credit management groups during
1985 – 88 was funded by NABARD jointly with IDA. The study was based on a new paradigm: savings first. Three options were discussed, all hinging on prior savings by the groups matching grants, matching interest free loans, or loans with interest. In search for a sustainable solution, NABARD opted for the latter (Seibel 2005).
6.3.5. Co-operative Finance: Replication gone as tray:
It is difficult to do justice to the complexities of the Indian financial sector and its changes over time. The financial co-operative sector is a major part of rural finance in India, which is included but however briefly. It dates back to 1892 when the government of Madras presidency felt inspired by the German Raiffcisen movement of savings and credit cooperatives and recommended just three years after the passing of the German Cooperative Act in 1889, to replicate the approach in India. In 1901 the government of India accepted the proposal and in 1904 enacted the Co-operative Credit Societies Act, followed by the more comprehensive co-operative Societies Act in
1912. This was to serve as a framework for promoting self help among farmers and artisans under the Government of Indian act of 1919, authority over co-operatives was transferred to the provinces, which were authorized to enact their own co-operative laws. IT is not clear whether state dominance evolved from here and how soon self help and self reliance were undermined by well meaning state interventions.
6.4. Linking Formal and Non-Formal Finance :
A financial innovation. Reform of the regional rural and co-operative financials sectors is not seen as a solution for reaching some 250-300 million rural poor. The trigger in the search for rural financial innovations in India to reach the poor was an external event. The
APRACA regional workshop in Nanjing, China in May 1986, where
GTZ presented a linkage model based on the existing formal and non formal financial infrastructure (Siebel 1985). Elements included SHGs as informal financial intermediary savings based credit linkages with banks, informal groups holding savings and credit accounts in banks;
NGO (SHPIS) as social, and initially also financial intermediaries; flexible models of cooperation between SHGs, NGOs and banks as autonomous business partners each with its own existing financial and institutional resources (APRACA 1986). Several Asian Countries took up the challenge. In contrast to those countries were a GTZ expert carried out feasibility studies, NABARD coordinated a field study of
SHGs in 1987 with a term from various Indian institutions. To identify SHGs, the team approached NGOs; SHGs without any link to an NGO, including the ubiquitous chit funds, were thus not included in the study.
Almost all the groups were of recent origin, emphasized self help were largely homogenous in terms of caste and activity, built a common fund from very small regular savings and interest income and lent to their members for period of 1-3 months at 2-3% interest per month.
Recovery of these loans was excellent and an impact, however small, was felt, reaching from emergency assistance to release from bonded labour. While the groups preferred to remain informal they shared basic features of formal bodies in terms of book keeping and management. Access to formal credit was virtually non existent. NGOs reportedly had “played a commendable role in organizing the rural poor into self-help groups and thereafter promoting their proper functioning given the very low resources base of internally generated savings on the one hand and some not able exceptions of “effectively developed credit links between the target groups and banks, the team thought it
“desirable to consider development of flexibility models of linkages appropriate for various situations.”
IN 1988 Bank Indonesia, the Central Bank started a pilot project linking
Banks and SHGs in Indonesia, with technical assistance from GTZ.
With increasing participation from banks and NGOs, this become
APRACAs and GTZ’s first experimental station for linkage banking in
Asia. Given an abundance of financial self help groups in Indonesia the project limited itself to those and made no attempt to establish new groups. The general manager and alter chairman of NABARD Y.C. Nanda, visited the project several times, learning that the central bank had authorized its public and private banks to accept informal groups as customers and lend to them without physical collateral, repayment rates at the time were close to 100%.
Intensely monitored and reported upon at APRACA meetings and international conventions, it attracted widespread attention, among others by the president of the World Bank, who declared in the foreword of the World Development Report 1989 (pp iv, 119) “Informal financial institutions have proved able to serve the household, agricultural and micro enterprise sectors on a sustained basis.
Measure that link informal institutions to the formal financial system will improve that service and ensure a competitive environment. APRACA member institutions, including NABARD, felt inspired.
Reviewing the situation of rural finance in India again in 1989, it was observed that most of the 196 Regional Rural Banks (RRBs) were loss making and thus did not present a viable solution. This led to a discussion in parliament about the feasibility of a Grameen Bank, following the model of Bangladesh as a new national banking structure. Inspired by the linkage experience under APRACA,
NABARD argued for a different approach.
• Using the existing infrastructure of banks and social organizations.
• It should be savings rather than credit led.
• Using bank rather than donor resources. Between 1989 and 1991, NABARD (1991) entered into a policy dialogue with RBI to make preparations for a pilot project linking informal groups to banks. On 24 th July, 1991 RBI issued a circular to commercial (RPCD No. Plan B.C. 13/PL-09-22/90-91) advising them to actively participate in the pilot project refinanced by NABARD, for linking SHGs with banks. The groups may be registered or unregistered, have 10-25 members, should have been in existence for atleast six months, and should have actively promoted the savings habit.
The pilot phase covered the period 1992-96. The banks noted a contradiction between a directive of the RBI of 27 December 1985, which restricted the opening of savings accounts and the circulars of
RBI and NABARD authorizing bank linkages of informal groups. Self
Help Groups registered or unregistered may be allowed to open savings Bank Accounts with banks.” AT mid term, March 194, 637
SHGs (80% women’s groups) with 11,000 members most of them women, had be credit linked to 28 banks, comprising 16 commercial and 12 regional rural banks. 34 NGOs were involved as facilitators.
Large number of officers of NABARD were sent to MYRADA and other
NGOs for exposure training. By March 1996, 4,757 SHGs with 80,000 members had been mobilized by 127 NGOs and credit linked to 95 bank branches. During the pilot phase mainly SHGs were linked to banks that had previously been established by NGOs. NABARD evaluated the project and found that the program was highly suitable for poor and very poor women particularly in marginal, resource poor area, membership has come mostly from the poorest section of the society; women frequently need credit, but at irregular intervals; they use the loans for productive and non-productive purposes, with a trend towards productive investments incomes have gone up, even the poorest of the poor do save and their savings increase with the income; Transaction costs of banks and SHG members go down the repayment rate is close to 100% in contrast to the usual rate of 50 – 60% in agricultural credit. IN comparison to the
Grameen Bank Model, NABARD found that “the SHG linkage model appears more sustainable and appropriate in the Indian conditions were (India has) in place a vast network of rural bank branches… and
SHGs which are functioning on their own and waiting to be linked to the banking system” (Nanda 1995).
Nationwide mainstreaming started in 1996 after clarifying two issues by circular (i) SHG members who had earlier defaulted on bank loans and were therefore not bankable could obtain loans from the groups’ own internal funds if decided (ii) informal groups were limited to 20 members, beyond which they would be required to legally register. To implement mainstreaming, NABARD did the following (i) it provided refinancing to participating banks (ii) it declared SHG banking the dominant, but non-mandatory approach of lending to the poor replacing bank retail lending (iii) it propagated its grand vision of one million SHGs, representing a population of 100 million of the rural poor, to be credit linked by the year 2008 endorsed by NABARD regional directors and subsequently articulated by union government in all its budget speeches (iv) it created a Micro credit innovations Department
(MCID) as the program steering unit, with representations in all states through Micro Credit Innovation Cells (v) it set up a special fund to finance massive capacity building measures as the motto of expansion
(vi) it supported the establishment and maintenance of SHGs, through numerous NGOs and GO’s and (viii) it subsequently allowed for initiatives to organize SHGs in self sustained federations (Nair 2005) under a new legal form as Mutually Aided Co-operative Societies
(MACS).
6.4.1. MFI and their approaches:
There is a vast network of banking and cooperative finance institutions in India and therefore formal financial services are, in theory, available and accessible to low income families in virtually every part of the country. However their availability is a mirage. Stung by the deficiencies of the directed credit programmes, particularly in the
1980s, the banking institutions in India have virtually withdrawn from lending to the poor while the cooperative credit system is bankrupt and all but defunct in large parts of the country.
It is in this situation that the non-government microfinance sector has attempted to provide an alternative to the often high cost informal financial service providers on whom most low income clients must rely. Despite the supporting efforts of apex funding organisations such as
NABARD and SIDBI, however the outreach of the microfinance sector remains minuscule in relation to the need. Barely 3 million of the estimated 60 million poor families in India have been covered by the microfinance sector. While many MFIs and the NABARD programme, have done well in terms of promoting a semi formal credit culture, however this success has been achieved at the cost of flexibility.
Formal financial services are, in theory available to low income families mainly through 33,000 so rural and 14,000 suburban branches of the major banks and RRBs and by 94,000 cooperative outlets – either bank branches or villages level societies. Financial services to the poor are also available from the village or (town) neighbourhood – level agents of NBFCs. The RRBs, in particular were established specifically in order to meet the credit requirements of the poor small and marginal farmers, landless workers, artisans and small entrepreneurs and should, therefore, have emerged as a major source of microfinance. A total of 1,40,000 institutional outlets serving the rural sector and the poor implies the availability of one outlet for every 5,600 persons – in theory, a very favourable ratio for creating to the financial needs of the poor.
For many years, bankers and senior government officers were fond of describing the government of India’s main poverty alleviation programme the Integrated Rural Development Programme (IRDP) as
“the world’s largest Microfinance Programme”. And so it was. It involved the commercial banks in giving loans of less than Rs.15,000 to poor people and, in nearly 20 years, resulted in financial assistance of around Rs.250 billion to roughly 55 million families. The problem with IRDP was that its design incorporated a substantial element of subsidy (25 – 50% of each family’s project cost) and this resulted in extensive malpractices and misutilisation of funds.
Over the past 20-25 years the resultant vacuums in the financial system has started to be filled initially with the pioneering efforts of organizations such as
SEWA Bank (Ahmedabad) and Working Women’s Forum (Madras) but, more vigorously during the 1990s, by the entrance of significant numbers of non- government organizations (NGOs) into microfinance. Current estimates of the number of NGOs engaged in mobilizing savings and providing micro-loan services to the poor lie in the range of 800, 1000 organisation. Initially, many
NGO microfinance institutions (MFIs) were funded by do not support in the form of revolving funds and operating grants. In recent years, development finance institutions such as NABARD, SIDBI and micro finance promotion organizations such as the Rashtriya Mahila Kosh (RMK – the National
Women’s Fund) have also started to provide bulk loans to MFIs. This has resulted in the MFIs becoming intermediaries between the largely public sector development finance institutions and retail borrowers consisting of groups of poor people or individual borrowers living in rural areas or urban slums. In another model, NABARD refinances commercial bank loans to self help groups (SHGs) in order to facilitate relationships between the banks and poor borrowers. Though the (mainly) NGO micro finance sector has made a start in providing “user friendly” formal financial services to the poor its outreach is still miniscule in comparison with the need. A compilation of support provided by major institutions to micro finance in India shows that the cumulative disbursement of bulk loans to MFIs by domestic financial institutions did not exceed Rs.3.5 billion (US$ 72 million)by March 2001 with an outreach to less than 2 million families – at best less than 5% of the poor in
India. Even allowing for a significant volume of donor grants, the total coverage is likely to be under 3 million families.
The common characteristics across these current approaches to the provision of microfinance services can be summarized as follows:-
Table 6.1. Microfinance Services
Financial Characteristic Description Service
Credit Loan amount Determined by the longevity of the clients association with the MFI. Not often directly related to the credit needs of the borrower.
Loan term Usually 12 months, occasionally less, sometimes greater.
Repayment Monthly or weekly usually fixed, equal installments amounts.
Interest Range : 24-36% usually levied as a flat charge charges partially to simplify calculations for both the MFI and the client. Some MFIs in India charge lower rates but unfortunately suffer from poor sustainability as a result.
Collateral No physical collateral but often linked to some compulsory savings component which acts as financial collateral. Some MFIs also create reserve funds to cover the risk of default.
Financial Characteristic Description Service
Savings Amount Grameen: Compulsory usually, a fixed deposited proportion of the repayment installment.
SHG: Compulsory fixed amounts per (weekly or monthly).
Insurance Life Some MFIs are starting to offer life insurance covering client loan repayments plus a small payment to the family in case of the death of the client. This is done either through the creation of a reserve fund for the purpose or by buying insurance from the organized sector on behalf of the client/ member.
Source : Manual of NABARD – 2008.
6.5. Micro enterprise is a type of small business, often unregistered having five or fewer employees and requiring seed capital of not more than $ 35,000.
The term is often used to refer to a business with a single owner – operator and no employees.
Generally speaking
• In developed countries micro enterprises comprise the smallest end (by
size) of the small business sector, whereas
• In developing countries, micro enterprises comprise the vast majority of
the small business sector – a result of the relative lack of formal sector
jobs available for the poor. These micro entrepreneurs operate micro
enterprises not by choice, but out of necessity. Micro enterprises typically have little to no access to the commercial banking sector, they often rely
on “micro loans” or micro credit, in order to be financial. Micro finance
institutions often finance these small loans, particularly in the Third World.
Those who found micro enterprises are usually referred as entrepreneurs.
The terms micro enterprise and micro business have the same meaning,
though traditionally when referring to a small business financed by micro
credit, the term micro enterprise is used. Similarly when referring to a
small, usually legal business that is not financed by micro credit, the term
micro business is used.
6.5.1. Micro enterprise Development:
Micro enterprise development projects can serve four major objectives (i)
Poverty reduction (ii) The empowerment of women (iii) Employments generation and (iv) Enterprise development as an end in itself. Micro enterprise development contributes to widening the pool of entrepreneurship available to society and it broadens the base of the private sector.
Some aspects of micro enterprise development are size, gender, location and sector of activity. Most micro enterprises are single person, owner operated enterprises or slightly larger units engaging one or more family members.
Enterprises that hire wage employees tend to be the exception. A higher proportion of livelihood enterprises tends to be owned and operated by women than do growth oriented micro enterprises. Women run livelihood enterprises out number those run by men in many countries. Certain livelihood enterprises tend almost invariably to be run by women, and indeed to viewed as women’s enterprises in some cultures, such as poultry rearing and weaving. In the seven countries studied in Hiedholm and Mead (1995), the share of enterprises owned by women ranged from 46 to 84 percent with women owing more than half in four countries (or 54 percent) in the six cost countries). There is no standard classification by sector and sub sector of activity for micro enterprises. The most useful classification of micro enterprises from the policy point of view is with respect to their needs and the constraints they face. A distinction often made in the literature is between
“survival” (sometimes called “subsistence”) enterprises on one hand and
“viable” enterprises on the other. A “survival” activity is said to be one into which the entrepreneur is often pushed for want of more profitable alternatives, whereas one is attracted, or pulled into a viable activity by considerations of profitability, and is an entrepreneur by choice. In the former case, the activity is often just one of many part time or seasonal activities undertaken to support family income, whereas in the latter case it is usually the main source of family income. In the case of survival activities, usually no skills or very rudimentary skills are involved, so that there are very low entry barriers to the activity, and it is overcrowded. In the case of “viable” activities, considerable experience and skills are often involved which restrict entry. In the former case, net earnings tend to be used for survival, where as in the latter some part of the surplus is reinvested in the expansion and growth of the enterprise, with potential for growth. Such as tailors moving into garment making, while the distinction between “survival” and “viable” enterprises in the form above is useful from a descriptive point of view the value laden terminology it uses has misleading implications for policy and should therefore be used carefully, if at all. While it is true that many people are “:pushed” into survival activities, once in them, they often stay in them by choice, not only because they do make a living out of them, but for variety of psychological reasons that are not easy to quantify. Survival activities are indeed often among several secondary sources of income of the household, while viable activities are more often the primary source. Survival activities tend to grow rapidly during times of stress. Several studies have found that most of the enterprises financed by micro enterprise programs are secondary sources of household income and are often seasonal, intermittent and part time.
However, it is misleading to move from this finding to normative conclusion that survival enterprises do not require assistance. The challenge is to increase the vital supplement to the household income they represent. There may be a need to balance the abandonment of certain goods and services with the general process of growth. The effort should be to make them more productive as long as they exist. If they are part time or seasonal, programs should be designed that take this into account.
Most survival enterprises do earn small surpluses. The fact that the surpluses tend not to be reinvested for expansion is not an inherent characteristics of survival enterprises. Rather, it is a reflection of the poverty of the entrepreneurs who operate them. They tend to apply their surpluses to household expenditure to sustain and raise their level of living.
Table 6.2. Sectoral classification of Micro enterprises.
Sector Livelihood Enterprises 1. Non crop agriculture related Pig, goat raising, milch cattle, backyard activities poultry, vegetable growing on leased land, fruit trees on home stead sericulture. 2. Trading Ambulant vegetable vending, buying and sell fish. 3. Food and refreshments Juice stand, small tea shop, candy and snack stall. 4. Food and agro-processing Rice cakes. 5. Manufacturing a) Textiles Pit loom, seamstress. b) Wood, rattan, bamboo, and Matt and basket weaving rotten furniture. grass products. c) Footwear and leather Wayside shoemaker. d) Bricks, tiles and pottery Village potter. e) Handicrafts Hats for local market. f) Fabricated metal products Simple agricultural implement maker and repair services. roadside bicycle repair. 6. Fishing Single person fishing boat. 7. Transport Cycle rickshaw, mule, bullock cart. 8. Other Services Wayside hair dresser.
Source : Manual of NABARD – 2008.
The potential of survival enterprises for growth is usually limited by a host of factors relating to both the environment, and to the lack of skills of the entrepreneurs themselves. The absence of skill requirements in survival activities does indeed result in low barriers to entry and to overcrowding. Very few survival activities have the potential for growth beyond a certain size and level of income yielded, and this is the crucial distinction between the two types of enterprises. Micro Enterprises can be classified into growth oriented micro enterprises and
Livelihood Enterprises. The growth oriented Micro enterprises include :
• Stall fed mini-dairy of high yielding cows “scientific”, poultry or duck
raising, fish fry and fingerling raising.
• Larger grocery store, vegetable wholesaling.
• Restaurant or tea shop at busier location with hired employees.
• Packaged candies, processed meat products, perhaps with labels.
• Power loom, garment maker, bulk orders for uniforms.
• Larger furniture – making unit.
• Larger ready made footwear making unit, leather bags.
• Larger brick making unit.
• More sophisticated handicrafts for the export market.
• Small engineering workshop doing job work, repairs to heavier agricultural
implements.
• Larger mechanized boat with crew members.
• Mechanized three wheeler, hand tractor
• Rental services.
• Beauty parlour.
Table 6.3. Livelihood Enterprises
1. Capitalization Relatively low.
2. Education Little formal education
3. Skills and Relatively low, except for skills acquired experience traditionally, as in handicrafts, trading often a fertile training ground for later manufacturing of same product.
4. Gender Participation of women.
5. Sector Higher proportion in livestock, backyard poultry, food processing and petty trading.
6. Competition Usually function in perfectly competitive markets with low barriers to entry and little scope for cutting costs by intensive use of family labour and even by offering credit.
7. Seasonality Often seasonal, tied to crop cycle, school year major festivals.
8. Contribution to Usually a secondary source (although vital). household income
9. Whether only Usually one of several “multiple” enterprises (to enterprise compensate for seasonality and low returns).
10. Use of hired labour Mostly use family labour.
11. Surplus and Surplus limited and often plowed back into reinvestment household expenditure.
12. Use of credit Trading activities often started on a consignment basis.
13. Potential for growth Limited in terms of new employment generation.
Source : Manual of NABARD – 2008. Micro enterprises: Details of the micro enterprise functioning include:
• Higher but initial capitalization often similar.
• Usually at least secondary schooling required.
• High participation of women.
• Niche markets.
• Less affected by seasonality.
• Often primary.
• Involvement of relatives and children.
• Reinvestment of surplus.
6.5.2. Micro enterprise and Economic Self Sufficiency:
Just as assistance rendered to the two types of enterprises corresponds to two different sets of development objectives, these objectives themselves correspond to two major types of programs.
Livelihood programs have poverty reduction as their main objective and seek to upgrade the productivity or increase the turnover of the multitude of livelihood enterprises. They entail bringing about small improvements for many enterprises, often providing only credit which is why they are sometimes characterized as being “minimalist”. Growth oriented micro enterprise programs on the other hand have enterprise development as their immediate objective and attempt to lift micro enterprise to a qualitatively higher level of sustainability, setting them on the path to long term growth and seeking to provide a comprehensive range of services including credit, training, technical assistance, and the inculcation of business skills. Being more staff intensive and entailing forms of assistance which, with the exception of credit, take a longer time to deliver, growth oriented micro enterprise programs which can reach a much smaller number of enterprises. There is a trade off therefore between making a short term impact.
Micro enterprises … Livelihood Growth oriented consist of Activities Micro enterprises
which tend …. Poverty Employment Reduction and generation and themselves to Women’s Enterprise the objectives of Empowerment Development
Livelihood Micro enterprises Through … Programs Programs
Enterprise Enterprise “Expansion” “Transformation” (but usually only (Escalator) one step up)
Figure 6.1. Two types of programs for Economic Self Sufficiency
Source: Manual of NABARD. (Sept. 2009)
Mostly through self employment on the one hand and longer term growth oriented enterprise development on the other, but for a much smaller number of direct beneficiaries.
6.5.3. Micro enterprise and Women:
The empowerment of women is an object that goes beyond increasing the income of low income women. Women have other less tangible priorities, such as a more equal role, and a greater sense of efficacy, within and outside the household. Micro enterprise programs can lead to empowerment in its social as well as economic dimensions. The mobility of women and their access to information is strengthened by the process of participation in micro enterprise program activities, including attendance at weekly meetings and other interactions in the public sphere that come about as a result of economic activities. Empowerment leads in turn to social benefits. The micro enterprises have led to a certain level of women’s empowerment such as physical mobility, economic security, ability to make various purchases on her own, freedom from domination and violence within the family, political and legal awareness, participation in public protests and political campaigning.
Women constitute by for the largest share of borrowers of several major micro enterprise programs in South Asia, both rural and urban. These programs help women in building up self reliant organization through which women can develop leadership skills and lobby to remove some of the policy biases, market distortions and legal and regulatory constraints in the working environment facing them.
Micro enterprises have built up the creditworthiness of women as reliable borrowers over a number of years, they are now accessing much larger and longer term loans for their families. This aspect of empowerment contributes to the role of women in decision making in the family and their status outside it. In the course of forming the micro enterprise, it is also true that in some societies loans granted to women are either fully or partially controlled by men, while the responsibility for repayment remains with women. But this also leads to welfare enhancing and development of the micro enterprise. A recent study indicates that 39 percent of loans provided to women by four major
NGOs are either fully or partially controlled by men, while, further 24 percent are partially controlled by themselves.It was also seen that when women do control loans, it is usually for traditional women's micro enterprises and their activities. Study also finds that a higher proportion of 55 percent of widowed separated or divorced women fully control their loans. Given differences in cultural attitudes to women’s work and autonomy, women’s enterprises and relatively more important in some countries than in others. However, women’s enterprises are present in all countries and share certain common characteristics.
Characteristics of Women’s Micro enterprises: Women's micro enterprises tend to be home based because of their family responsibilities especially in
South Asia because of traditions of female seclusion as well. Chen et al
(1996) point out that land surplus, labour scarce communities often assign women work outside the home, whereas land scarce, labour surplus communities are more likely to confine women to tasks within the homestead.
Similarly, the norms of good and bad behaviour vary. In land surplus and labour scarce societies, women’s mobility outside the home tends to be more condoned, than in labour surplus societies. Another characteristics of women’s enterprise is the high degree of concentration in activities with the lowest capital and skill – entry barriers which makes them overcrowded, with low return and subject to short term volatility. Due to the burden of domestic work, such enterprises tend also to be part time, to constitute a secondary source of household income (the main being the husbands wage labour) to be seasonal and to be one of several multiple activities. Women enterprises are concentrated in sectors with particular case of entry and low returns, new starts and closure tend to be higher for enterprises run by women, and to be particularly sensitive to changes in the overall level of the economy. Closures take place not only because of business failures, better opportunities (moving from one business enterprise to another) as well as personal reasons, such as illness. The personal reason taken into account, female enterprise closure rates are higher Women's enterprises tend to be relatively small, have informal structures, flexibility, low capital needs, modest educational requirements and depend on local raw materials. Women’s micro enterprises are also characterized by their dependence on family labour and limited technical and managerial skills. These enterprises are not registered, usually maintain no business records and do not have access to credit from formal credit institutions.
Chapter – 7
ROLE OF GOVERNMENT AND NON-GOVERNMENT ORGANISATION FOR ENTREPRENEURSHIP DEVELOPMENT IN MAHARASHTRA.
There are several government and non-government organizations who focus on the Development of Women Entrepreneurship process in
Maharashtra providing their services and products. They are as follows:-
7.1. Maharashtra Centre for Entrepreneurship Development (MCED)
The state promoted organizations SICOM, MSSIDC, MIDC, MSFC,
MELTRON and MITCON conducted a study and found that there was a need for entrepreneurship development trainings as the District
Industries centre was funding entrepreneurs who did not have adequate knowledge to manage their enterprises and make them profit earning organizations. MCED is an apex body of the government of
Maharashtra devoted to training entrepreneurs.
The MCED was born out of the need for the entrepreneuring society for securing professional and practical training on entrepreneurship to individuals and developing them as entrepreneurs in Maharashtra, in the year 1988. It is a state government promoted organization sponsored by the State Industrial and Investment Corporation of
Maharashtra (SICOM), Maharashtra Small Scale Industries
Development Corporation (MSSIDC), Maharashtra State Electronics
Corporation (MELTRON), Maharashtra Industrial Development Corporation (MIDC) and Maharashtra Industrial Technical Consultancy
Organisation (MITCON). The headquarters of MCED is at Aurangabad with regional offices at Mumbai, Pune, Nashik, Nagpur, Amravati,
Kolhapur with a trainer in each district.
MCED was not provided with any financial support directly by the State government or the Central Government. It however, had to move around marketing its programmes and getting sponsorship from various governmental and non-governmental organizations and fees from the participants of various programmes. Since its inception, 1988
The focus of MCED activities in on developing entrepreneurs. The working of MCED is based on the concept that “Entrepreneurs need not be born, they can also be developed”.
The main objectives of MCED are :
♦ To spread the entrepreneurial culture
♦ To develop entrepreneurs through systematic training.
♦ To disseminate information and data regarding entrepreneurship.
♦ To help industries and institutes in mobilisation of human resource
in a more entrepreneurial way.
♦ To create awareness about emerging and future entrepreneurial
opportunities and challenges.
To achieve these objectives, MCED conducts a variety of activities like the Entrepreneurship Development Programmes, Entrepreneurship
Awareness Programme for Women and Training for the Prime Minister
Rojgar Yojana etc. 7.2. Annapurna Mahila Mandal (AMM)
Annapurna Mahila Mandal is an NGO in Mumbai set up in 1975 during the International Year for Women. A large number of women working in the textile mills of Mumbai found themselves without job because the mill owners did not like their profits being affected by a set of rules and regulations beneficial for women. AMM chose to adopt a constructive and positive stance by finding alternative ways to women’s economic empowerment. Since, the poor women did not have capital resources to utilize their entrepreneurial instincts, AMM plays the role of meditating between the banks and these women. This brought the written culture banking procedure within the grasp of poor, illiterate women. It is one of the few NGOs in India, which opted to work as an intermediary between the formal banking system and the poor women micro entrepreneurs in the informal banking sector. From facilitating women’s access to institutional credit AMM has now set up its own credit and cooperative society with systems that are flexible and member friendly.
Credit has helped these women to find self employment and income on one hand and self esteem and status on the other. AMM took the responsibility of reaching out to women micro entrepreneurs in slums of Mumbai and organizing them to help them free themselves from the exploitation of money lenders. As an organization helping the women micro entrepreneur, AMM undertakes the following activities.
♦ Identification of beneficiaries, who are self employed, to use the
loan to invest in productive activities.
♦ Fulfilling all the procedural requirements of banks on behalf of
illiterate beneficiaries.
♦ Explaining the procedures of banks to beneficiaries in the local
language.
♦ Inculcating in the borrowers a sense of responsibility towards
repayment of the loan through meetings and the instrument of
group guarantee.
♦ Collection of repayment dues from the door step of the loanee so
that she does not loose a full days earnings in “waiting at a bank”
and
♦ Monitoring and utilization of the loan for the started purpose.
The process of enabling women to become micro entrepreneurs and self-employed workers have involved a great deal of social animation aimed at promoting organized behaviour among them. It has helped the women to discover the strength within them by collectively looking at their own survival problems. It has also included training them to manage the work place, market, credit and enhancement in productivity and income earned. Today, many of these women are occupied in selling vegetables, fruits, bangles, flowers, fish, dry fish, grain, papad and masala sari fall beeding, toy making, tanning etc.
The objectives of the organization are as follows:-
♦ To educate women in general health, nutrition mother and child
care, family planning literacy, environmental sanitation and more.
♦ To delink women from greedy money lenders.
♦ To enable women to take independent decisions and move towards
self reliance.
♦ To motivate, organize and train rural and urban poor women to
acquire confidence and status in their household and neighbours.
♦ To enable poor women to accrue assets for their development.
♦ To give exposure to credit and financial knowledge and link them
with nationalized banks.
7.3. Bharatiya Yuva Shakti Trust (BYST):
Bharatiya Yuva Shakti Trust (BYST) is a unique non-government organization working in the field of “Entrepreneurship development” for youth in the under privileged category. The trust was founded in 1991 at the initiative of the
Prince of Wales and the Business leaders Forum and is managed by
Confederation of Industries in India. Since its inception, the trust has launched more than 300 new ventures in Delhi, Haryana, Chennai and Pune. BYST is a non-profit organization which helps under privileged youth in the age group of
18-35 years to start their ventures. It has its unique model of enterprise development in India, due to the fact that it is industry initiated, supported and managed with its specific feature of mentoring and unique selection process of its beneficiaries. The mission of BYST is to identify, nurture, groom and empower the disadvantaged young assistance and involvement of the corporate sector.
BYST has the following long term objectives :-
♦ Upliftment of underprivileged Youth: BYST helps to promote the social and
economic welfare of and upliftment of under privileged youth with
entrepreneurial skills.
♦ Create awareness of the real option of self employment through the
formation of business enterprise that provide employment opportunities to
others. To convert job seekers in to job creators, helping to alleviate the
unemployment situation in a much broader framework.
♦ Corporate Responsibility amongst Indian Industry and multi national in
nation building by supporting financially and through business counseling
of small enterprise of under privileged youth.
♦ Replication by acting as a role model for small enterprise development by
providing the concepts of mentorship and guidance among financial
institutions that currently only provides monetary support. To help them
address the under privileged youth sector. Role models are provided by
BYST in major regions on India.
♦ Franchising options for appropriate organization corporation enable BYST
to outreach to new areas. Research and Development by BYST on
franchising of this non profit organisation enable BYST to act as a role
model to others.
♦ Young Women: BYST to ensure that at least 50% of the new ventures
started will be by female entrepreneurs. ♦ Sustainability: To become self sufficient through the interest earned on
corpus funds and the repayment of BYST’s seed capital.
♦ Financial Leverage: Relationship built with financial institutions will
increase the financial leverage by BYST seed capital.
♦ International linkage: To link to similar youth business Trust developing in
other countries of the region and globally to learn from each other and
share technical expertise.
7.4. National Small Industries Corporation Limited:
The National Small Industries Corporation Limited (NSIC) was set up in February 1955 by the government of India to assist, finance, protect, promote and develop small scale industries in the country. The
Corporation provides support to the small scale industries sector in the following area: i) Machines on hire purchase. This scheme was launched in March
1956 to supply both indigenous and imported machines on easy
hire-purchase basis to help new small scale and ancillary
industries to establish and to help the already existing industries
to modernize. NSIC provides single window service to
entrepreneurs for the import of machinery. ii) Marketing Assistance: The Corporation takes up marketing of
small industries products within the country. The Corporation
since 1976 in its internal marketing programme adopted a
consortia approach that is units manufacturing the same or similar product form a consortium. The corporation explorer
markets, secures orders for bulk quantities and places orders
with small units according to their consortia approach are hosiery
items, electric fans copper clad utensils, sewing threads etc. iii) Supply and distribution of indigenous and imported raw
materials. The corporation has been supplementing the
availability of raw materials to a large number of small industries
in the country through its distribution system. Under the industrial
raw material assistance centre scheme, the corporation assists
in the impact of OGL items, the Corporation assists in the import
of OGL items as per the import export license raw material from
local sources because units often cannot lift raw materials in
bulk. The Corporation however supplies raw materials to small
units according to certain terms and conditions. iv) Exports: The Corporation has adopted a single window
assistance approach for export of small industries products. It
render export assistance to small units in the form of obtaining
enquirer, specifications and samples through its indenting
agents, and assists small units to develop counter samples and
to dispatch them for approval of the foreign buyers negotiating
contracts with foreign buyers and forming them out to small
scale units to attend to the entire export documentation work, to
arrange for import of raw materials and to monitor production, to
make 90% payment in advance to the units, to obtain licenses
etc. v) Project Exports: Turnkey projects were taken by NSIC in 1975.
The first turnkey project was with the government of Tanzania,
and since then, it has executed more than 50 projects. There is
considerable demand from the developing countries for
assistance in supply of projects on turnkey basis. This incurred
preparation of project report, infrastructure facilities, training,
supply of equipment, commissioning of plants and deputation of
personnel for initial operation and training in the host country.
Many small scale units in India are associated with the execution
of such products. vi) Training: The NSIC also runs prototype development and
training. The objectives being-
(a) To impart practical and classroom training in several
industrial trades.
(b) To develop prototype of machines, equipment and tools
which are then passed on to manufacturing units for
commercial production.
(c) To take up production of machines and equipment as per
market acceptability.
(d) To design, develop and produce improved tools for use of
rural artisans so that their productivity and thereby their
earnings may increase etc.
7.5. Small Industries Development Organization (SIDO)
The small industries Development organization (SIDO) is the national apex agency under the Ministry of Industries, headed by a development Commissioner with its headquarters in Delhi. Its functions through a network of small industries services institutes, branch institutes and extension centre. The objective of this organization is to supplement the efforts of the state governments and co-ordinate their activities and those of other agencies so as to facilitate the development of small scale industries in those states. The functions of this organization are i) To provide policy advisory services including an all India policy
and programme for the development of small scale industries
advise for government of India and state government on matters
relating to small scale industries, effecting liaison between state
and centre government or between financial institutions etc. ii) Providing technical advisory services to existing and potential
entrepreneurs such as preparing designs and drawings for
production equipments, new products and by-product layout,
installation and operation of plant and machinery, choice of
machinery etc. iii) To provide workshop and laboratory services to small scale
entrepreneurs which include testing raw material, carrying out
experiment on new and substitute raw materials, to demonstrate the use of modern technical processes on selected machines,
assist in quality control etc. iv) To provide management consistency, services such as advice
on cost reduction quality improvement, financial management,
production management marketing etc. v) Management and technical training service such as improving
and upgrading the skill of workers and managerial personnel. vi) To provide economic services to the entrepreneurs such as
markets forecast, background information for the formation of
government pans and policies, prospects of further
developments, selection of new items of productions or
expansion of existing ones etc. vii) To provide information services such as guidance on the
establishment of new enterprises, to prepare and publish
promotional literature like technical bulletins, model schemes,
industry prospects sheet etc. viii) To provide assessment and general services like recommending
licensing for machinery, emergency spares or to recommend
small scale industries to public and private large industries for
supply of stores or financial assistance from state bank or to
undertake exports, advice on procuring machinery on hire
purchase basis etc. ix) To undertake entrepreneurial development. The entrepreneurial
development division and its cells in the states provide advice on
industries that have a good scope for development, suitable location and infrastructure facilities available size of an
enterprise and its investment, sources of supply of machinery
and equipment, raw material, labour, methods of production and
production management, training perspective entrepreneurs and
managers of existing small units etc.
7.5. Central Social Welfare Board:
The Central Social Welfare Board (CSWB) is one of the pioneering national organizations in the country. It has taken up various programmes for the welfare of children, women and the handicapped.
It runs vocational training courses leading to better employment prospects for poor and needy women. It provides socio-economic programme assistance to voluntary organization to take up a wide variety of income generating activities for poor women and the handicapped. The Board also gives training to rural women in public co-operation to enable them to participate more effectively in the process of social and economic development and to acquire leadership qualities.
One of the important objectives of the socio-economic programme of the Board is the establishment of ancillary units, as feeder units to larger industrial undertakings. Another significant feature of the socio- economic programme of the Board is the organization of self employment units through which many women have been able to acquire sewing machines, knitting machines, handloom and such other equipments which they can use in their own homes and thereby earn a substantial income. Assistance is provided to women through voluntary organization, in the form of interest free loans for the purchase of the equipment required by them, and grants to meet working capital requirements to carry out small business, ventures like vegetables and rice vending, fish vending, selling up general stores etc.
In the recent past, the board had made efforts to involve the nationalized banks to supplement the Boards assistance to voluntary organizations. The Boards assistance for setting up production units is in the form of grants, which cover the cost of machinery and equipment, the expenditure on training and also a part of the working capital. Bank finance is made available for augmenting the working capital requirement of the units. Assistance from the Board includes a fixed amount towards deposits with which an organization can commend Bank guarantee.
This approach of involvement of financial institutions in the economic activities of voluntary organization is gaining momentum and the Board intends to increase the involvement base, thereby to generate large amounts of credit on easy terms for pursuing economic activities.
7.6. National Alliance of Young Entrepreneurs:
The National Alliance of Young Entrepreneurs (NAYE) was set up to promote and develop entrepreneurship among women. The women’s wing of NAYE was set up in 1975 the international year of women announced by the U.N. The progress made by the wing in securing the rightful place for women in the national economy since then has been impressive. The women’s wing has set up chapters in five states. In other states, associations of women entrepreneurs have affiliated themselves with the women’s wing of NAYE, making it the most representative organization of women entrepreneurs in the country. It has been instrumental in organizing three International Conference and Nine National Conventions in different parts of the country.
The eights convention of NAYE was held in New Delhi in September
1989. Over 300 women entrepreneurs attended it from 14 states and union territories, besides senior official from government departments, banks, financial institutions and other development agencies. The convention provided an opportunity to review the progress made so far and to recommend measures to give a vigorous thrust to activities in the coming years. An exhibition of products manufactured by women entrepreneurs was organized so as to give opportunity to women entrepreneurs to display their products so as to create a market for their products.
The background papers for the conventions covered subject such as women entrepreneurs their problem and successes, promoting women entrepreneurial activities in Goa, promoting entrepreneurship/ self employment among women in Gujarat, experience of GSFC in financing women entrepreneurs, status of women entrepreneurs in
Himachal Pradesh etc.
The 9 th National Convention of Women Entrepreneurs was held in
February 1991 in Trivandrum, Kerala. The convention of Women
Entrepreneurs covered topics such as technology and training, role of government agencies in promoting women enterprises and rural co- operatives.
It was during this convention, the definition of women entrepreneurs as formulated by the Ministry of Industry was debated upon at length. It was generally agreed that it might be pertinent to ask women entrepreneurs, who receive the benefit of financial incentives, to create employment for women. But, it was felt that if this was made compulsory, it would be discriminatory. The Ministry of Industry explained that through such incentives were misused at times by the men folk, at least employment would be generated. The convention strongly recommended that the percentage of financial incentive be reduced to 25% as against 50% stipulated by the government. The priority should be given by the financial institution and other promotional agencies to women desires marketing support to women entrepreneur, the convention recommended that the government make reservations for purchase of products/ services manufactured/ provided by women entrepreneurs. The convention also recommended
30% reservation for women entrepreneurs in ancillary industries and the industrial licenses must take it obligatory to provide sub-contracting for ancillary units promoted by women. It was further discussed in the convention that the Entrepreneurship Development Programmes (EDPs) conducted by different agencies, and their contents, needed revision. Efforts must be made to reach a large numbers of women, in urban as well as rural areas through target oriented EDP’s.
7.7. National Association of Women Entrepreneurs and
Executives:
The National Association of Women Entrepreneurs and Executives
(NAWEE) is an All India non-political, non-profit membership organization performance the following functions:-
• To act as a clearing house on problems and opportunities facing
women entrepreneurs at all levels and to assist them in self
development and protection.
• To act as a training and development institute so as to further equip
women to be able to meet the various challenges in their respective
environment.
• To work closely with industries and organizations concerned with
women entrepreneurs in establishing benchmarks on successful
operations through research and analysis.
• To work closely with the government and other public institutions on
the role women entrepreneurs in all spheres of economic and social
institutions.
• To act as a ‘spoke person’ for women entrepreneurs and help
project the correct image of its constituent members. • To establish branches (local, state) regional bodies and units of
NAWEE throughout the country.
• To establish hostels, dormitories and apartment facilities for women
entrepreneurs.
• To perform any other function(s) deemed fit by the office bearers of
NAWEE or by the National Government Council.
7.8. State Bank of India
The State Bank of India (SBI) is a pioneer in the financing of small scale industries and other priority sectors. As the premier banking institution of the country the SBI has contributed to the growth of small scale industries and several of its schemes are suitable for women entrepreneurs. The liebralise scheme caters to all the financial needs of SSI entrepreneurs viz. term loans, cash credit for working capital, better credit bank guarantees, packing credit for exports etc. In additions to this Bank have special schemes for SSI units, vis.
Entrepreneurs schemes and equity fund scheme. Where loans can be given at a very low/ nil margin to technically qualified and experienced persons. The equity fund scheme of the bank provided equity support to needy small scale units by way of interest free long term loans repayable over a period of 5 to 7 years after a moratorium of 5 to 7 years. Entrepreneurship development programmes conducted at the
Banks cost provide entrepreneurial and managerial skills training to those who have no exposure to business. In the service and small business sector, the Bank assists trading establishments, business enterprises providing services like laundries, tailoring, crèche, beauty parlour, manufacturing of ready made garments, transport operations etc. Entrepreneurs are also financed under government sponsored schemes like IRDP, SEEU, SEPUP etc. to make the assistance to women entrepreneurs more effective and to ensure a wide coverage; the bank has introduced the Stree Shakti packages. This involves a financial package aimed at reinforcing the banks efforts in the area of developing entrepreneurship among women. Concessions in respect to margin and rate of interest have been built into this package. A 5% reduction in margin for all categories of advances and concessions in the rate of interest varying from 0.5% to 1.5% are the two distinct benefits of this package. Also invested in the package are entrepreneurship development programmes designed exclusively for providing entrepreneurial and managerial skills to those women entrepreneurs who have no formal training on exposure to business. These programmes are free for women entrepreneurs.
7.9. District Industries Centres:
The setting up the District Industries Centres (DICs) through out the country was an important decision taken by the government of India since the announcement of the National Industrial Policy of 1977. The main thrust of the
Industrial Policy statement of 1997 was a on the effective promotion of cottage and small industries widely dispersed in rural areas and small towns.
The statement explicitly stated that whatever could be produced in the small and cottage sectors should not be produced in the large scale sector. The statement pointed out the need for a single organization at the district level for the effective development of small and cottage industries.
The Programmes of the District Industries centre was started on May 1, 1978.
It was a centrally sponsored scheme with a view to providing under one roof all inputs including licenses/ clearances, raw materials, machinery and equipment and arrangement for credit facilities as well as marketing. The
DICs, functioning under the Director of Industries and commerce, were envisaged to be the focal point at the district level for the promotion of small, tiny, village and cottage industries, widely dispersed in rural and semi urban areas. They are to provide all essential service and supports required by small entrepreneurs at pre-investment, investment and post-investment stages at the district level. The centers also assist entrepreneurs, Government
Corporation and financial institutions for implementing various supporting schemes such as seed capital assistance, financial assistance to entrepreneurs belonging to scheduled caste and scheduled tribes etc. DIC programme continued during the seventh plan and the share of the central government was raised to Rs.4 lakhs per DIC per year from April 1985 to meet the demands of entrepreneurs. During 1987-88, 4.75 lakhs small and artisan based units were established in the country providing additional employment opportunities to 11.85 lakh persons.
DICs have been established in almost all districts of the country. The total number of approved DICs now stands at 422 which cover 431 districts. The four metropolitan cities are outside the purview of this programme. The DICs function under the Director of Industries and Commerce. They provide services and facilities to entrepreneurs including the identification of a suitable scheme, the preparation of feasibility report, arrangement for the supply of machinery and equipment, provision of raw materials, credit facilities and input for marketing and extension services quality control, research and entrepreneurial training. The DICs role is also to ensure that small industries continue to be viable and for this purpose it provides all facilities to the entrepreneurs under one roof at the district and sub-district levels.
A General Manager who is assisted by seven functional managers and other supporting staff, heads each DIC. The seven functional managers deal with the following subjects.
• Economic Investigation
• Machinery and Equipment.
• Research, Extension and Training
• Raw Materials.
• Credit
• Marketing
• Cottage industries.
General Manager
Consultancy Committee
Functional Managers
Manager Manager Manager Manager Economic Machinery Credit Financial Cottage Investigation Equipment Management Industries Tiny
Manager Manager Manager Research Raw Marketing extension and Material training
Supporting Staff
Figure 7.1. Organizational Chart of DIC
Source: Manual of DIC
There are a number of non-governmental organizations working for entrepreneurship development among women. One such organization is discussed below:-
7.10. Mahila Arthik Vikas Maha Mandal (MAVIM)
Mahila Arthik Vikas Mahamandal (MAVIM) is registered under Companies
Act, 1956 having district officers in 34 districts of Maharashtra and Head Office in Mumbai. An officer form Indian Administration Service (IAS) is Chief
Executive of MAVIM as Managing Director.
The Board of Director consist official and non-official members. The Managing director appointed for MAVIM is an officer from Indian Administrative Service
(IAS).
The vision of MAVIM is empowerment of Women and objectives are as follows:-
• Building organization of women
• To build up capacities of women.
• Building confidence among women.
• Strengthening entrepreneurship among women.
• Building linkages between employment opportunities and markets
possibilities.
• Increasing participation of women in education and governance.
Board perspectives of MAVIM functioning:
1. MAVIM function as an Apex body for various is development scheme
promoted by the Central and State Government.
2. It organizes training programmes on issues of women development
along the lines of
• Training in capacity building.
• Skill Training and vocational trainings (based on agriculture and non-
agricultural activities). • It also functions as a coordinating agency between the self help groups,
financial institutions, voluntary organization and the concerned
government department.
MAVIM through the SHGs (Self Help Groups) implements several projects.
• Maharashtra Rural Credit Project (MRCP).
• Swarnajayanti Gram Swarojgar Yojana (SGSY).
• Ramai Mahila Sakshamikaran Yojana (Special Component Plan – SLP).
• Advisasi Vikas Prakalp – Tribal Sub Plan (TSP).
• Rashtriya SamVikas Yojana (RSVY).
• Krishi Saptak Yojana (KSY).
• NABARD “add – on”
• Mahila Swavalamban Nidhi Yojana.
• NORAD – Norwegian Agency for International Development.
• STEP – Support to Training and Employment Programme.
MAVIM has started its activities in 33 districts and also in metropolis of
Mumbai. MAVIM has progressed remarkably since then and also made remarkable progress in respect of Self Help Groups (SHGs). Taking into consideration achievements of MAVIM and its commitment towards the society the government has given responsibility to MAVIM of implementation of Ramai Mahila Sakshamikaran Yojana under which 20,2 50 SHGs of
Scheduled Caste women have been formed and under Tribal Sub Plan (TSP)
4600 SHGs of tribal women in 8 districts have been formed. Under these 2 schemes efforts are being made to form SHGs of poor and needy women and bring them in mainstream of society. As envisaged under these schemes 70 to 80% women are from scheduled castes or scheduled tribes and remaining
20 to 30% include women from poor, needy, deserted nomadic tribe categories of the society.
7.10.1 Maharashtra Rural Credit Project:
MAVIM was one of the implementing agencies for implementation of
International Fund for Agriculture Development (IFAD) assisted Maharashtra
Rural Credit Project (MRCP). The MRCP gave direction to functioning and working of MAVIM and influenced its policies for empowerment of women.
5321 SHGs covering 79,944 women from rural Maharashtra were formed under MRCP. The successful implementation of MRCP established that SHG is an important tool for women empowerment. Taking into consideration effective work of women empowerment done by MAVIM under MRCP, the
State government approved the proposal of MAVIM to work for promotion of
SHG in all the districts of the state. MAVIM continued to nurture and guide the old SHGs through existing Sahayoginis Formation of Federations of SHGs and bringing clarity about their role was given emphasis. The quality of SHGs formed under MRCP was very good due to well planned strategy and capacity building.
7.l0.2 Swarnajayati Gram Swarojgar Yojana (SGSY):
SGSY is centrally sponsored scheme for poverty alleviation and being implemented by Rural Development Department and District Rural
Development Agencies (DRDA). As per the procedure of the scheme gradation is done depending on age of SHG. Gradation is done jointly by representatives of banks, DRDA, GO or MAVIM. However many a times representatives of all these agencies do not come together, this creates a delay in the entire process keeping in view the practical difficulties for implementation of the scheme a detailed discussion was held in the workshop
“Vision 2020” held in December 2003 and all aspects were presented before
Hon’ble Principal Secretary, Rural Development Department, Officials of
Women and Child Development Department, Chief Executive Officers of Zilla
Parishads and Project Directors of DRDA’s.
7.10.3. Swyamsiddha – Integrated Women Empowerment Programme
(IWEP).
Central government sponsored India Mahila Yojana and Mahila Samruddhi
Yojana merged into a new scheme under the name Swyamsiddha –
Integrated Women Empowerment Programme (IWEP). Swyamsiddha is central government sponsored scheme and central government takes review in meetings once in every 2 months. Since women and child development is nodal agency, it takes review of the progress of scheme from time to time and makes available funds for the scheme. The central government undertakes visits to review the progress of the scheme.
7.10.4. Ramai Mahila Sakshamikaran Yojana
Ramai Mahila Sakshamikaran Yojana is formed exclusively for the scheduled caste women. During the 3 years of project period, apart from organizing women through SHGs, capacity building training programmes for women is conducted on various aspects and issues like gender equality, entrepreneurship, social awareness and self protection. The main emphasis under the scheme is given on formation of women SHGs and providing them micro credit out of their own savings through internal lending as well as through bank credit. Special emphasis is given on improving status of women in the society along with improvement of their financial status. Women are disadvantaged part of our society. This is more so in case of women belonging to scheduled castes. The self experience of the women indicates that these women who had seen life beyond doorsteps of house and those who are illiterate have doors open for them for progress and prosperity.
7.10.5. Adivasi Vikas Prakalp
The Adivasi Vikas Prakalp is basically for empowerment of tribal women for 8 districts of Maharashtra Nasik, Nandurbar, Thane, Chandrapur, Gadchiroli,
Gandia, Amravali and Bhandara under Tribal Sub Plan of Tribal Development
Department. Main objectives of the scheme is socio-economic development of tribal women, to organize them into pressure group and make available to them sources of information and knowledge.
7.10.6. Rashtriya Sam Vikas Yojana (RSVY):
Rashtriya Sam Vikas Yojana is centrally sponsored scheme being implemented by MAVIM. It is being implemented in each district in different way. This scheme is mainly focused on underdeveloped district of
Maharashtra. The main characteristics of scheme are
1. The focus of scheme is on formation of self help groups along with
capacity building of women and further skill development of women. 2. The scheme has provision for revolving funds for women who want to
start their entrepreneurship activities. Scheme has special provision of
building two MAVIM Mahila program on pilot basis. This prangan will
provide marketing and training facilities to women on district level.
7.10.7 Krishi Saptak Yojana (KSY)
Implementation of KSY started in 4 districts of Amravati, Washim, Chandrapur and Sangli. The scheme is very important as it envisages organizing women into SHGs and providing them with latest agro technological inputs. The objective of the scheme is to increase rate of agricultural production and its quality through capacity building of women by imparting knowledge of latest agro-technology and modern practices.
Objectives of the scheme are as follows:-
• Training of rural women to make their participation more effective in
agriculture.
• Making rural women self sufficient in farm management.
• Giving inputs of new technology of agriculture and provide women of equal
opportunities through capacity building.
7.10.8 NABARD add-on:
It was decided to implement ‘NABARD add-on’ project in 10 districts of
Buldhana, Usmanabad, Jalna, Kolhapur, Aurangabad, Hingoli, Latur,
Parbhani, Washim and Gondia with financial support from NABARD. Objective of Scheme:
• Formation of 1000 SHGs in 10 districts.
• Organize 15000 women through SHGs.
• Capacity building of women through SHGs.
Efforts were made to provide basic training to these SHGs on lines with other
SHGs. The members of these committees include lead district officers. These committees review and monitor the progress of the project.
7.10.9. Mahila Swavalamban Nidhi Yojana
The devastating earthquake affected Latur and Osmanabad districts in 1993.
The earthquake had wide spread adverse effect on women. MAVIM started
Maharashtra Emergency Earthquake Rehabilitation Project (EERP) with assistance from World Bank and Implemented Women Empowerment project.
The Mahila Swavalamban Nidhi Scheme in order to bring in women already organized in SHGs in development mode by imparting them entrepreneurship training and making available to them hassle free credit. District Resource
Centres were opened at Ausa and Khillari in districts of Latur and Usmanabad for socio-economic development of women from earthquake affected areas.It was proposed under the scheme to form 400 SHGs of women and provide them financial assistance for starting micro enterprises. The area of operation of the scheme was restricted to only 2 districts of Latur. However, as per the decision taken in 7 th meeting of Managing Committee of the scheme, the area of operation of the scheme was expanded to entire state of Maharashtra. A proposal is under consideration to convert Mahila Swavalamban Nidhi into
Micro Financial Institution (MFI). 7.10.10. NORAD – Norwegian Agency for International Development.
NORAD is a central Government sponsored scheme for imparting skill base training to women belonging to backward, widow, deserted, daily wage working, migrated, other backward class, economically backward, poor and other such categories. The subjects selected for training cover wide spectrum like computer learning, beauty parlour, typing, shorthand, ready made garment, jari craft and pattern work, embroidery, canteen management, book binding, community, health work, consumer electronic repair, electronic assembly, food processing, hair and skin care, handloom weaving, hosiery, honey production etc. A stipend of Rs.250/- per month is given to beneficiaries during the training. NGOs and district officers and Head Office of
MAVIM conduct the training programmes under the scheme. 100% expenditure of the training is received from Central Government.
7.10.11. STEP – Support to Training and Employment Programme.
STEP is central government sponsored scheme started in 1987. Under the scheme, the training is imparted to poor and needy rural women belonging to categories of widow, deserted, backward class, other backward classes and economically backward classes. The activities covered for training are poultry, sheep and goat rearing, dairy, sericulture development of waste land, agriculture fishery, handloom, handicraft, social forestry and khadi and village industry. Under this scheme 90% of assistance is provided by the Central
Government and remaining 10% is to be contributed by the institution.
7.10.12. Swarn Jayanti Sahakari Rojgar Yojana (SJSRY):
SJSRY is Central Government sponsored scheme for development of below poverty line (BPL) families of urban areas. The main objective of the scheme is to make available self employment and improve the standards of living of BPL families. Under the scheme, the encouragement is given to unemployed or semi employed person to start income generating self employment activities. The scheme is implemented by Municipal Corporations/Councils through NGOs.
Central and State Governments provide the financial assistance in ratio of 75:25. The scheme covers two employment programmes – main urban employment programme and urban labour employment programme. The sanction, monitoring and implementation of the scheme is looked after by State Urban Development Agency (SUDA) and District Urban Development Agency (DUDA).
7.10.13. Kamdhenu Scheme:
In order to enable needy women to undertake some income generating activity at their house itself and to make women financially independent as well as to give them priority in getting work related to manufacturing and trading sectors, it was decided to give preferential treatment to women institutions in tenders for supply of articles/ items required by various local bodies and government and semi government departments including zilla Parishad, Municipal councils, Municipal
Corporations etc. They require various articles like uniforms, bed sheets, pillow covers, clothes for patients, dusters, brooms as well as food items like papads, bed sheets, pillow covers, clothes for patients, cluster brooms as well as food items like papads, pickles and spices.
For this purpose women institutions should have been registered under
Registration Regulation Act, 1860, Public Charitable Act 1950,
Societies Registration Rule 1960 or under Companies Act 1956. It had been decided that 50% of supply orders will be awarded to such women institutions and they will be given 10% more rates than sanctioned tenders.
7.11. Self Help Group Movement and MAVIM:
MAVIM has been doing work of women empowerment through Self
Help Groups in many villages in state of Maharashtra. While performing its role as apex institution for women development in the state, MAVIM has taken decision to work along with other institutions working at breadth and length of the state in SHG movement in order to bring maximum number of women in development process. Initially,
MAVIM had discussions with 2 networks in Maharashtra viz “Mahila
Rajsatta Andolan” (MRA) and ‘Chalana’ as a step in this direction.
MAVIM and these two networks have created a state level common coordination platform in consultation. Main objective of this initiative are as under.
1. To strengthen the cooperation between Government and NGOs
to expand and strengthen SHG movement in Maharashtra.
2. To form a state level forum/platform to work as coordinator and
to study and to solve the practical difficulties and give right
direction to SHG movement in the state. Chapter – 8 DATA INTERPRETATION & FINDINGS
Entrepreneurial and Socio-Demogrpahic Profile of the Woman
Entrepreneur.
This finding attempts to draw socio-demographic profile of women respondents covered in the study. It includes Profile of the respondents and the entrepreneurial activities.
8.1.1. Age in years
50 & Categories 20 – 30 31 – 40 41 – 50 Total above Frequency 115 294 84 7 500
%age (23%) (58.8%) (16.8) (1.4%) (100%)
Age Distribution:
Age of respondents has been used to determine two aspects of entrepreneurship – age of venturing into entrepreneurship and the correlation of age with the kind of activity. The frequency and percentage distribution for age show that the highest percentage
(58.8%) is in the age group of 31 – 40 years followed by 20 – 30 years which is (23%). There was very negligible (1.4%) existing in age group above 50 years who venture into entrepreneurship. This indicated that women ventured in their mid age of life. The discussion also revealed 3 main reasons for this, increased needs in family, growing household expenses, education of children, marriage of daughters which forced women to look for sources of income to support the family.
Table 8.1.2. Educational Level
Categories Illiterate Literate Upto Graduation Total with no class VIII formal education Frequency 112 169 206 13 500
Percentage (22.4%) (33.8%) (41.2%) (2.6%) (100%)
Educational Qualifications:
Education is an important tool for increasing and improving the scope of women’s self employment and empowering them to think for themselves. The details of the table 8.1.2 shows that maximum respondent (41.2%) had studied upto class eight followed by respondents who are literate but with no formal education was
(33.8%) and the respondents with graduation was negligible with
(2.6%). From the details and discussion it was seen that education and entrepreneurship was inversely selected. The entrepreneurial activities undertaken by the respondents do not require much education as it did not have direct impact on the activities. The skills such as (cooking, stitching, grinding etc.) they possessed more importance for the management of their enterprise.
8.1.3. Religion:
Table 8.1.3. Religion
Categories Hindu Muslim Boudh Christian Other Total
Frequency 201 111 169 19 -- 500
Percentage (40.2%) (22.2%) (33.8%) (3.8%) -- (100)
The details of the table reveal that maximum entrepreneurs belonged to the Hindu community with a percentage of (40.2%). Most of them felt that their community was never a hindrance in thinking about entrepreneurship for economic independence this was followed by the
Boudh Community with (33.8%), the discussion also lead to the fact that the participation could have been more but many of the women in the Boudh community withdrew themselves as in certain villages the
Brahmin community threw stones and stopped them from using water etc. in District of Nasik. The percentage of Christian community being very low at (3.8%) as this community was not at majority in the population.
8.1.4. Marital Profile
Table 8.1.4. Marital Profile
Categories Single Married Widow Divorce Total
Frequency 21 376 92 11 500
Percentage (4.2%) (75.2%) (18.4%) (2.2%) (100%)
The data reveal that majority of the respondents (75.2%) were married.
Socio-cultural and religious beliefs dictate that the marriage of both sons and daughters is a sacred duty to be performed by parents but in the case of daughters especially parents feel far more pressured to marry them off as soon as possible.
8.1.5 Family Type
Table 8.1.5 Family Type
Categories Nuclear Joint Family Total Family Frequency 372 128 500
Percentage (74.4%) (25.6%) (100%)
Family is the primary group where in every member is directly associated with its activities. The type and size of the family determines the extent to which an entrepreneur can take decisions by herself and does not have to depend on others. The data in the table
8.1.5 shows that the majority of respondents belonged to nuclear families (74.4%) and only (25.6%) lives in joint families.
8.1.6. Monthly Income – Before
Table 8.1.6 (a) : Monthly Income – Before
Categories Below Rs.2000 – Rs.3000 – Rs. 5000– Total Rs.2000 Rs.3000 Rs.5000 Rs.10000
Frequency 450 25 21 4 500
Percentage(%) (90%) (5%) (4.2%) (0.8%) (100%)
Monthly Income – After business
Table – 8.1.6 (b) : Monthly Income – After business
Categories Below Rs.2000 – Rs.3000 – Rs. 5000- Total Rs.2000 Rs.3000 Rs.5000 Rs.10000
Frequency 102 156 113 129 500
Percentage(%) (20.4%) (31.2%) (22.6%) (25.8%) (100%)
Monthly Income : The monthly income of the family is an indicator of the financial support that the respondent provided to her family after she started business. As per the table 8.1.6 (a) before the start of business majority of the respondents (90%) fell in the bracket of income below rupees two thousand followed by an income bracket between two and three thousand of (5%) and very negligible of (0.8%) in the income bracket of five thousand and ten thousand. The monthly income after the business was majority in the income bracket between two thousand and three thousand of (31.2%) followed by five thousand
– ten thousand income bracket (25.8%) and the least being in the income bracket of below rupees two thousand (20.4%).
8.1.7. (a) Choice of Entrepreneurial Activity:
Table 8.1.7 (a) : Choice of Entrepreneurial Activity
Categories Service Trading Manufacturing Total
Frequency 252 192 56 500
Percentage (50.4%) (38.4%) (11.2%) 100
Respondents in the study can be classified into three major categories according to the respondent’s choice. Table 8.1.7 shows that majority of the respondents (50.4%) are involved in service based entrepreneurial activity followed by trading (38.4%) and with manufacturing (11.2%). The service related entrepreneurial activities some of them were:-
• Selling Tiffin’s
• Managing xerox
• Telephone booths
• Saree fall beading
• Beauty parlour etc.
The trading related entrepreneurial activities some of them were:-
• Kirana Shop
• Gift and snack shops.
• Vegetables/Fish/Fruit/Flower stalls.
• Aggarbathi
• Garments – Readymade.
• Plastic item shops.
The manufacturing related entrepreneurial activities some of them were:-
• Pappad making unit
• Masala unit
• Fur toys unit. • Bags unit
• Shoes unit
• Payals
• Chattai and sanitary Napkins unit
8.1.7. b) Relation between Entrepreneurial Activity and Age
Table 8.1.7 (b) : Choice of Entrepreneurial Activity
Age in Entrepreneurial Activity years Service Trading Manufacturing Total
Below 30 55 20 40 115 years
Percentage (47.82%) (17.39%) (34.78%) (100%)
Above 30 270 78 37 385 years
Percentage (70.12%) (20.25%) (9.61%) (100%)
The data as per table 8.1.7 (b) shows that the respondents who are younger below the age of 30 are willing to take more risk as compared to the people above the age of 30 as is reflected in the Respondents number who are involved in manufacturing with (34.78%) as compared to (9.61%). The case is opposite in case of service involved entrepreneurial activity where below 30 years shows a percentage of
(47.82%) as compared to (70.12%) for age above 30. This data reflects that younger people are generally more energetic, innovative, willing for change and progressive as compared to the respondents above the age of thirty.
8.1.7 (c) Relation between family type and type of
entrepreneurial activity.
Table 8.1.7 (c) Relation between family type and type of entrepreneurial activity.
Family Type Type of Activity Total
Service Trading Mfg.
Nuclear Family 188 164 20 372
Percentage (%) (50.53%) (44.08%) (5.37%) (100%)
Joint Family 14 16 98 128
Percentage (%) (10.93%) (12.5%) (76.56%) (100%)
Total 202 180 118 500
The data of table 8.1.7 (c) revealed that respondents from nuclear family were more interested in service and trading as compared to manufacturing. Similarly when the joint family was considered they were more interested in manufacturing and trading sectors as compared to service. The respondents from the joint family were more confident in dealing with challenges of manufacturing and trading sectors as they had support and help from other family members to initiate the activity. The nuclear family respondent had support from spouse but had more responsibilities and had to give more time to children as per discussion during the filling of questionnaires.
8.1.7.(d) Relation between Entrepreneurial Activity and Income
Table 8.1.7 (d) Relation between Entrepreneurial Activity and
Income
Activity Type Upto Rs.2000- Rs. 5000 Total Rs.2000 Rs.5000 – Rs.10000
Service 76 42 10 128
Percentage (%) (59.38%) (32.81%) (7.81%) (100%)
Trading 26 212 22 260
Percentage (%) (10%) (81.54%) (8.46%) (100%)
Manufacturing - 15 97 112
(13.39%) (86.60%) (100%)
Total 102 269 129 500
As per the entrepreneurial activity and income details table 8.1.7 (d) maximum number of respondents were belonging to the category of income bracket Rupees 2000 – Rs. 5,000 were involved with trading activity, the respondents who fell into the income bracket of Rs. 5,000
– Rs. 10,000 were more involved in manufacturing activity. Those who earned income upto Rs.2,000 were more involved in service activity followed by trading with nil involved in the manufacturing. Through details of table and discussion it was understood that manufacturing activity did earn the respondents a higher income but people involved had to be high risk takers.
8.1.8. Years of experience in the existing business
Table 8.1.8 : Years of experience in the existing business
Categories < 2 years 2-5 years 5 – 10 yrs >10 yrs. Total
Frequency 118 278 97 7 500
Percentage (23.6%) (55.6%) (19.4%) (1.4%) (100%)
As per the details of Table 8.1.8 most of the Respondents fell in the category of 2 to 5 years of experience or involvement in business
(55.6%) followed by Respondents with less than 2 years (23.6%) and least being people who have been involved for more than ten years
(1.4%).
8.1.9. Motives for venturing into entrepreneurship.
Do women group venture into entrepreneurship for economic reasons.
The data in table 8.1.9 identify the main motives of respondents for venturing into entrepreneurship.
Reasons for venturing into Entrepreneurship (Multiple Responses).
Table 8.1.9. Motives for venturing into entrepreneurship.
Reasons Yes % No % Total 1. To support 487 (97.4%) 13 (2.6%) family earnings 500 2. To gain social 201 (40.2%) 299 (59.8%) recognition 500 3. No job 424 (84.8%) 76 (15.2%) 500 4. Pursue Interest 206 (41.2%) 294 (58.8%) 500 5. Independence/ 118 (23.6%) 382 (76.4%) Self Confidence 500 The data revealed that (97.4%) majority of the respondents ventured into business to support the family earnings. The discussion also lead to information the reason for this was because the adult male in the households (father/ husband/ son/ father in law) were unemployed or were employed but spend their earnings on alcohol and gambling or were daily wage workers who did not earn enough to support the family. Several of the respondents were driven to entrepreneurship by the sense of responsibility and obligation towards the family. This is also evident through the percentage of no job being (84.8%). Income supplementation factor tempted women to become entrepreneurs and to establish themselves in society.
8.1.10. Interdependence Of women entrepreneurs and families.
H01 : Financial conditions of the family do not play significant
role for involvement of women in entrepreneurship.
H11 : Financial conditions of the family play significant role for
involvement of women in entrepreneurship.
It was assumed that the financial conditions of family does not play significant role for involvement of women in entrepreneurship and the dependency of the women on the family does not depend on the income level of family. The data as per table 8.1.10 – Annex. IV and the discussions, project that X 2 calculated 72.212 was much greater than the tabulated values of 3.143 at 0.05 level of significance hence the null hypothesis was rejected, proving that the respondents with income level less than Rs.5000 had the family depend on them more as compared to respondents with family income more than Rs.5000.
This also proves that the women play more important role in less income bracket and the family income does play a very important role in entrepreneurship involvement and interdependence of women and family also depends on the income level of the family. The discussions during the filling of the questionnaire also revealed that the respondents who belong to weaker financial condition of families took more initiative in starting their venture and managing their venture in terms of decision.
8.2.1. Impact of Entrepreneurship Development on the socio- economic status of respondents and their families with respect to standard of living.
One of the objectives of the study was to assess the impact of women entrepreneurship on family with respect to standard of living. This also examined the Respondents socio-economic status with a view to examine whether their economic and social status has lead to empowerment of respondents. The process of empowerment is a state of mind, an attitude of women entrepreneurs in defining, challenging and overcoming barriers, in increasing their ability to shape their lives and their environment. To assess the empowerment of women after venturing into entrepreneurship the change in economic and social status. The questionnaire was designed to collect data from respondents with regard to their followings. Income, assets, Debts, savings and consumption patterns, both before and after they had venture into entrepreneurship. After the data was collected, simple frequencies were calculated. Based on the frequencies, values were calculated for each of the components and then recorded. All positive values were recorded as 2, that is ‘increase’, all negative values as 1
“decrease” and all zero value as “no change”. Then the frequencies and percentages for the recorded values were computed to measure the change.
8.2.1. Change in Economic Status:
The indicators used for assessing the change in the economic status of the respondents were occupation, monthly debt status, change in the expenditure patterns in terms of education of children, food, household expenses and health.
8.2.1.a. Occupation:
8.2.1.a. The majority of the respondents (about 62%) were housewives and about (38%) were employed as daily wage workers before venturing into entrepreneurship. The observations are shown in Table
8.2.1.a.
Table 8.2.1.a. Occupation:
Previous Occupation F (%)
Employed (Daily wage 190 (38%) worker)
Housewife 310 (62%)
Total 500 (100%)
It was reported by the respondents that MAVIM – Mahila Artik Vikas
Mahamangal and various other financial organizations had provided micro finance help, thereby economically empowering the respondents to start their business. The respondents were further supported by the organizations through training for developing their entrepreneurial skills, facilitating the process of credit availability information and guidance, counseling and follow up. A majority of the entrepreneurs went for micro enterprises as they were more attractive to respondents because of low barriers to entry and flexible nature of work, which made it easy to combine gainful employment with domestic responsibilities.
8.2.1.b. Monthly Income
Income measures the financial stability of a family. It also reveals the purchasing power of the family to take care of basic household expenses, education of children and the like. It was found that the monthly income of the respondents had changed after they started their business.
Table 8.2.1. (b)
Impact of Entrepreneurship on Income
Change in income No. of Percentage (%) Respondents
Increase 408 81.6%
Decrease 64 12.8%
No change 28 5.6%
Total 500 100% The data in the table 8.2.1 (b) reveals that (82%) of the respondents reported an increase in the monthly income, around (13%) reported decrease and (6%) reported no change in income. The quantum change in income was also calculated on Table 8.2.1. (c).
Table 8.2.1. (c) : Change in the Monthly Income of Respondents
Monthly Income Change in Income % change level increase/ Decrease Before After
Upto 2000 93.6% 6.4% - 87%
Rs. 2001 – Rs.3000 69.6% 30.4% -39.0%
Rs. 3001 – Rs.5000 8.6% 48.8% + 40.0%
Rs. 5000 & above 0.8% 13.6% + 12.8%
The data show that majority of the respondents (about 94%) had a monthly income upto Rs. 2000, followed by (70%) who had an income between Rs.2001 to Rs.3000, (9%) had an income between Rs. 3001 to Rs.5000 and a very negligible percentage earned (0.8%) Rs. 5000 and above before they started the business activity.
The data further indicated that starting business had made an impact on the financial situation with the percentage of respondents who were earning between Rs. 2001 – Rs. 3000 decreasing by (39%) and a corresponding increase in the percentage of the respondents earning between Rs. 3001 – Rs. 5000 by (40%) and (13%) of the respondents also moved into the higher earning category of Rs. 5000 and above.
This improvement in the financial condition empowered the respondents to take decisions independently or jointly regarding the expenditure pattern of the household food, children education. They also gained freedom to a greater extent to do “what they wanted to do”.
The financial independence also helped the respondents to raise their standards of living. The data when further analysed revealed significant ‘p’ value (Table 8.2.1. (d). indicating that venturing into entrepreneurship had a positive influence on the monthly income.
Paired t-Test
Paired Differences 95% Confidence Interval of the Difference Std. Std. Error Sig. (2-
Mean Deviation Mean Lower Upper t df tailed) Pair 1 VAR00001 - - - 3574.1635 VAR00002 159.84145 -6142.04520 5513.954 -36.461 499 .000 5.82800 8 80
8.2.2. Change in the Decision making ability and Enterprise
Development.
Entrepreneurs have to make decisions and this decision making capacity comes from years of experience of being exposed to making necessary decision, in situations both at work and home. The data in the table 8.2.2. shows the type of decision makers who took decisions regarding the spending patterns before and after respondents started their business activities.
Table 8.2.2. Type of decision maker and decision on spending.
Type of Decision Decision on spending Change Maker Increase/ Before After Decrease
Spouse 385 (77%) 102 (20.4%) - 56.6%
Self 50 (10%) 317 (63.4%) + 53.4%
Joint 55 (11%) 72 (14.4%) + 3.4%
Family members 10 (2%) 9 (1.8%) Negligible change
The data in the table reveal that most of the decisions were made by the spouses (77%) before the respondents started the business which was reduced to (20.4%) which decreased by (56.6%). The most important part in the transition from spouse to self, where the self decisions were (10%) which increased to (63.4%).The involvement of the respondent and her spouse also increased from (11%) to (14.4%) an increase by (3.4%). This implies that on becoming entrepreneurs they were exposed to making necessary decisions in increasingly complex situations which enhanced their self-confidence to take independent decisions. The data revealed that with monetary returns from business the respondents experienced a change in decision making.
8.2.3. Asset Formation: The value of assets possessed by a family is an important indicator of a secure condition of the family. The assets in the present study have been categorized in terms of fixed assets like house, jewellery, other household gadgets and savings. It was found that in case of (66%) of respondents, assets (in terms of value) had increased while (32%) there was no substantial change and very negligible percent decrease (1.6%).
Table 8.2.3: Impact of entrepreneurship development on
Asset Formation
Change in Asset No. of Percentage Respondents
Increase 330 (66%)
Decrease 10 (1.6%)
No change 160 (32%)
Total 500 100%
The Respondents reported that they invested in buying jewellery for their daughters, in household gadgets like mixer grinder refrigerators and gas stoves. They further shared that they had started saving and had bank account in their name. They did not only spend for themselves but a lot for their family. All these indicated a positive impact on the lives of the family of the Respondents.
8.2.4. Debt Status: It was seen that another parameter to measure the standard of living is the debt status of the family. The amount which the family could repay, has there been change in the debt status.
Table 8.2.4. : Debt Status
Change in Debt No. of Respondents Percentage Status
Increase 65 13%
Decrease 420 84%
No change 15 3%
Total 500 100%
The data as per table 8.2.4 the debt status as it was found was that it decreased by (84%), (13%) respondents stated that it increased and
(3%) stated that there was no change. The increase respondents mentioned that the debt has increased as there was certain cases with spouses meeting with accident or daughters delivery etc. The respondents during the discussion also mentioned that some of the respondents with the entrepreneurial activity profit did not go in for debt payment but reinvested in business. The entrepreneurial activity did change the debt status for the respondent and their families which shows a positive impact.
8.2.5. Change in Social Status:
To assess the impact on the social status the following indicators were used control over earnings with regard to priority areas of spending and change in lifestyle with increase in the power of earning.
8.2.5.1. Individuals Control Over Earnings: As per discussions the respondents revealed that there was a drastic change in the status of control over earning after they entering the entrepreneurial activity. The table below 8.2.5.1. gives the details of the respondents responses.
Table 8.2.5.1. : Individuals Control Over Earnings
Categories Control of Earnings
Yes No
Frequency 390 110
Percentage (78%) (22%)
The data on control over earning revealed that majority of the respondents (78%) had control over the earnings from the business with certain priority areas for expenditure. During the discussion with the respondents they also mentioned the priority areas of spending of respondents related to household expenses, where education of children by being able to buy milk, fruits, egg, chicken on regular basis and their own health. Based on different areas of spending the respondents responded (97%) spend part of their earnings like buying monthly ration and clearing previous debts, (52%) spend on the education of their children and (21%) responded on meat, fish, and milk regularly for their children. The least priority was their own health.
8.2.5.2. Change in Life Style:
The change in lifestyle was defined as the change in the purchasing power of the respondents ability to purchase goods and services for their families. It was observed as per the data collected that (71%) of the respondents reported that there was changes in their lifestyle. The data further revealed that around (72%) of the respondents had purchased goods for house like gas stove, refrigerator, mixer, grinder, television etc. About (37%) of them started savings in co-operative banks and Bank of India, State Bank of India etc. and (24%) disclosed that they were now able to buy clothes during the festival seasons like
Ganesh Chaturthi, Navaratri and Dipawali. Thus the respondents felt more responsible towards their families and were able and determined to improve their financial situation and facilities at home.
8.3. Impact of Women Entrepreneurship Development on Family
with respect to Standard of Living :
The hypothesis for the study tested :-
H02 : Involvement of women in entrepreneurship does not play
significant role in standard of living of family.
H12 : Involvement of women in entrepreneurship does not play
significant role in standard of living of family.
The impact of women Entrepreneurship was further analysed with the number of years of involvement of the respondents in business. The analysis was done through discriminant analysis. Based on time duration, two groups were formed one group who were involved in business for less than 2 years and the other group for more than 2 years. F test was used for checking the significance of variation in standard deviation.
The study of 500 respondents was undertaken to determine the correlates of the standard of living of the family on the following characteristics. The predictor variables are consumption of food, house assets, status of house, children’s education, health issues, savings created ,literacy rate, social status, livelihood assets, psychological benefit. The dependant variable was the respondent’s involved in entrepreneurship, involvement for less than two years and more than two years of which two groups were identified.
Respondents who reported their involvement in entrepreneurship less than 2 years classified as group 1 and those with more than 2 years are classified as group 2.
The findings emerged as in Table (8.3. – Annex. IV) as consumption of food, house assets, savings created, lively hood assets which were the most effective variables in discriminating among group 2 as compared to Group 1.
The results obtained by examining the group means and standard deviations, it appears that the two groups were more widely separated in terms of consumption of food, house assets, savings created, lively hood assets than other variables.
Discriminant Analysis:
In testing for significance in the study noted that the Wilks Lamda value associated with the function is .439 which transforms to chi – square of
405.947 with 11 degrees of freedom. This is significance beyond the
0.05 level. (Table 8.3 – Annex. IV). The significance of the unvariable F
Ratio indicates that when the predicators are considered individually consumption of food, house assets, savings created, livelihood assets significantly differentiates who belong from group 2. The Eigen value associated with function is 1.280 a (As per Table 8.3 – Annex. IV) and the canonical correlation associated with function is 0.749. Hence the null hypothesis is rejected. Also with discussions with the respondents and previous data analysed, most of the respondents within a short span of time brought about drastic change in their ownership as well as in the standard of living of the family. Kaccha to Paccka house, consumption of nutritional food, and increase in assets such as cupboard, television, gas stove, fan, jewellery, livelihood assets etc.
Thus the null hypothesis being rejected, it was evident that involvement of women in entrepreneurship does play a significant role in standard of living of family.
8.4. Key Drives for involvement of women in entrepreneurship:
The hypothesis for the study tested :
H03 : Women’s involvement in entrepreneurship process does
not happen due to monetary benefits.
H13 : Women’s involvement in entrepreneurship process
happens due to monetary benefits.
This was analysed through factor analysis. The variables for factor analysis were framed based on previous studies and experience with respondents during pilot study. Following were the pre-assumed key drivers, acquired skills, availability of funds, passion, hobby, family business, need, jobless husband, money, improvement, in standard of living, resources available. Respondent’s response was taken based on 7 points Likerts scale.
The analytical process is based on a correlation between the variables.
Factor Analysis : The correlation matrix, constructed from the SPSS data sheet obtained to understand financial condition of the family are influencer for women involvement in entrepreneurship. There is relatively high correlation among money, need, jobless husband and improvement in std of living. We would expect these variables to correlate with the same set of factors. Likewise, there are relative high correlation among passion, hobby and acquired skills these variables may also be expected to correlate with the same factors The null hypothesis, that the population correlation matrix is an identity matrix, is rejected by Bartlett’s test of sphericity. It can be seen that the communality for each variables v1,v2 … vn as unities. The table labeled
‘Initial Eigenvalue’ shows the eigenvalues in decreasing order of magnitude as we go from factor 1 to end the eigenvalue for factor indicates that total variance attributed to that factor.
The Scree Plot and Total Variance clearly explains the distinguishing
10 components in 2 factors which includes 66.687 percent variance.
(As per Table 8.4 (d) – Annex. IV) The co-relation matrix (As per Table
8.4 (b) – Annex. IV) and component plot in rotate matrix (As per Table
8.4. (e) – Annex. IV) identifies 2 clusters, one included factors which were economically significant and the other included the interest factors. These clusters were then defined as segment of economical benefit and interest. Thus the null hypothesis was rejected. The findings as per the analysis and discussion brings to the fact the respondents enter into entrepreneurship for monetary benefits or to stabilize the family financially. In due course of time with monetary benefits coming the respondents would take initiative to improve the condition of her family, raising the standard of living by creating savings, increasing the consumption of nutritional food, giving good education to the respondents children. The other important driver would be of interest such as hobby, passion, acquired skill versus passion is .775, family versus acquired skill is .421, Hobby versus availability of funds is .821, Need versus resources available is .929.
(As per Table 8.4. (b) – Annex. – IV).
Graph 8.4. (2) Component Plot
Financial status of family of status Financial
Interest
Variables at the end of an axis are those that have high loadings on only that factor and hence describe the factor. Variables near the origin have small loadings on both the factors. Variables that is not near any of the axes are related to both the factors.
The component interest is highly related with variables hobby, passion and acquired skill. Thus, factor 1 may be labeled as interest of the individual. A plot of the factor loading confirms these interpretations. Variables money, need, improvement in std of living and jobless husband are at the ends of horizontal axes.
8.4.(B) In order to further cross check as to which holds more importance among both the clusters further, a hypothesis framed was anlaysed.
H04 : Women’s involvement in entrepreneurship process are
independent of the interest and financial condition.
H13 : Women’s involvement in entrepreneurship process are
dependent of the interest and financial conditions.
Women’s involvement in entrepreneurship are independent of their interest and financial conditions of the family. This was tested by the
Logit Model. Based on the survey of the respondents and interaction with experts five parameters were considered for study they were acquired skills based training, financial benefit, low family income, social benefit, interest in respective business. The respondents were asked to score the five parameters on Likert scale. As per the data collected and analysed.
Logistic regression or logit model: 350 respondent are the analyis sample,
175 of whom are in entrepreneurship due to self interest labeled as group 1 and 175 of whom are due to economical need labeled as group 2 , we measure their interest and economical need on the seven point Likerts scale.
Following are the parameter for study
1. Acquired skill based training programme.
2. Financial benefit.
3. Low family income.
4. Social benefit.
5. Interest in the respective business. The objective is to estimate the probability of respondent being economically poor as a function.
The Cox and Snell R square(.015) and Nagelkerke R square measures(.020)
(as per Table 8.4. (b) – 1 (Annex. IV) the significance is based on Walds
Statistics for Financial benefit and low income which are respectively
4.558 and 3.109, significance value is .033 and .078 respectively. (As per Table 8.4. (b) – 3 (Annex. IV). On this basis, it can be concluded that both financial benefit and low family income play a significant role which represents economical need. Thus the positive sign for co- efficient indicate that the economical need are more significant. It can be derived that financial benefit is the key driver over interest for women involving themselves in women entrepreneurship.
8.5. Importance of Socio-Psychological Characteristics, Managerial Ability and Support System.
While some may consider entrepreneurship to simply be a form of management, the essence of entrepreneurship in fact is the initiation of change. It is the act of starting a business, either at the micro or at the macro level. Essentially the entrepreneur seeks an opportunity to fulfill a personal need or meet a personal want or a need in the market place. The need in the market place is a rare case as for micro enterprise. In the need to achieve the above, he or she brings together all the expertise such as materials, labour, capital, self confidence etc.
To be independent and entrepreneurial involves combining personal characteristics, financial means, resources within an environment, demographic factors and also the type of venture an individual chooses.
One of the most important aspects for independence is identify the characteristics for being independent.
Table 8.5. Identified Characteristics :
Characteristics Details
Self Confidence Confidence, Independence Individuality, Optimism. Task result oriented Need for achievement, Profit oriented, Hard work, Initiative. Risk Taker Likes Challenges. Originality Innovative, Creative Resourceful, Flexible, Versatile. Future Oriented.
Source: Meredith et al, 1982, The Practice of Entrepreneurship.
All the traits are inter related, that is people who are self-confident will probably accept responsibility for their own decision and be willing to take risks and become leaders. They would also identify with their environment. Meredith et al 1982, the Practice of Entrepreneurship also mentioned that the demographic factors also play important role to identify with these characteristics and become independent.
In order to identify with the above and to create the independency model the below aspects were put across to the respondents to know their response.
8.5.1. Independence : In the study independence was related to decision making, self confidence of the respondents or do they consult their dear ones for decision making.
Table 8.5.1.
Independence item Responses
Yes No
Self confidence 492 (98.4%) 8 (1.6%)
Own Decisions 404 (80.8%) 96 (19.2%)
Takes independent 408 (81.6%) 92 (18.4%) decisions
Consult family & friends 340 (68.0%) 160 (32.0%)
As per the Table 8.5.1. around (98.4%) respondents were confident and (1.6%) respondents were not confident. Similarly (80.8%) respondent took their own decision though around (68%) do consult their family and friends before taking their own decision whereas
(19.2%) mentioned that they do not take their own decision, besides
(81.6%) mentioned that they take their independent decisions whereas
(18.4%) said they do not take independent decisions. (68%) respondents felt it essential to consult family and friends so that in future they could expect their support but their decision would always be theirs while (32%) felt they did not consult their family and friend but were independent. From the data analysed it is seen that most of the respondents were self confident.
8.5.2. Leadership:
The person who is a risk taker, self confident and willing to take the responsibility of one self and the entire team is a leader. Entrepreneurs need to be leaders as they have to identify and accept every success and failures of theirs. In order to analyse this, the data were collected and analysed for leadership. It is also essential that the leader needs to support others in business, besides have variation in thinking with the business issues and also have the will to tackle competition, but by being there in the competition.
Table 8.5.2. Leadership
Leadership items Responses
Yes No
Support to others in 396 (79.2%) 104 (20.8%) business
Mobility in dealing with 376 (75.2%) 124 (24.8%) business issues
Tackling competition 256 (51.2%) 244 (48.8%)
As per the table 8.5.2 the respondents (79.2%) agreed that they do support others in business, as they do this they also find a lot of learning for themselves besides the entire community looks up to one while (20.8%) disagreed and mentioned that they did not support others as they did not find time and comfort to support others in business. (75.2%) respondents agreed to have mobility in dealing with the issues of business while (24.8%) they did not have mobility in dealing with business issues. (51.2%) agreed that they can tackle competition and (48.8%) of the respondents mentioned they could not tackle competition and sometimes also could not accept the fact someone else is far better than them in the same business. As per the data in the table most of them agreed that they did possess leadership quality.
8.5.3. Decision Making:
In entrepreneurship it is very essential to have a quality where one brings in solution to the obstacles and take responsibility for their decision. This was analysed by taking the respondents response to the decision making ability in them.
Table 8.5.3.: Decision Making
Independence item Responses
Yes No
Deal with problems 492 (98.4%) 8 (1.6%)
Innovative solutions 356 (71.2%) 144 (28.8%)
Family follows views 448 (89.6) 52 (10.4%)
As per most of the respondents (98.4%) felt that they could deal with problems only (1.6%) felt that they could not deal with problems.
(71.2%) felt they could being in innovative solutions and (28.8%) felt they could not bring innovative solutions (89.6%) responded that their families also agreed to their decisions and followed their decisions.
8.5.4. Risk Taking Ability: As entrepreneurial venture requires a lot of risk taking ability with respect to monetary decisions, moving through unfamiliar routes and take risk in solving problems. Only if one had the ability to taking risk then only could they think of economic independence.
Table 8.5.4. Risk Taking Ability
Risk Taking items Responses
Yes No
Money 420 (84%) 80 (16%)
Willing to travel through 320 (64%) 180 (36%) unfamiliar routes
To face problems 440 (88%) 60 (12%)
As per the data analysed it seen that most of the respondents are willing to take risk with respect to money (84%) said they were willing to take risk while (16%) believe that they would not be able to take risk in terms of money while (64%) are willing to travel through unfamiliar routes i.e. to trace new markets and opportunities. (88%) respondents also agreed that they were willing to face problems with respect to setting up the venture such as from the Panchayat, bank, family, community.
8.5.5. Future Planning:
One of the most essential aspect for an entrepreneur is planning for the future so that one becomes sure that the business would sustain and they need not depend on any one economically when future planning is concerned it talks about growth opportunities, type of venture chosen and long term goals.
Table 8.5.5. : Future Planning
Future Planning Responses
Yes No
Growth Opportunities 208 (41.6%) 292 (58.4%)
Type of Venture Chosen 384 (76.8%) 116 (23.2%)
Long term goals 32 (6.4%) 468 (93.6%)
Most of the respondents (58.4%) responded that they did not plan for their growth opportunities or expansion of business at the initial stage while (41.6%) responded that they did think of the growth opportunities around (76.8%) mentioned that they did think about the type of venture to be chosen, whether it is traditional or non-traditional (93.6%) of the respondents mentioned that they did not plan for their future with respect to business while (6.4%) mentioned that they had long term goals planned for themselves. During the discussion the respondents also mentioned that growth opportunities and long term goals were aspects which they considered to be thought about only after a certain stage where as the type of venture had to be thought about before starting the business. 8.5.6. Taking Initiative :
In order to be entrepreneurial in nature it is also essential to take initiatives for borrowing finance, purchase of raw material, marketing the products etc. unless they do not explore these areas they would not be bale to take risk and go ahead with decisions on the business aspect.
Finance : a) Initiative of Borrowing Finance:
Table 8.5.6 (a) : Initiative of Borrowing Finance
Initiative of Borrowing Responses
Yes No
Self 218 (43.6%) 282 (56.4%)
Self and Spouse 204 (40.8%) 296 (59.2%)
Self and Friends/Family 72 (14.4%) 428 (85.6%)
Self and SHG member 397 (79.4%) 103 (20.6%)
The data as per table 8.5.6 (a) most of the respondents (79.4%) of them go along with self help group member for the initial application of loan, (43.6%) respondents go all by themselves, (40.8%) respondents choose to go along with their spouse, while only (14.4%) prefer to go with family/ friends. During the discussion which happened during the filling of questionnaire, it was also mentioned by the respondents that only for the initial one or two times, they needed somebody, later they did the follow up by themselves.
(b) Experience of Borrowing Finance :
This discusses whether the respondents had to undergo a trouble or obstacles to receive finances. It also discusses as to whether their experience was favourable or not favourable.
Table 8.5.6 (b) : From Bank, NGOs and other Financial Institutions
Categories Favourable Unfavourable Total
Frequency 323 177 500
Percentage (64.6%) (35.4%) (100%)
As per the data of table 8.5.6 (b) most of the respondents (64.6%) responded their borrowing experience was favourable and (35.4%) their experience was not good from the bank. The discussions brought to light certain bank managers did not believe in the ability of the respondents to do business and repay back. This was specially discussed in the regions of Gadchiroli and Bhandara.
(c) Purchase of Raw Material: One of the most important aspect of being involved in entrepreneurship is the ability to identify with the geographical raw material available, availability of raw material to do business and also the willingness to take decision to purchase.
Purchase Decision of raw materials which was discussed in initiative of starting business.
Table 8.5.6. (c) : Purchase of Raw Material
Initiative of Purchase of Raw Responses Material
Yes No
Self 112 (22.4%) 388 (77.6%)
Self and Spouse 278 (55.6%) 222 (44.4%)
Self and Family/Friends 125 (25%) 375 (75%)
Self and SHG member 298 (59.6%) 202 (40.4%)
The data in the table 8.5.6 projects that majority of the respondents
(59.6%) go along with the self help group members to purchase the raw material followed by the combination of self and spouse (55.6%).
During discussion it was mentioned by the respondents that if the products were for a kirana shop they preferred their husbands and it was ready made garments like saree, petticoat they preferred their
SHG members.
(d) Marketing:
Entrepreneur have a constant need for information on the market. The purpose of marketing is to satisfy the demand of customers (Meredith et al 1982). No matter how good one might be in all aspects of operating a business one can not be successful unless one can sell the products, since business success is ultimately determined by customer demand. Hence it was essential to analyse whether the respondents venture out for marketing.
Table 8.5.6. (d) – Marketing Initiative
Initiative for Marketing Responses
Yes No
Self 301 (60.2%) 199 (39.8%)
Self and Spouse 274 (54.8%) 226 (45.2%)
Self and Family/Friends 116 (23.2%) 384 (76.8%)
Self and SHG Members 154 (30.8% 346 (69.2%)
The data in the table 8.5.6 (d) projects that majority of the respondents did their marketing initiative by themselves (60.2%) but it is also interesting to see that most of the respondents also seeked the help of their husbands (54.8%) which was also discussed during the filling of questionnaire that the trust factor is more with respect to husband and it also becomes a job for the husband who is jobless. It was also mentioned that the final decision was made by the respondent with respect to price and location.
8.5.7 . Support System:
The support system includes the help received by the respondent from the family and community with respect to morale, physical, monetary and knowledge.
(a) Support from Family:
Table 8.5.7. (a) : Support from Family
Support items Responses
Yes No
Monetary 206 (41.2%) 294 (58.8%)
Physical (Land)/Space 223 (44.6%) 277 (55.4%)
Knowledge 97 (19.4%) 403 (80.6%)
Morale 435 (87%) 65 (13%)
The data as per the table 8.5.7 (a) most of the respondents (87%) receive morale support from their family in the form of taking care of children, taking the initiative of handling a customer, looking out for markets which the respondents felt was of greater help to go ahead to do the business.
b) Support from community
Table 8.5.7 (b): Support from community
Support items Responses
Yes No
Monetary 20 (4%) 480 (9.6%)
Physical (Land/Space) 326 (65.2%) 174 (34.8)
Knowledge 51 (10.2%) 449 (89.8%)
Morale 476 (95.2%) 24 (4.8%)
The table 8.5.7 (b) data projects that most of the respondents (5.2%) received morale support from community. (65.2%) respondents also mentioned they received space or physical help from the panchayat.
During the discussion the respondents also mentioned that in some villages the sarpanch himself or herself promoted entrepreneurship so that the women in community become independent and empowered.
8.6. Economic Independency Model
Based on the respondents feedback and literature review certain parameters were considered in order to understand their importance for the independency model. The parameters were :
1. Demographic Factor.
2. Type of venture
3. Traits
4. External Support system
5. Internal Support System.
The study to create the model was done to understand the weightage which needs to be given to each parameter in order to understand if the respondents would become independent. This would also give insight to different organizations working towards women entrepreneurship development as to though according to literature review all the four parameters form pillars of women entrepreneurship development all four aspects cannot be focused simultaneously in order to achieve success.
Identification of key success factors for Women Entrepreneur
Development – Independency Model.
The analysis of the study indicate that the key factors for success of a women entrepreneur are following. Each of these factors have several sub factors. They are as follows:-
1. Rate the following statement in 7 point Likert scale.
Table 8.6.1. Demographic Factors
Factors Mean for Factor
F1 Age 4.5
F2 Education 5.5
F3 Religion 3.4
F4 Social Category 4.1
F5 Marital Status 3.9
F6 Family 5.2
F7 Location 4.8
8.6.2. Type of Venture
Rate the following in 7 point Likert Scale.
Type of Venture
Table 8.6.2. Type of Venture
F Factors Mean for Factor F1 Identify right opportunities 4.23 F2 Willingness to move through 4.25 unchartered water F3 Essential to be innovative to be 5.56 successful. F4 Not essential to be innovator to be 4.75 successful F5 Convince counts to choose venture 3.50 F6 Market Availability is important for 5.50 venture F7 Skills not essential to choose venture 5.00 F8 Essential not to be risk taker in 3.21 choosing venture
8.6.3. Traits
Table 8.6.3. Traits
F Traits Mean for Factor F1 Self Confident and Multi skilled 4.24 F2 Confident for Decision Making 5.45 F3 Risk Taker 5.00 F4 Innovative 4.56 F5 Result Oriented 4.78 F6 Managerial Ability 4.04
8.6.4. External Input System
F General Input Items Mean for Factor
F1 Support of Bank 5
F2 Availability of Fund 4.21
F3 Government Support 3.49
F4 Involvement in SHG 4.56
F5 Resource of Raw Material 3.45
F6 Input & Support of Society 4.45
8.6.5. Internal Input System - Family
F Internal Input Item Mean for Factor
F1 Monetary 5.00
F2 Physical (Land)/Space 3.56
F3 Knowledge 3.21
F4 Morale 5.00
F5 Involvement of entire family 4.00
F6 Involvement in Decision making 4.21
The study indicated that these major factors play an important role but in varying degrees towards the development and success of women entrepreneurship development. This degree of success can be measured by formula.
V = Σ r Fi N
Where r = coefficient of correlation
F1 = Mean of individual sub factors n = Total number of sub factors
V = Value of importance for that factor
Based on this study it was found that value of importance for the factors is as follows:-
Demographic factors = 2.51
Type of Venture = 3.06
Risk taking ability and other traits = 3.65
Internal Support = 2.82
External Support = 2.30
Thus from the above, it is clear that government and non government organizations like Mahila Artik Vikas Mahamandal need to identify factors which are critical for the success of entrepreneurship development among women. Thus according to the independency model, the most critical factor for the success is.
1. Traits: Is the entrepreneur capable of taking risk which is high in value
of (3.65).
2. The type of venture: Is the entrepreneur able to identify with the
opportunity and decide whether traditional or non-traditional business
format would work, the value is (3.06).
3. Closely followed by Internal Support System of family (2.80).
Demographic factors and external support are important but not so critical at the initial stages. The value for demographic factor being (2.51) and the external support system being (2.30).
It is essential to understand these values as most of the organizations invest huge amount in entrepreneurship development among women but the most common mistake among them is focusing all aspects simultaneously but the independency model clearly gives indications for the organizations to function in the form of conceptual diagram (Fig. 8.6.2), stage wise approach so that there is realization among the women also about themselves and the changes. To give importance for the investment by the organization it is very essential to create this realization among the respondent groups.
8.7. Summary of Findings
The salient findings of the study can be stated as follows:-
1. Profile of the Respondents :
In the case of women run business, entrepreneurial and socio-demographic profile of the entrepreneurs is considered necessary as only meaningful conclusion drawn from them can be further used for entrepreneurship development which would bring a drastic impact on the individual, family and community at large i. Age : Major number of respondents belong to the age group 31-40
years which consists 58.8%. ii. Education: Most of the respondents have education upto class 8, which
was sufficient to understand how to seek loan and how to go about with
the business. iii. Religion: The maximum respondents belonged to the Hindu
Community 40.2% followed by Boudh Community 33.8%. iv. Marital Profile : Maximum respondent got involved in entrepreneurship
process after marriage as they felt that after marriage they were able to
cope with pressure better with the morale support of their spouse
though not much of economical support was attained from the families
end. v. Entrepreneurial Activity: Most of the respondents were involved in
service activity i.e. 50.4% followed by trading 38.4%.
2. Interdependence of Women Entrepreneur and Family: i. The monthly income of the family is an indicator of the financial support
that is there for the women entrepreneur. It was assumed during the
study that the financial conditions of the family do not play significant
role for involvement of women in entrepreneurship. ii. It was analysed that major women entrepreneurs had weak financial
background during her entry into the entrepreneurial activity. But her
involvement occurred in order to raise the income of the family. It was
seen that after the women entered the business, she provided financial
support to the monthly income of the family. During the analysis, it was
seen that before the respondents ventured into business 90% of the
respondents had an income below Rs. 2000 which changed drastically
with decrease upto 39% and the number of respondents increasing in
the income bracket of Rs.3000 – Rs.5000 and Rs.5,000 and above
also. iii. Most of the women entrepreneurs had husbands who were either
unemployed or were employed on contractual or daily wages. It was
assumed that the family would be dependent on the respondents but
through the analysis, it was found that respondents with family income
level less than Rs. 5000 had the family depend on the respondents as
compared to respondents with family income more than Rs. 5000. In
both the cases, the respondents income is merged with the income of
the family and considered as income. The less than Rs.5000 bracket
income respondents have their way as far as all the decisions are
concerned where as the respondents with income bracket of more than
Rs.5000 depend on their family. iv. The women entrepreneurs whose financial condition were weak and
families where the husband is a drunkard or there is no other earning
member the family is dependent on the women entrepreneur. Aspects
such as decision making inhouse or for business was majorly done by
the women entrepreneur. Most of the respondents in such a situation
have income level less than Rs. 5000. v. It was also analysed that the respondents felt that family is the primary
group where in every member gets directly associated with the
activities. The family type and size of the family determines the extent
to which an entrepreneur can take decision by herself and does not
have to depend on others. vi. Women entrepreneurs from nuclear families did not have help available
at home and they single handedly had to take care of all the housework and children. Thus they did not have much time to spend running
around for financial support and so found it difficult to access loans
single handedly. The lengthy procedure for getting credit, no support
available at home and no motivation from credit institutions de-
motivated the respondents from nuclear families to access credit from
banks and other financial institutions. The case in terms of joint family
was there was lot of support system existing for the women
entrepreneur to do follow up for availing credit from financial institution
even if she was engaged in family activities.
3. Impact of women entrepreneurship with respect to standard of living of family.
As per the analysis the predictor variables are consumption of food, house assets, status of house, children education, health issues, savings, literacy rate, social status, livelihood assets, psychological benefit. The two groups identified for study was respondents involvement in entrepreneurship for less than two years and respondents involvement for more than two years. The respondents were categorized as group 1 and group 2. It appeared that the two groups were more widely separated in terms of consumption of food, house assets, savings created and livelihood assets than other variables. The f test was used for checking the significance of variation in standard deviation.
As the f test value increases, the significance level decreases so the hypothesis is rejected. i. The women entrepreneurs when enter into entrepreneurship have
kachha house. House made of mud with a low entry and just with one
room, no electricity and no demarcating space for cooking with cow dung floors. The respondents who have been in the entrepreneurship
process for more than two years have brought remarkable change in
the type of house. Most of the respondents who had their venture for 2
years, had pucca house made of cement. They had drawn electricity
line and few of them even had brought in tap connections. One thing
very peculiar observed was some of them build a totally new house
and kept the old house as a monument to keep marketing their journey
and show the children and family the beginning. ii. Consumption of Food : The other variable which was studied showed
that major lot of families who had only one income earner (i.e. women
not being involved as income earner) had basic diet as Dal, roti/
chappati/ bhakti and one sabji (may or may not be). Through
discussions and analysis, the findings revealed that when the women
enter into entrepreneurship the consumption pattern of the house also
changes. The women who have been earning money over two years
responded that they do consume fish, egg and chicken atleast once in
a week. Some of them also responded that they did bring chicken twice
a week. In regions of Konkan it was responded that they would bring
costly fish such as silver pomfert and black pomfret for the family
especially for the children. This also reflects the nutrition level for the
family such as intake of protein, calcium, magnesium etc. Healthy
living is brought through the process of women becoming income
earners through entrepreneurship.
iii.. House assets: As the respondents during the interview responded that
many of them who have been involved in entrepreneurship process for over two years have brought cupboard, gas, table fan, cooker and
other utensils, bed, some have even gone to the extend of purchasing
computer for their children. The most purchased item for group 1 and
group 2 was jewellery, fan,g as. In case of women who have been in
the business less than two years are happy that they could atleast
purchase jewellery and have a shift from chulla to gas. Women
involved over two years have also build bathrooms. iv. Savings : the women who have involved in entrepreneurship for less
than two years have their SHG savings and house assets more. Most
of them rather than focusing on savings of self have been focusing on
sustaining their business by rolling their earnings back into the
business. The people who have involved themselves in the
entrepreneurship have generated self savings through savings account
in bank on their name or children name. Most of them have also
invested money in post office savings and taken LIC policy. But it has
also been found that those who have focused only on expansion of
business and where the husbands involvement in business and
decision making is totally controlled by husband the savings on the
women’s name is least. In areas such as Gadchiroli they do not believe
in savings but living life each other. v. Livelihood Assets: It was observed and analysed that most of the
women did have an attachment towards purchase of livelihood assets
such as goat, sheep, cow, pig etc. The only difference is in the
responses attained from different geographical regions. In regions such
as Gadchiroli people invested more in pig where as regions such as Konkan belt invested in cow and Nasik and Ahmednagar invested in
goat and sheep. Those who have responded and have been there in
business over two years mentioned that they had began with one goat
and today have fifteen to twenty goats. Thos who have just recently
entered have only one goat or nil livelihood assets.
4. Key drives for involvement of women in entrepreneurship: i. The hypothesis women’s involvement in entrepreneurship process
does not happen for monetary benefits but there are other important
factors. This was analyzed through factor analysis. Factor analysis was
used for identifying the key drivers, which we framed based on
previous studies and the experience with respondents during pilot
study. Following were the pre-assumed key drivers acquired skills,
availability of funds, possession of hobby, family business, need,
jobless husband, money, improvement in standard of living, resources
available. Respondents response were taken into consideration and
were analysed. based on. The responses were analysed using
principle component analysis. Scree plot and total variance explained
clearly the distinguishing 10 components in 2 factors.. After evaluating
the co-relation matrix and component, plot in rotate matrix 2 clusters
were identified. One included the factors which were economically
significant and the other included the interest factors. These cluster
were then defined as segment of economical benefit and interest. Thus
the null hypothesis was rejected. The finding of the analysis is the key
drivers for women involvement in entrepreneurship happens for money,
the need for her to pull the family or stabilize the family financially. In due course of time with monetary benefits coming she would like to
improve the condition of her family, such as standard of living by
creating savings, increasing the consumption of food, giving good
education to her children. Certain general aspects for her involvement
would be existing family business. The other important drivers would
be of interest such as hobby, passion, and acquired skills. ii. In order to further cross check as to which holds more importance
among both the clusters further, a hypothesis framed was checked,
women’s involvement in entrepreneurship are independent of their
interest and financial conditions of the family. This was tested by the
Logit Model. Based on the survey of the respondents and interaction
with experts five parameters were considered for study they were
acquired skill based training, financial benefit, low family income, social
benefit, interest in the respective business. On this basis it can be
concluded that both financial benefit and low family income play a
significant role which represents economical need. Thus the positive
sign for co-efficient indicate that the economical need are more
significant. Thus one can conclude that economical benefit/ financial
benefit is the key drivers over interest for women involving themselves
5. Key parameters for success of the women in entrepreneurship development.
Based on the above findings the study indicates that for a woman entrepreneur to be successful there are 7 steps. These 7 steps can be schematically drawn as follows:- Stage 1 Age Capability for Education Becoming Experience Entrepreneur
Stage 1
Trait No Identif. Stage 2
Yes
Type of Venture Stage 3
Yes
Internal No Stage - 4 Support
Yes
Stage-5 External No Support
Yes
State-6 Improvement Not Entering of family Entrepreneurship
Yes
Stage-7 Improvement of No Improvement society
Fig. 8.1 : Entrepreneurship Development in Village.
The study indicates that :-
1. Age/Education/Experience
2. Trait identification
3. Type of Venture
4. Internal Support
5. External support
6. Improvement of family.
7. Improvement of society.
Which are the major parameters which have a high impact on the success of a women entrepreneur. Identifying with the model and the analysis indicates that 5 parameters are critical and have a high impact on the women entrepreneurship development. These 5 parameters are as follows:-
1. Traits (weightage ~ 3.65 for success)
2. Type of venture (weightage ~ 3.06 for success)
3. Internal support (weightage ~ 2.82 for success)
4. Demographic factors (weightage ~ 2.51 for success)
5. External factors (weightage ~ 2.30 for success)
6. Miscellaneous Factors (weightage ~ 0.66 for success)
Based on a total scale of 15 points.
Importance of the model
This model indicates that while external factors, which include external funding (as provided by the government/ NGO’s etc) is a very important factor, however it is not a very critical factor. The most important factor is the trait factor. Sometimes also revealed as the “fire in the belly “ or the risk taking ability, closely followed by the type of venture as this includes the traditional type business and the modern type business (Annex. III) and the internal support which includes support from the family. The model depicts that these parameters need to be given more attention during the women entrepreneurship development tomake the women independent.
Chapter – 9 CONCLUSION
The growth of entrepreneurship signifies the economic development of a country. Women constituting nearly 50% of the population have specific role to play in this area. Of late women entrepreneurs especially in rural
Maharashtra have been able to show certain achievements. They have not only brought a change in themselves but have also brought drastic changes in their families and villages. The impact of entrepreneurship development among women with micro enterprise have displayed a positive impact on the family. For attaining this several promotional agencies and institutions have been set up at national and state levels.
The objectives of the study have brought about certain conclusions with respect to the study. The socio-demographic profile of women respondents brings out the fact that most of the women ventured into entrepreneurship in their midage of life. The three main reasons for this is increased needs in the family, growing household expenses, education of children marriage of daughters which forced women to look for sources of income to support the family. It was also revealed during the study that women focus on entrepreneurship post 30 years of age because that is the time when the women focus on their own interest and maturity at this stage of life enables them to cope better with the pressure of a male dominated society specially in rural region.
Similarly education definitely has an impact on entrepreneurship as it opens up an arena in which women can complete with men and prove their independent identity. Education also makes a women more confident and capable of recognizing the potential area of exploration in various stage of the entrepreneurial activity. Most of them with a middle school education felt it important as it seemed to have facilitated them in approaching relevant organizations for financial loans and articulate in day to day running and marketing for their enterprise. Being schooled also enabled them to maintain accounts and deal with finances but the success of such women running micro enterprise obviously depend on factors other than formal education.
Religion is the belief followed by the community. This was taken into consideration as certain communities and religions do not encourage entrepreneurship. Most of the region covered large number of Hindu community women who ventured into entrepreneurship.
The marital profile, as regards entrepreneurship, there is a strong belief among respondents that it is only after marriage that women are more capable of withstanding the pressures of business life. The discussions also brought to fact that spouses were largely perceived as helpful and supportive of the business activity. It also brought forth that most of the respondents were already married when they started their business; they also considered that they could not have been better entrepreneurs had they been unmarried.
The unmarried were usually those who were not marriageable age or have not married because of economic responsibility. Family type, the respondents from nuclear families reported that they did not have help available at home and they had to take care of all the house work and children. Thus they did not have much time to spend running around for financial support and so found it difficult to access loans. The lengthy procedures for getting credit sanctioned, no support from credit institutions, lack of follow up demotivated the respondents from nuclear families could cope the stress more easily. At the same time, it was mentioned that the respondents from the nuclear families had to face fewer problems as far as answering the in-laws for their actions taken at home as well as in business.
Women from joint families had the advantage of leaving their children at home with their in-laws. The family thus plays an important role in the entrepreneurship development process of women. The socio demographic profile is important so that the organizations focusing on women entrepreneurship development can focus accordingly to bring in the change.
Women Entrepreneurship Development in women is mostly happening as it brings monetary benefit to the individual and her family. Though there is monetary benefit, the women are still dependent on their families for reasons of support to bring about a sustainable venture. The dependence is for morale support to balance the family affairs and for managing the business.
The key driver for entrepreneurship development among women has been money due to families economical problems such as jobless husband or husband who is drunkard or on contractual work. During the course of study, it was researched that though initially, it is a monetary benefit the women venture into business, but later it is the interest and passion towards business which helps her to sustain the business. During the study a model was created identifying the parameters which have critical impact for economic independence of women entrepreneur. The study through the model proves that the 5 pillars for the success of women entrepreneurship development are the individual traits of a person, the type of venture chosen, the demographic factors the internal support system and the external support system. This model can be used by the grassroot level workers of the government and non-government organization to identify whether the entrepreneurship programme would be successful.
The study also brought to light that most of the respondents have brought a change in their financial positions after starting the business which has also brought about a change in the standard of living of the family. This has finally brought about a positive self esteem in the women entrepreneurs. Thus proving that there has been empowerment of women entrepreneurs through entrepreneurship development which has brought a positive impact on the lives of the family and improvement in the community and society at large.
Chapter – 10
SUGGESTIONS AND RECOMMENDATIONS
The findings of the study noticed that rural area especially interiors of
Maharashtra is a potential area for bringing about entrepreneurship development. It was seen during the study that each geographic region has its own natural resource availability which is not being utilized to its optimum capacity due to unawareness of the locals. Most of the women in the interiors of Maharashtra especially in the low income group are also a part of the self help group, but still there are areas of improvement. Suggestions/ remedial measures for change to be brought.
1. Requirement of Proactive Role of Government and Non-
Government Organisations/ Institutions i) The entrepreneurship development process is maximum among the
age group of 31 to 40, but this happens mostly due to mid life crisis
especially due to economic crisis. It becomes very essential that the
organizations and institutions work with the women at a close level and
educate the women with importance of entrepreneurship and economic
independence. The institution and organizations should classify their
target groups educate them before the women can enter into a mid
married phase of life and work only for money keeping short term
benefit in mind.
ii) As it was also analysed and observed that women move towards this
area only for financial benefits though they may possess the in born
qualities of an entrepreneur they cannot identify it themselves and
need another person to educate them about the same. Absence of
focus oriented functioning and future planning such as they are not
aware about certain aspects involved in business. It is at this stage that
there are many government and non-government bodies who work with
these ladies through their grassroot level workers, hence they need to
bring in a light format or method in the local language to make the
women realize the importance of passion, leadership, business and the
output of this being money rather than focusing only on money. The
grass root level workers are also not aware of certain aspects such as
how to come up with an idea, how to create a business plan, maintain
accounting and counseling the women and men. They do not take
interest as they are not paid well for their work by the organization and
institutions. Hence the organisation needs to take care of them well to
bring results.
(iii) Most of the women in the interiors of Maharashtra only think of
business in terms of doing it at an individual level and bringing about
change for herself and her family and village even the government and
non government organizations have only focused on individual
business inspite of women doing the same business with the same
resources. Government and non-government organizations should
start focusing on cluster development in entrepreneurship based on the
natural resource availability. 2. Training Programme for women Entrepreneurs should be more
specific and practical oriented:
i) Technical Modules:
Introduction of proper education modules needs to be done. Such as
leadership module, Accounting Module, Marketing module in simple
language can be done among the self help groups. The Self Help
Groups have been focused as most of the women in rural Maharashtra
are a part of the self help group and the group meetings could be the
time when these modules can be taught to them keeping a duration
period of 2 weeks for each module and then revising it as per the need
of the village.
ii) Support Modules:
Major lot of women who enter into entrepreneurship with respect to any
region do face a lot of obstacles from family till they prove themselves
Though they become income earners, in the first year of business they
are dependent on the family to sustain themselves in the business.
Hence it is very essential that when the women is being educated
about the entrepreneurship process the head decision makers of the
family or the husband also be educated about entrepreneurship. But
while doing this it should also be seen that they do not become
decision makers for the women’s business. Introduction of support
programmes can be done by the government and non government
training centres.
(iii) Social and Health Modules:
As per observation, it was seen that women as they begin to earn they
spend their earnings on value items such as jewellery, television,
purchase of bike for jobless husband and ignore important issues such
as health, food etc. Government officials when do the monitoring of the
upliftment of family ignore this issue and its importance. Hence
counseling needs to happen or training needs to be given with respect
to the health issue and its importance.
b) There is also the need to train the women about sanitary conditions to
be followed for themselves and the family so that it spreads across the
village. Women have modified their house from Kaccha house to pucca
house but have not build toilets. The contribution of women to family is
low in such case especially those with young daughters. Hence training
for “Swasta Ghar and Swach Village” needs to be focused.
(iv) Modern Business Modules:
As seen and observed during the study that most women focus on
individual business than group business not understanding the format
of cluster business. Hence training needs to be given to the women
about cluster development and its importance.
3) The village bodies along with the government and non government
organizations could facilitate the formation of professional bodies
where the entrepreneurs could come together and establish linkages
for mutual benefit.
4) A database of resource and resource linkages for entrepreneurship
development should be developed at the headquarters of all the
organization which are working for the upliftment of women in rural
Maharashtra.
5) There should be better established links among various organizations
who are working for entrepreneurship development and women's
empowerment rather than having competition for yearly target
achievement amongst themselves.
6) Banks need to increase their fund release during the gradation of self
help group and their business so that the women are motivated to do
business so that they not only bring a change for themselves but also
for the family and society.
7) Involvement of academicians for the change process along with
government and non government organization is recommended to see
a new rural Maharashtra.
ANNEXURE - I
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ANNEXURE - II
Padmashree Dr. D.Y. Patil University Department of Business Management “Impact of Women Entrepreneurship Development on Families: A Study of Women run micro enterprises in selected Districts of Maharashtra”
QUESTIONNAIRE
Please tick () the appropriate answer.
1.A. Identification of Women Entrepreneur.
1.1. Name :
1.2. Age :
Category Code 1. Below 20 years 1 2. 21 – 30 years 2 3. 31 – 40 years 3 4. 41 – 50 years 4 5. 50 years and above 5
1.3. Education of the Entrepreneur.
Category Code 1. Illiterate 1 2. Literate (without formal education) 2 3. Primary school 3 4. Middle School 4 5. High School 5 6. H.S.C. completed 6 7. Graduation Completed 7 8. Other (specify) 8
1.4. Religion
Category Code 1. Hindu 1 2. Muslim 2 3. Christian 3 4. Others (specify) 4
1.5. Marital Status
Category Code 1. Married 1 2. Unmarried 2 3. Divorcee 3 4. Widow 4
2. Description of the family Category Code Type of Family 1. Nuclear 1 2. Joint 2 3. Extended 3
2.1. Head of the Household Category Code 1. Father-in-Law 1 2. Husband 2 3. Other 3 4. Self 4
2.2. Total Income of the family before business
Category Code 1. Upto Rs. 1500 1 2. Rs. 1500 – Rs. 3000 2 3. Rs. 3001 – Rs. 5000 3 4. Rs. 5000 – Rs. 10000 4 5. Rs. 10000 & above 5
2.3. Total income of the family after business.
Category Code 1. Upto Rs. 1500 1 2. Rs. 1500 – Rs. 3000 2 3. Rs. 3001 – Rs. 5000 3 4. Rs. 5000 – Rs. 10000 4 5. Rs. 10000 & above 5
2.4. Do you have income earning assets
Category Code Yes 1 No 2
3. Enterprise and Entrepreneurial Activity.
3.1. Name your Entrepreneurial Activity.
Category Code 1. Manufacturing 1 2. Beauty Parlour 2 3. Printing 3 4. Flower/ Bangle shop 4 5. Grocery Shop 5 6. Fish/ Vegetable 6 7. Tailoring 7 8. Any other 8
3.2. Years of experience in existing business
Category Code 1. 0 – 2 years 1 2. 2 – 5 years 2 3. 3 and above. 3
3.3. Factors which motivated you for venture.
Category Code 1. To support family earning 1 2. To gain social recognition 2 3. No job 3 4. To pursue interest 4 5. Independence/ Self Confidence 5
3.4. Who runs the enterprise?
Activities Code 1. Production 2. Getting raw material 3. Bargaining 4. Marketing 5. Other (specify)
Codes of Person
Person Code Self 1 Self & Spouse 2 Self & Children 3 Self & Others 4
3.5. Do you go out for marketing
Category Code Yes 1 No 2
3.6. Have you gained confidence to run your enterprise ?
Activities Yes No (2) (1) Talking to customers Buying Material for packing Finding new markets Buying raw materials Increasing the scale of business Solving problems Dealing with regulatory bodies
3.7. Are you confident going out alone to places.
Places/ People Yes No (2) (1) Loan Bank for Money transaction To express views in public. To solve matters at home and society.
3.8. Have you taken loan for starting business. Category Code Yes 1 No 2
3.9. If yes then from which source?
Activities Code 1. Internal loan 1 2. Bank 2 3. NGO/SHG 3 4. Money Lender 4 5. Government Agency 5 6. Co-operative Society 6
3.10. Did you take the initiative for loan.
Category Code Yes 1 No 2
3.11. How did you find the process of financial borrowings?
Category Code Favourable 2 Unfavourable 1
3.12. Do you possess land on your own for business.
Category Code Yes 1 No 2
4. Occupation before entering into venture.
Category Code Daily wage worker 2 House-wife 1
4.1. Have you joined SHG?
Category Code Yes 1 No 2
4.2. Did you undergo any training?
Category Code Yes 1 No 2
4.3. If yes, then what kind of training?
Kind of training Usefulness of training 1. Training for banking 2. Skill based training 3. Training for social awareness. 4. Functional Literacy 5. Importance of group. 6.. Training for gender equality.
Category Code Useful 1 Not Useful 2 Very useful 3 Not Applicable 4
5. Saving pattern of women entrepreneurs.
Category Prior After Were you able to save If yes, then: Home Bank Post Office Chit Fund SHG
Category Code Yes 1 No 2
6. CONTROL OVER INCOME
6.1. If you earn wage or income, who has control over it.
Yes – 2 No – 1
No. Exercise of control Prior to After the business business i. No income hence not applicable ii. Self iii. Share with family members iv. Handed over to spouse v. Handed over to family members
7. SHIFT IN ECONOMIC STATUS
Yes – 2 No – 1
7.1. Household assets.
No. Assets Owned Owned Present before after status i. Land ii. House iii. Addition/Alteration of the house iv. Car/Jeep/Tractor v. Cyle vi. Radio vii. Television viii. Utensils ix. Refrigerator. x. Cooking gas xi. Mixer xii. Room cooler xiii. Water filter xiv. Jewellery xv. Steel almirah xvi Sewing machine embroidery xvii Loom xviii Fan/table fan xix Telephone xx Other
7.2. Agricultural and livestock.
No. Exercise of control Prior to After the Business business i. Plough ii. Bullock/Bullar iii. Cow iv. Buffalo v. Goat vi. Sheep vii. Hen/cock viii. Other
7.3. Standard of living: Codes Yes – 2 No - 1
a. If your house ______i. Owned. ii. Rented iii. Others.
b. Type of house ______i. Kachha ii. Pucca iii. Semi puca
c. Changes occurred in the facilities available to the household?
No. Facilities Before After 1. Number of rooms 2. Electricity 3. Water tap in house 4. Hand pump 5. Toilet – Sanitary 6. Toilet – dry 7. Bathroom 8. Soak pit 9. Change in type of house.
Codes Yes – 2, No – 1, N.A. – 0
d. Consumption of food/nutrition.
Food items Has the intake increased? Yes/No Dal Milk Meat/Fish/Egg Grains Vegetables
Codes : Yes – 2, No – 1, N.A. – 0
e. Health improvements before and after business.
Access and use of Medical facility Before After i. Govt. Hospital/Dispensary ii. Govt. doctor. iii. Private doctor/Hospital iv. Specialist. v. Ayurvedic vi. Homeopathic vii. Homeoremedies. viii. Traditional ix. Bhagat x. Vaccination
Codes : Yes – 2, No – 1, N.A. – 0 f. Education
Codes : Yes – 2, No – 1, N.A. – 0 No. Improvement in schooling of Before After children i. Regular attendance of children. ii. Admission of girl children iii. In terms of higher education iv. In terms of facilities – books, dress etc. v. Avoidance of drop out. vi. Any other (specify) g. Awareness about socio-political issues extend of awareness. Code : Yes – 2, No – 1
No. Aspects Yes/No After business Heard Know details i. Legal age of marriage ii. Family welfare programme iii. Minimum wage. iv. 33% reservation for women v. Mahila Gram Sabha vi. Prohibition of child labour
8. INITIATIVE/OPINION/DECISION MAKING
Codes : Yes – 2, No – 1, N.A. – 0
Decision on Before After doing No. doing business business i. Final decision in purchase of fixed assets ii. Purchase of radio, television. iii. Sending children to school and higher education iv. The initiative to vaccinate children v. Send girl child to school vi. Purchase of things related to business vii. Taking loans viii. Migration in search of employment ix. Children marriage x. Any other specify
8.1. Social status: a. Do your family members accept your advice/suggestions in household matters.
Codes : Yes – 2 No - 1
8.2. a. Do you think this is due to your becoming more enterprising and its related activities?
Codes : Yes – 2 No - 1
b. If yes how has the change come about ? ______
8.3. a. Has this enabled you to command more respect in family/ neighbourhood? Codes : Yes – 2 No - 1
b. If yes give example. ______
8.4. Do you enjoy better status in the community (village/ caste)? Codes : Yes – 2 No - 1
9. Leadership status before doing and after doing business. a. What is your involvement in social and political activities?
No. Participation Before After i. Gram Panchayat ii. Panchayat Samiti iii. Gram Sabha iv. School Committee v. Health Committee. vi. Women Group. vii. Water Committee viii. Forest Committee
Codes for type of participation.
1. Merely attendance. 2. Active member 3. Office bearer 4. No participation.
9.1. a. Did you vote during the recent elections? ______
Codes : 1. Yes 2. No
b. If yes, how did you exercise your choice?
No. Elections Whether voted How decision Tick ( ) was made 1. Gram Panchayat 2. Panchayat Samiti 3. Zilla Parishad 4. State assembly 5. Lok Sabha
* Code of Code : 1. On your own. 2. Influenced by family 3. Influenced by others
9.2. If you are elected to the Panchayat, are you able to function independently?
Codes : Yes – 2, No – 1, N.A. – 0
10. OBSERVATION BY INVESTIGATOR. ______
______
______
ANNEXURE – III
LIST OF ACTIVITIES UNDERTAKEN BY WOMEN ENTREPRENEURS
1. Garment Shop
2. Vegetable Shop
3. Kirana Shop
4. Sale of Tiffins
5. Sarees, Dress Material and cutlery shop.
6. Xerox and computer Typing.
7. Tailoring Shop.
8. Fur Toys Manufacturing.
9. Stationery shoop.
10. Papad unit
11. Saree – Fall beeding and embroidery.
12. Beauty Parlour.
13. Cycle renting and repairing.
14. Distribution and Preparing Agarbatti.
15. Hosiery Shop.
16. Shoes and Bags manufacturing.
17. STD/PCO booth.
18. Photo studio.
19. Bakery Shop.
20. Cosmetic shop.
21. Cigarette and Chocolate stall.
22. Grinding shop. 23. Soaked lentils.
24. Dry fish
25. Flower shop.
26. Vada Pav Shop.
27. Bangles
28. Fish
29. Milk stalls
30. Maternity pad
31. Woolen garments.
32. Block printing.
33. Pepsi Cola Manufacturing
34. Sanitary Napkins
35. Matts
36. Bamboo brooms
37. Honey unit
38. Liquor unit
39. Cashew unit
40. Perfume unit etc.
ANNEXURE - IV
STATISTICAL TABLES
8.1.10 . Interdependence of women entrepreneurs and families:
Case Processing Summary
Cases Valid Missing Total N Percent N Percent N Percent status_of_women * 500 100.0% 0 .0% 500 100.0% income_of_family
Status_of_women * income_of_family Crosstabulation
income_of_family less than gre ater than 5000 5000 status_of_wom women depend on Count 95 219 en family Expected Count 140.7 173.3 family depend on Count 129 57 women Expected Count 83.3 102.7 Total Count 224 276 Expected Count 224.0 276.0
Chi-Square Tests
Asymp. Sig. Exact Sig. Exact Sig. Value Df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 72.212 a 1 .000 Continuity Correction b 70.640 1 .000 Likelihood Ratio 73.522 1 .000 Fisher's Exact Test .000 .000 Linear-by-Linear 72.068 1 .000
Association N of Valid Cases 500 a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 83.33. b. Computed only for a 2x2 table
Symmetric Measures
Value Approx. Sig. Nominal by Contingency .355 .000 Nominal Coefficient N of Valid Cases 500
T-Test
[DataSet2]
Paired Samples Statistics Std. Std. Error Mean N Deviation Mean Pair 1 VAR00001 1.7700E3 500 405.49828 18.13443 VAR00002 7.5980E3 500 3509.56266 156.95241
Paired Samples Correlations N Correlation Sig. Pair 1 VAR00001 & 500 -.103 .021 VAR00002
8.3. Table Analysis Case Processing Summary Unweighted Cases N Percent Valid 500 100.0 Excluded Missing or out-of-range 0 .0 group codes At least one missing 0 .0 discriminating variable Both missing or out-of-range group codes and at least one 0 .0 missing discriminating variable Total 0 .0 Total 500 100.0 Group Statistics Valid N (listwise) VAR00011 Mean Std. Deviation Unweighted Weighted 1 VAR00001 5.0398 1.49077 251 251.000 VAR00002 4.0120 1.66969 251 251.000 VAR00003 2.8606 1.86989 251 251.000 VAR00004 4.0359 1.60334 251 251.000 VAR00005 3.1992 1.88047 251 251.000 VAR00006 3.7131 1.73130 251 251.000 VAR00007 3.0717 1.90022 251 251.000 VAR00008 3.9203 1.76907 251 251.000 VAR00009 3.9124 1.73444 251 251.000 VAR00010 3.9522 1.58925 251 251.000 VAR00012 1.9402 1.66386 251 251.000 2 VAR00001 5.0843 1.55961 249 249.000 VAR00002 4.0482 1.70320 249 249.000 VAR00003 5.4940 4.60025 249 249.000 VAR00004 4.1406 1.65598 249 249.000 VAR00005 4.6867 1.94228 249 249.000 VAR00006 4.5743 1.99685 249 249.000 VAR00007 4.9357 1.97665 249 249.000 VAR00008 4.0602 1.61407 249 249.000 VAR00009 3.9237 1.63819 249 249.000 VAR00010 3.7751 1.62318 249 249.000 VAR00012 6.3414 4.43592 249 249.000
Total VAR00001 5.0620 1.52407 500 500.000 VAR00002 4.0300 1.68487 500 500.000 VAR00003 4.1720 3.74252 500 500.000 VAR00004 4.0880 1.62898 500 500.000 VAR00005 3.9400 2.04959 500 500.000 VAR00006 4.1420 1.91551 500 500.000 VAR00007 4.0000 2.14971 500 500.000 VAR00008 3.9900 1.69341 500 500.000 VAR00009 3.9180 1.68551 500 500.000 VAR00010 3.8640 1.60707 500 500.000 VAR00012 4.1320 4.00233 500 500.000
Tests of Equality of Group Means Wilks' Lambda F df1 df2 Sig. VAR00001 1.000 .106 1 498 .744 VAR00002 1.000 .058 1 498 .810 VAR00003 .876 70.510 1 498 .000 VAR00004 .999 .516 1 498 .473 VAR00005 .868 75.700 1 498 .000 VAR00006 .949 26.557 1 498 .000 VAR00007 .812 115.560 1 498 .000 VAR00008 .998 .853 1 498 .356 VAR00009 1.000 .006 1 498 .940 VAR00010 .997 1.519 1 498 .218 VAR00012 .697 216.392 1 498 .000
Analysis 1
Box's Test of Equality of Covariance Matrices
Log Determinants VAR00011 Rank Log Determinant 1 11 3.115 2 11 8.659 Pooled within-groups 11 7.291
The ranks and natural logarithms of determinants printed are those of the group covariance matrices.
Test Results Box's M 704.714 F Approx. 10.432 Df1 66 Df2 7.907E5 Sig. .000
Tests null hypothesis of equal population covariance matrices. Summary of Canonical Discriminant Functions
Eigenvalues
Canonical Function Eigenvalue % of Variance Cumulative % Correlation 1 1.280 a 100.0 100.0 .749 a. First 1 canonical discriminant functions were used in the analysis. Wilks' Lambda
Test of Function(s) Wilks' Lambda Chi-square df Sig. 1 .439 405.947 11 .000
Standardized Canonical Discriminant Function Coefficients
Function 1 VAR00001 -.039 VAR00002 -.098 VAR00003 -1.780 VAR00004 .248 VAR00005 -.072 VAR00006 -.048 VAR00007 1.029 VAR00008 .093 VAR00009 -.080 VAR00010 -.413 VAR00012 1.990
Structure Matrix Function 1 VAR00012 .583 VAR00007 .426 VAR00005 .345 VAR00003 .333 VAR00006 .204 VAR00010 -.049 VAR00008 .037 VAR00004 .028 VAR00001 .013 VAR00002 .010 VAR00009 .003
Pooled within-groups correlations between discriminating variables and standardized canonical discriminant functions.
Variables ordered by absolute size of correlation within function.
Canonical Discriminant Function Coefficients Function 1 VAR00001 -.026 VAR00002 -.058 VAR00003 -.508 VAR00004 .152 VAR00005 -.038 VAR00006 -.026 VAR00007 .531 VAR00008 .055 VAR00009 -.047 VAR00010 -.257 VAR00012 .595 (Constant) -1.510
Unstandardized coefficients
Functions at Group Centroids Function VAR00011 1 1 -1.125 2 1.134
Unstandardized canonical discriminant functions evaluated at group means
Classification Statistics
Prior Probabilities for Groups Cases Used in Analysis VAR00011 Prior Unweighted Weighted 1 .500 251 251.000 2 .500 249 249.000 Total 1.000 500 500.000
Classification Function Coefficients VAR00011 1 2 VAR00001 2.166 2.108 VAR00002 .828 .697 VAR00003 -.172 -1.319 VAR00004 .655 .999 VAR00005 .318 .233 VAR00006 .654 .596 VAR00007 -.240 .959 VAR00008 .492 .616 VAR00009 1.399 1.293 VAR00010 .475 -.106 VAR00012 .123 1.466 (Constant) -15.001 -18.421
8.4 (a) Key Drives, Mean and Std.Deviation.
Descriptive Statistics
Mean Std. Deviation Analysis N Acquired Skills 4.1000 1.65635 500 Availability of Funds 4.0800 1.65864 500 Passion 4.1100 1.68748 500 Hobby 4.0920 1.65802 500 Family Business 4.0400 1.65284 500 Need 4.0180 1.69097 500 Jobless Husband 3.9340 1.68503 500 Money 4.0180 1.69097 500 Improvement in 3.9340 1.68503 500 Standard of living Resource Available 4.0900 1.68153 500
Table 8.4. (b) Correlation Matrix a
Avail- Famil Jobles Improv Resourc Acquired ability Passio Hobb Busines s_Hus -ement eavailab Skill Funds n y s Need band Money Std le Acquired 1.000 .260 .775 .289 .421 .262 .101 .262 .101 .252 Skills Availabilit .260 1.000 .292 .821 -.058 -.016 -.152 -.016 -.152 -.018 y of Funds Passion .775 .292 1.000 .360 .359 .152 -.017 .152 -.017 .143 Hobby .289 .821 .360 1.000 -.063 -.011 -.135 -.011 -.135 -.014 Family .421 -.058 .359 -.063 1.000 .123 .166 .123 .166 .077 Business Need .262 -.016 .152 -.011 .123 1.000 .648 1.000 .648 .929 Jobless .101 -.152 -.017 -.135 .166 .648 1.000 .648 1.000 .577 Husband Money .262 -.016 .152 -.011 .123 1.000 .648 1.000 .648 .929 Improvem ent in .101 -.152 -.017 -.135 .166 .648 1.000 .648 1.000 .577 Standard of living Resource .252 -.018 .143 -.014 .077 .929 .577 .929 .577 1.000 Available
8.4.(c) Communalities
Initial Extraction Acquired Skills 1.000 .655 Availability of Funds 1.000 .559 Passion 1.000 .660 Hobby 1.000 .600 Family Business 1.000 .140 Need 1.000 .886 Jobless Husband 1.000 .752 Money 1.000 .886 Improvement in 1.000 .752 Standard of living Resource Available 1.000 .796
Extraction Method: Principal Component Analysis.
8.4. (d) Total Variance
Total Variance Explained
Extraction Sums of Rotation Sums of Squared Initial Eigenvalues Squared Loadings Loadings % of % of % of Compo- Varianc Cumulat Varianc Cumulat Varianc Cumulat nent Total e ive % Total e ive % Total e ive % 1 4.196 41.957 41.957 4.196 41.957 41.957 4.153 41.527 41.527 2 2.491 24.910 66.867 2.491 24.910 66.867 2.534 25.340 66.867 3 1.436 14.358 81.225 4 .853 8.527 89.752 5 .546 5.458 95.209 6 .222 2.222 97.431 7 .168 1.678 99.109 8 .089 .891 100.000 9 2.567E- 2.567E- 100.000 16 15 10 2.156E- 2.156E- 100.000 16 15
Extraction Method: Principal Component Analysis.
8.4. (1) Graph
8.4. (e) Rotated Component Matrix a Component 1 2 Acquired Skills .357 .727 Availability of Funds -.059 .746 Passion .226 .781 Hobby -.043 .773 Family Business .255 .275 Need .941 -.006 Jobless Husband .831 -.249 Money .941 -.006 Improvement in Standard .831 -.249 of living Resource Available .892 -.004
Extraction Method: Principal Component Analysis.
a. 2 components extracted.
Rotated Component Matrix a Component 1 2 Acquired Skills .237 .774 Availability of Funds -.177 .727 Passion .099 .807 Hobby -.166 .757 Family Business .208 .312 Need .930 .144 Jobless Husband .860 -.114 Money .930 .144 Improvement in Standard of living .860 -.114 Resource Available .881 .138
Extraction Method: Principal Component Analysis. Rotation Method: Equamax with Kaiser Normalization.
a. Rotation converged in 3 iterations.
Component Transformation Matrix Component 1 2 1 .987 .159 2 -.159 .987
Extraction Method: Principal Component Analysis. Rotation Method: Equamax with Kaiser Normalization.
Variables at the end of an axis are those that have high loadings on only that factor and hence describe the factor. Variables near the origin have small loadings on both the factors. Variables that is not near any of the axes are related to both the factors.
Factor one is highly related with variables hobby, passion and acquired skill. Thus, factor 1 may be labeled as interest of the individual. A plot of the factor loading confirms these interpretations. Variables money, need, improvement in std of living and jobless husband are at the ends of horizontal axes (factor 2). The component 2 caan be labelled as financial status of the family.
Table 8.4. (h) Component Score Coefficient Matrix Component 1 2 Acquired Skills .038 .302 Availability of Funds -.062 .293 Passion .003 .318 Hobby -.059 .305 Family Business .042 .119 Need .222 .033 Jobless Husband .211 -.067 Money .222 .033 Improvement in .211 -.067 Standard of living Resource Available .210 .032
Extraction Method: Principal Component Analysis.
Rotation Method: Equamax with Kaiser Normalization.
Component Score Covariance Matrix Component 1 2 1 1.000 .000 2 .000 1.000
Extraction Method: Principal Component Analysis.
Rotation Method: Equamax with Kaiser Normalization.
Table 8.4 (B) Logit Model Analysis
Case Processing Summary Unweighted Cases a N Percent Selected Included in 350 100.0 Cases Analysis Missing Cases 0 .0 Total 350 100.0 Unselected Cases 0 .0 Total 350 100.0 a. If weight is in effect, see classification table for the total number of cases.
Dependent Variable Encoding Original Value Internal Value Group 1 0 Group 2 1
Block 0: Beginning Block
Classification Table a,b
Predicted Group Percentage Observed Group 1 Group 2 Correct Step 0 Group Group 1 175 0 100.0 Group 2 175 0 .0 Overall Percentage 50.2 a. Constant is included in the model. b. The cut value is .500
Variables in the Equation
B S.E. Wald df Sig. Exp(B) Step 0 Constant -.008 .089 .008 1 .929 .992
Variables not in the Equation a Score df Sig. Step 0 Variables VAR00001 1.521 1 .217 VAR00002 .058 1 .810 VAR00003 1.521 1 .217 VAR00004 .423 1 .515 VAR00005 1.178 1 .278 VAR00006 .855 1 .355 VAR00007 .006 1 .940 VAR00008 .855 1 .355 VAR00009 .006 1 .940 VAR00010 1.521 1 .217 a. Residual Chi-Squares are not computed because of redundancies.
Block 1: Method = Enter
Omnibus Tests of Model Coefficients Chi-square Df Sig. Step 1 Step 7.725 6 .175 Block 7.725 6 .175 Model 7.725 6 .175
Model Summary Cox & Snell R Nagelkerke R Step -2 Log likelihood Square Square 1 685.415 a .015 .020
a. Estimation terminated at iteration number 3 because parameter estimates changed by less than .001.
Classification Table a
Predicted Group Percentage Observed Group 1 Group 2 Correct Group Group 1 150 101 59.8 Step 1 Group 2 133 116 46.6 Overall Percentage 53.2
a. The cut value is .500
Variables in the Equation
B S.E. Wald df Sig. Exp(B) Step 1 a VAR00001 -.137 .064 4.558 1 .033 .872 VAR00002 -.056 .096 .335 1 .563 .946 VAR00004 .121 .099 1.474 1 .225 1.128 VAR00005 .104 .059 3.109 1 .078 1.109 VAR00006 .090 .068 1.740 1 .187 1.094 VAR00007 -.058 .070 .691 1 .406 .944 Constant -.294 .417 .496 1 .481 .746
ANNEXURE – V-A MAHARASHTRA REGION DIVISION
1. Konkan Region also called as the Konkan coast or Karavati, is a rugged section of the western coast line of India from Raigad to
Mangalore. Konkan is also one of six administrative sub-divisions of the State of Maharashtra comprising of the coastal districts. The
Maharashtra Konkan Districts are Sindhudurg, Ratnagiri, Raigad which includes Alibag, Colaba, Mumbai Urban, Mumbai Suburban and
Thane.
2. Western Maharashtra is also called as desh means country which is a Sanskrit word. This region of Maharashtra state is in central
India. Western Maharashtra is bounded on the west by the western ghats or the Sahyadri range, on the north by the Kandesh and on the east by the Marathwada regions of Maharashtra and on the South by the State of Karnataka. The region of Western Maharashtra includes
Pune, Kolhapur, Satara and Sangli.
3. Marathwada has its origin in the word Bara – Hatti – Vada meaning a region of Dhangar community. On August 15, 19o47 India received its independence from the British Raj, Nizam ruling at that time chose to merge with Hyderabad State into India. Subsequently on
November 1, 1956. Marathwada was transferred to Bombay State.
Bombay State was then divided into Maharashtra and Gujarat State.
Marathwada becoming a part of the former. The districts under this region are Aurangabad, Nanded, Latur, Jalna, Beed, Parbhani,
Osmanabad, Hingoli.
4. Vidarbh: In 1956 Vidarbha was transferred to Bombay State alongwith all Marathi speaking area. In 1960 Bombay State was split along linguistic lines into the States of Maharashtra and Gujarat.
Marathi speaking Vidarbha became part of the state of Maharashtra and Gujarat. Marathi speaking Vadarbha became part of the state of
Maharashtra. Vidarbha occupies 31.6% of total area and holds 21.3% of total population of Maharashtra. It is the eastern region of
Maharashtra and is made up of the Nagpur and Amravati Division. The eleven districts of Vidarbha Region include Nagpur, Amravati, Akola,
Buldhana, Washim, Yavatmal, Wardha, Chandrapur, Gadchiroli,
Bhandara and Gondia.
5. Khandesh/Northern Maharashtra is a region of Central India, which forms the northwestern portion of Maharashtra state. Originally the Khandesh state was found and ruled by Taruqi dynasty with capital at Burhanpur. During 1388 to 1888 the Khandesh State covered the areas of the today’s Jalgaon, Dhule, Nandurbar districts of
Maharashtra State and Burhanpur district of Madhya Pradesh state.
The term “Khandesh” and “Deccan” thus connote historical and political affiliations. Khandesh lies on the North Western corner of the
Deccan plateau, in the valley of the Tapti River and is bound to the north by the Satpura Range, to the east by the Vidarbha region, to the
South by the hills of Ajanta belonging to the Marathwada region of
Mararashtra and to the west by the Northernmost ranges of the
Western ghats and beyond them the coastal plain of Gujarat. After India’s independence in 1947, Bombay province became Bombay
State which in 960 was divided into the linguistic states of Maharashtra and Gujarat and Khandesh became a part of Maharashtra and now identified as the Northern Maharashtra region. The Northern
Maharashtra includes Nashik, Dhule, Jalgaon, Nandurbar and
Ahmednagar.
Source : Maharashtra Gazetter and respective Dist. Gazetter, Government of Maharashtra.
ANNEXURE – V-B DISTRICT DETAILS
1. Ratnagiri District is located in the South Western part of
Maharashtra state on the Arabian sea coast. The surrounding area is bordered by the Sahyadri Hills on the East and Arabian sea on the
West. In 1948 the independent princely state of Sawantwadi was merged with the Indian Union in 956 with Bombay Province. In 1960 with the creation of Maharashtra, Ratnagiri became a district. In 1981
Ratnagiri district was bifurcated and the new district of Sindhudurg was created. Ratnagiri has nine tahsils of Mandangad,Dapoli, Khed,
Chiplun, Gunagar, Sangamneshwar, Ratnagiri, Lanja and Rajapur. The total area of Ratnagiri is 8196 sq.kms. The total population is
16,96,482. The main crops being rice, mango, cashew, coconut and the main language spoken is Marathi. It is also possesses the distinction that Lokmanya Bal Gangadhar Tilak was born at Ratnagiri.
Ratnagiri is also famous for its alphonsa mango. Some of the main occupations in the region of Ratnagiri is agriculture and fishing.
2. Sindhudurg is the land of culture and Natural beauty.
Sindhudurg is famous for its natural beauty like beaches, backwaters, water falls and pilgrimage centres. Sindhudurg is also famous for its forts, Sindhudurg one of the sea forts built in the 17 th century and the famous Padmagarh fort. The name of the fort itself is given to the district. Sindhudurg is boarded by the Arabian Sea on the West and the Sahyadri hills ranges to the East with a total area of 5,207 sq.km. It is also famous for its tropical fruits such as alphonso mangoes, cashews, jamuns etc. The talukas in Sindhudurg include Dodamarg,
Sawantwadi, Vengurla, Kudal, Malvan, Kankavali, Devgad and
Vaibhavwadi. The total population is 8,61,672. The main crops in this region includes rice, vari, nagli, groundnut, mango, cashew, jackfruit, coconut, beetle nut, spices.
3. Pune is well known as the ‘Queen of Deccan’ due to its scenic beauty and rich natural resources. Pune is well known on the world map because of its educational, research and development institutions.
The district also has an importance for its military base. The district has geographical area of 15.642 sq.km. Pune district is bound by
Ahmadnagar district on North East, Solapur district on the South East,
SAtara district on South, Raigad district on the West and Thane district on the North West. It is the second largest district and covers 5.10% of the total geographical area of the state. The western region of Pune district has talukas of Junnar, Ambegaon, Khed, Maval, Mulshi and
Velhal and the eastern part consists of talukas Shirur, Daund, Baramati and Indapur, Bhor, Haveli, Poona City, Purandar. The total population of Pune district is 7,232,555. The main crops of Pune district are rice, jawar, bajra, Sugar cane, ground nut and sunflower are the main crops.
4. Kolhapur is a district newly formed after the merger of Kolhapur and other Indian states with the State of Bombay. It consists of 956 villages of the former Kolhapur state, five villages of the former Kurundwad state, one village of the former Miraj Senior state and seven villages that were formerly in the Belgaum district. It has total area of 7692 sq.kms and sub-divisions of Karveer, Gadhinglaj,
Radhanagri, Ichalkaranji. There 12 talukas in Kolhapur they are
Karveer, Kagal, Panhala, Shahuwadi, Hatkalangale, Shirol,
Radhanagri, Bhudargad, Gadhinglaj, Gaganbawda, Aajra,
Chandangad. The total population of Kolhapur district is 35,15,413.
The main crops of Kolhapur include Sugar cane, rice, Soyabean, ground nut. Kolhapur is also famous for certain places such as
Panhala, Jyotiba, Khidrapur, Dajipur Vishalgad, Nrusinhwadi,
Maunimath Bahubali.
5. Latur district has an ancient historical background. The King
‘Amoghvarsha’ of Rashtrakutas developed the Latur city, originally the native place of the Rashtrakutas. Latur District is the South Eastern part of the Maharahstra state. The distrit is situated on the
Maharashtra Karnataka boundary. On the eastern side of the Latur is
Bidar district of Karnataka whereas Nanded is on the north east,
Parbhani on the northern side, Beed on the Northwest and
Osmanabad on the western and southern side. Manjara this is the main river. The area of Latur district is 7372 sq.kms. The total population of the district was 2,080,285. Latur is divided into 3 sub divisions namely Latur, Nilanga and Udgir and into 10 talukas and 10 panchayat samitis. These are Latur, Udgir, Ahmedpur, Ausa, Nilanga,
Renapur, Chakur, Deoni, Shirur Anantpal and Jalkot. The main produce of Latur is pulses especially Toor Dal, Arhar dal or Pigeon Peas. Latur is also a major trading center for Urad, Moon and Chana along with Tur. There is also produce of oil seeds mainly sun flower and soya bean, nut crackers, locks, brassware milk powder, ginning and pressing. Some of the main attraction of Latur districts are Wadwal
Nagnath, Sai Nandanwan, it has mango plantations, water park and amusement park, Udgir and Ausa have forts which are famous. Latur also has good tourist attraction like Siddheshwar temple, Viraat
Hanuman, Nana Nani park etc.
6. Osmanabad district lies in the Southern part of state. It lies on the Deccan plateau and lies in the Marathwada region. The total area of Osmanabad is 7,512.4 sq.km (2900.6 sq.) The population of
Osmanabad is 14,86,586. The talukas of Osmanabad is Osmanabad,
Tuljapur, Omerga, Lohara, Kallamb, Bhoom, Paranda and Vashi.
Osmanabad is also famous for the Tubjapur temple of goddess
Tuljabhavani. The produce of Osmanabad are Tur dal, lemon, sunflower oil seeds and soya bean.
7. Gadchiroli is among the most densely forested districts of India with a forest cover of 86 percent. The protected forest “vanvaibhav”, with 41 metres tall, 200 years old teak wood trees and bamboo forests of Bhamragad, Etapalli are the places of pride of the district. Tender leaves, which are used for beedi making bring in substantial revenue to government. Fine ancient sculptures of Markanda attract researchers from around the world. A recent finding in the district, claimed to be eggs of dinosaur, has attracted the world’s attention. The area is 14477 sq.kms. The sub divisions are Gadchiroli, Vadsa Aheri. The talukas are Gadchiroli, Armori, Vadsa, Kurkheda, Korchi, Dhanura,
Chamorshi, Aheri, mulchera Bhamragad, Etapalli, Sironcha. The language spoken are Marathi, Hindi, Bengali, Telugu, Gondimali,
Chattisgadhi. The total population is 9,69,960. The main crops include rice, maize, jowar, jawas, sesame and tur. The educational institution scenario is not progressive with only 192 secondary schools and 15 colleges.
8. Bhandara is known as district of Ponds. Famous for bumper crop of rice and bamboo plantations, its traditional craft of manufacturing metal utensils and the thriving mining industry are its principal activities. The area of Bhandara is 3890 sq;kms and the sub- division are Bhandara, Sakoli. The talukas include Bhandara, Mohadi,
Tumsar, Sakoli, Lakhani Lakhandur, Pavani.The total population is
11,35,835. The main crops of Bhandara include rice, wheat, sugarcane, Soyabean jowar, tur, moong, udad, chillies, seasame, mustard. Some of the most important places Bhandara are Gaymukh,
Chandrapur, Korambhi, Nagzeera Sanctury andmemorial to first
Marathi poet Mukundraj at Pavni are some of the tourist place.
9. Nasik is bounded on the north west by the Dangs and Surat districts of Gujarat state, on the north by the Dhulia district, on the east by the Jalgaon and Aurangabad districts, on the South by the
Ahmednagar district and towards the South west by the Thana district.
The district derives its name from that of its headquarters town of Nasik for the origin of which two interpretations are given. The town is sited on the nine peaks or Navashikara and hence it has its name. The other relates to the incident in the Ramayana where at this place
Lakshmana is said to have cut off the nose (Nasika) of Shurpanakha.
The total area being 15,582 sq.km) (6,015 sq.miles) which has a population of 99,14,438. Nasik is primarily agrarian region. Agriculture is still approximately 74 percen tof the total population. The main crops include grape, onion, sugar cane, jowar, cotton, banana, chillies, wheat rice, nagli and pomegranate. Nasik has some tourist places such as
Trimbkeshwar, Saptashringi Hill, Ram Mandir,Gangapur Vaitarana etc.
10. Ahmednagar is Maharashtra’s most advanced district in many ways. It has the maximum number of sugar factories, perhaps to spread the message across of ‘Rural Prosperity through Co-operation;.
The first cooperative sugar factory in Asia was established at
Pravanagar. The area of Ahmadnagar being 17034 sq.kms. The Sub-
Divisions being Shrirampur, Sangamner, Karjat Nagar. The talukas include Nagar, Parner, Pathardi, Shewagaon, Karjat, Shreegonda,
Jamshed, Shrirampur, Nevasa, Akoli, Sangamner, Kopergaon, Rahuri,
Rahta. The total population of Ahmednagar is 40,88,077. The main crops include sugarcane, bajra, jowar. The great tourist destinations include the Shri Saibaba’s Shirdi, one of Ashtavinayakas at Siddhatek and the famous Kanifnath temple, the Maldhok (Indian Bustard) sanctuary and the Rehkuri Sanctuary.
Source : Maharashtra Gazetter and respective Dist. Gazetter, Government of Maharashtra.