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International Journal of Advancements in Research & Technology, Volume 2, Issue 5, M ay-2013 396 ISSN 2278-7763
Copyright © 2013 SciResPub. IJOART
Institutional Shackles to Entrepreneurial Development among the Ethnic Groups in North
East India: A Study on Entrepreneurial Environment in Poumai Naga Ethnic Group
Kh.Pou1 S.K.Mishra2
Abstract
The question of why the Ethnic Groups of North East India continue to remain underdeveloped
has been at the center of recent debates but they are mostly centered around insurgency,
government’s failures, physical and monetary factors, and other economic factors. The prime
driver of economic progress and development is entrepreneurship yet questions relating such
issues were hardly discussed. Therefore, the study attempts to investigate into socio-institutional
environment of the Poumai Naga Ethnic Group to identify those elements which might inhibit
entrepreneurial development. The overall institutional environment indicates the following
characteristic features; (1) persistent complacent and contended economic behavior, (2) lack of
basic business skills, (3) indifferent social attitude towards entrepreneurs and social
stigmatization of unsuccessful businessmen, (4) lack of social support to and encouragement for
entrepreneurship, (5) very high cost village financing and (6) lack of successful entrepreneurial
role model in village.
JEL Classification: B15, B25, Z10
Keywords: Ethnic Group, Poumai Naga, Ethnic Economic Behavior, Social-Cultural and
Attitudinal Elements, Village, Social Stigmatization, Entrepreneurship, Entrepreneurial
Environment, Role Model, Jhuming, Social Attitude
1Department of Economic, North-Eastern Hill University, Shillong, India,
[email protected], 2Department of Economic, North-Eastern Hill University, Shillong, India
Article Info: Received:
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International Journal of Advancements in Research & Technology, Volume 2, Issue 5, M ay-2013 397 ISSN 2278-7763 1 Introduction:
The continuing underdevelopment of the Ethnic Groups in North East India in the face of fast
growing Indian economy needs a critical study on various aspects of the Ethnic economic
behavior in relation to socio-cultural environment which not only envelops them but also
determines their economic decision choice (Hodgson, 1998; Hollingsworth, 2000; North, 1991).
It is also accepted that the institutions – political, legal and cultural – that economic agents
(including entrepreneurs) operate in, directly influence their activity and hence economic
development (Baumol, 1990). The question of why the Ethnic Groups of North East India
continue to remain underdeveloped has been at the center of recent debates but they are mostly
centered around insurgency, government’s failures, physical and monetary factors, and other
economic factors. Entrepreneurship is something new or alien to these ethnic groups and its
issues are hardly studied at ethnic level, although entrepreneur is widely agreed as the prime
driver of economic progress and development (Busenitz et al. 2000; Kasper and Streit, 1998;
Leff, 1979). Ethnic economic development will depend more on entrepreneurial development
due to its subsistent nature of economy.
2 Why institutional environment?
The institutional environment is one of the important factors restraining or promoting
entrepreneurial activities and thus results in different intentions regarding new venture-creation
decisions (Brenner, 1987). Societies and cultures that value entrepreneurship tends to develop
environment which encourage or promote it (Vesper, 1983). Ethnic culture and the underlying
cultural values influence the structure and process of a person's cognition, making it an
antecedent of entrepreneurial cognition; hence entrepreneurial formations are the result of social
and cultural factors (Busenitz and Lau, 1996). Therefore, prospect of evolving entrepreneurship
in any society depends on its social institutional and attitudinal environment. A favorable attitude
of the society toward entrepreneurship and a widespread public support for entrepreneurial
activities will motivate and encourage people to start a new business. In fact, non-social factors
such as availability of loans, technical assistance, physical facilities, and information may be
equally important but the more fundamental forces such as family, the presence and effectiveness
of social networks, or attitudes supportive of entrepreneurship that bring entrepreneurship about,
receive virtually no serious attention from formal economic development programs; “[I]f
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International Journal of Advancements in Research & Technology, Volume 2, Issue 5, M ay-2013 398 ISSN 2278-7763 entrepreneurial development is to be more than a token collection of programs, it is imperative
that individuals sympathetic to entrepreneurial thinking be spread throughout community
structures and organizations, non-profits, for profits and government bodies” (Mokry, 1988, p.
114). There is a greater need for the development of conducive entrepreneurial environment in
ethnic groups because of the low level of entrepreneurial activities and several environmental
hostilities operating in these societies (El-Namaki, 1988). This is because "there is sufficient
evidence that environmental forces ranging from purely cultural and social currents to ingrained
government bureaucracy go quite a long way towards straining the driving force behind
entrepreneurs” (El-Namaki, 1988, p.101). There is also a wide agreement among the researchers
that the more conducive the business environment, the more likely it is that new businesses will
emerge and grow. Individuals are more likely to be encouraged to start a new business venture
when the social environment values entrepreneurship, opportunities are available, and
entrepreneurs have sufficient knowledge and skill to start and manage business (Fogel, 2001).
The recent historical and anthropological research has discovered that “man's economy”, as a
rule, is submerged in his social relationships. He values material goods only in so far as they
serve to safeguard his social standing, his social claims and his social assets. Neither the process
of production nor that of distribution is linked to specific economic interests attached to the
possession of goods; but every single step in that process is geared to a number of social interests
which eventually ensure that the required step is taken. Each society has different social interests
but in every society the economic system will be run on non-economic motives (Polyani, 1944).
Granovetter (1985) argues that human beings do not behave or decide as atoms outside a social
context, nor do they adhere slavishly to a script written for them by particular intersection of
social categories that they happen to occupy. But their economic actions are embedded in
concrete, ongoing system of social relations. Duygulu (2008) argues that cross-national
differences in entrepreneurship are best explained by a broader set of institutionalized
phenomena and peoples' attitudes. Mueller and Thomas (2001) theorized that national culture
was responsible for causing individuals to engage in behaviors that were not as prevalent as in
other cultures. Predictability of behavior in social interactions is achieved through a set of norms
or expected standards of behavior, reinforced by a system of rewards and sanctions to ensure
compliance, which over time become social institutions (Meyer and Rowan, 1977). Societal
norms and shared cognitive schemas affect the level of entrepreneurship within an economy
IJOART
International Journal of Advancements in Research & Technology, Volume 2, Issue 5, M ay-2013 399 ISSN 2278-7763 (Busenitz, et al. 2000). Pittaway and Cope (2007) contend that an individual’s entrepreneurial
intentions can be shaped by his/her perceptions of barriers to business startup, cultural values,
and the environment in which he/she is located. Lüthje and Franke (2003) see entrepreneurial
intentions as related to cultural values and shaped by perceived barriers to creation as well as the
infrastructure in place to support entrepreneurs. Papanek (1962) adds that a number of non-
economics factors are prerequisite for development of entrepreneurship, some of which are: at
least a very small proportion of the population accustomed to responding to market incentives,
and a value system and institutions that were not so hostile to entrepreneurial activity that only a
strongly deviant group would be prepared to undertake it. He further argues that a primitive
society with few market transactions have to go through fundamental changes in social
institutions before they could effectively response to market incentives. To shift from traditional
activities to industry requires strong incentives especially in societies where powerful economic
incentives are absent and social obstacles are great, industrial entrepreneurs may not develop in
substantial numbers unless either the social obstacles are reduced by changes in the society or a
deviant group is willing to surmount them for moderate economic rewards (Papanek, 1962).
Therefore, it is imperative to investigate into ethnic institutional and attitudinal environment for
lack of entrepreneurs and entrepreneurship among the ethnic groups. In the above-stated
background, this study attempts to identify and examine those social-cultural and attitudinal
elements of the Poumai Naga Ethnic group which inhibit them from seizing opportunities
available to them and successfully go through various self-employment activities or manage the
ongoing small retail businesses.
3 An introduction to the study area:
North-eastern region is a hilly-region isolated from the main-land India. This region is inhabited
by many ethnic groups having different cultures, traditions and histories. Poumai Naga is one of
the ethnic groups inhabiting the hilly northern part of Manipur and southern part of Nagaland.
They live in sixty revenue villages in Manipur with a population of 1.45 lakh and four villages in
Nagaland with a population of about 6.5 thousand (in 2003). Agriculture is their main source of
livelihood and employment. No literature is available about the socio-economic conditions of the
Poumai. Their social structure is based on village, and the economic unit is family. The village
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International Journal of Advancements in Research & Technology, Volume 2, Issue 5, M ay-2013 400 ISSN 2278-7763 consists of khels and functions much like an independent state. The village council comprising
representatives from each khel govern all the members of the village. The village structures are
geared primarily towards maintenance of traditional social cohesion and hardly any economic
function is found. Attachment to village is so strong that they still live in traditional villages on
the hill-tops (Pou, 2010).
Till date their main source of livelihoods and employment is subsistence agriculture. They follow
the traditional way of cultivation; jhuming and terrace/wet cultivation with traditional hand tools
and implements. Rice cultivation is done in terrace fields. Crops like corn, potato, bean, cabbage
and other vegetables are cultivated in jhum fields. Since cultivation is carried only for
subsistence, there is hardly any surplus for commercial purposes except a few quantities of
vegetables. The villagers are not used to commercial activity or buying and selling goods to
improve their economic condition (Pou, 2010).
4 Conceptual framework:
According to Busenitzet et al. (2000) entrepreneurial environment can be viewed from three
institutional perspectives. The regulatory dimension of the institutional profile consists of laws,
regulations, and government policies that provide support for new businesses, reduce the risks
for individuals starting a new company, and facilitate entrepreneurs' efforts to acquire resources.
Government policies encourage individuals to make their own investments by allowing new
firms to be legally incorporated with ease, or by protecting investors from the full extent of
investment risk. The normative dimension measures the degree to which a region's residents
admire entrepreneurial activity and value creative and innovative thinking. International
entrepreneurship researchers have argued that a country's culture, values, beliefs, and norms
affect the entrepreneurial orientation of its residents. The members of societies hold common
values about entrepreneurial activities themselves. In some value systems, entrepreneurs are
admired for their creativity and initiative but in others they are not. The cognitive dimension
consists of the knowledge and skills possessed by the people in a country pertaining to
establishing and operating a new business. Within ethnic groups particular issues and knowledge
sets become institutionalized, and certain information becomes a part of a shared social
knowledge. It indicates the axiomatic beliefs about the expected standards of behavior that are
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International Journal of Advancements in Research & Technology, Volume 2, Issue 5, M ay-2013 401 ISSN 2278-7763 specific to cultures, which are typically learned through social interactions by living or growing
up in a community or society (Manolova, et al. 2008). According to Scott (1995, pp. 33, 49)
institutions refer to rules, norms and cultural beliefs encompassing associated behavior.
Institutions consist of “cognitive, normative and regulative structures and activities that provide
stability and meaning in social behavior” and that “institutions are transported by various
carriers–cultures, structures, and routines–and they operate at multiple levels of jurisdiction”.
The importance of each dimension of the entrepreneurial environment varies across societies. All
the environmental factors are not equally important in all countries or at the same time. The role
of each environmental factor varies depending upon the specific aspect of the new venture
development process it intends to address (Gnyawali and Fogel, 1994). According to Licht and
Siegel (2006, p.3) “social institutions affect the way individuals perceive the social role of the
entrepreneur and how much individuals desire to become one and entrepreneurial behavior
responds to a rich set of cues from the social environment.”
An entrepreneurial environment is defined as a combination of factors that play a role in the
development of entrepreneurship (Gnyawali and Fogel, 1994). In the present study it refers to the
overall socio-cultural and attitudinal factors that influence people's willingness and ability to
grasp small business and self-employment opportunities available to the ethnic group. Here, an
entrepreneur means any self-employed person engaged in commercial activity like small
business, craft, carpentry, masonry, agricultural firm, animal husbandry, handicraft, and non-
traditional commercial activity. The social institutional environment among the Poumai Naga
Ethnic Group in relation to entrepreneurship – retailing, self-employment, and small businesses –
are examined using Busenitz et al. (2000), Fogel (2001) and Manolova et al. (2008) frameworks.
A researcher can observe entrepreneurial environment from different dimensions. However, in
this paper, keeping in line with the context of the ethnic group, the framework is arbitrarily
divided into five dimensions.
4.1 Societal attitude towards small businessmen, retailers and self-employment ventures
Entrepreneurship may not prosper in societies which harbor skeptical societal attitudes
toward entrepreneurship. A favorable attitude of the society toward entrepreneurship and a
widespread public support for entrepreneurial activities are both needed to motivate
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potential entrepreneurs to start a business (Gnyawali and Fogel, 1994). A society that
values and admires entrepreneurship, creative and innovative thinking tends to develop
societal systems to encourage it (Busenitz et al. 2000; Vesper, 1983). Shapero and Sokol
(1982) averred that a social system that places a high value on the formation of new
ventures, more individuals will choose that path and a social system that places a high
value on innovation, risk-taking, and independence is more likely to produce
entrepreneurial events than a system with contrasting values. Jackson and Rodkey (1994)
while choosing a career most people consider both the expected earnings and the social
approval and status that are attached to an occupation and society that sees entrepreneurial
activity as the engine which drives economy and values those who start new, successful
firms may be more likely to accord more respect, status, and influence to entrepreneurs
than a society that does not.
4. 2 Ethnic habits and basic entrepreneurial and business skills
The level of technical and business skills is a major factor in successfully starting and
developing a small business (Davidsson, 1991). The knowledge and skills possessed by
the people in a society pertaining to establishing and operating new business become
institutionalized, and certain information becomes a part of a shared social knowledge.
For instance, in some societies, knowledge about how to found a new business may be
widely dispersed. In other societies, individuals may lack the knowledge necessary to
understand even the most basic steps required to start and manage a new or small
business (Busenitz et al. 2000). Unless entrepreneurs have the basic business and
entrepreneurial skills like account keeping, saving, preparing simple business plan,
customer caring and networking they cannot run business successfully.
4.3 Societal support and encouragement for entrepreneurial activities
The local communities can play an important role in developing a conducive
entrepreneurial environment for potential entrepreneurs to start new businesses
(Gnyawali and Fogel, 1994; Mokry, 1988). For example, close relatives can help
entrepreneurs seek out solutions, locate resources, and assemble a team of willing people
to address the entrepreneur's problems (Kao, 1993). Therefore, especially at the initial
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stage, support and encouragement from the society especially from family and relatives is
necessary to motivate potential entrepreneurs to start a new business.
4.3 Village financial support system
To start a business or any new venture financial assistance is required. In developing
countries people cannot start a business due to lack of financial assistance (Gnyawali and
Fogel, 1994). Hence it is suggested that availability of financial resources at low cost in
the village level is a must in the start-up stage of small businesses like retailing or
peddling and self-employment activities.
4.5 Entrepreneurial role model and desire to change traditional behavior
In traditional society like Poumai Naga, commercial or business culture is something
alien, it is rather in the infant stage of evolution, therefore, it is suggested that
entrepreneurship may be developed when villagers have a desire to give up complacent
economic behavior along with imitation of and motivation by model entrepreneurs
(Manninget et al., 1989). The presence of successful entrepreneurs as role models in a
community or country conveys a message to the potential entrepreneurs that business is
an attractive career option. Conversely, negative public attitude towards entrepreneurs
coupled with the lack of role models may discourage people from going into business
(Gnyawali and Fogel, 1994).
5 Methodology:
The present study is based on primary data collected during September-October 2009 through a
survey of opinions, conducted on 221 respondents between 20 years to 60 years of age,
covering 22 traditional villages ranging from 5 to 15 respondents in each village (one person in
each household) according to the size of the village. With the researcher’s own knowledge
about the ethnic culture and practices through socialization as a member and interaction with
some knowledgeable members of the ethnic group and with the help of an expert the schedule is
framed to elicit information relating to societal support and recognition of entrepreneurs and
their activities, their attitude towards entrepreneurs and entrepreneurship, financial support
system at the village level, basic businesses skills and habits and willing to venture out of the
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International Journal of Advancements in Research & Technology, Volume 2, Issue 5, M ay-2013 404 ISSN 2278-7763 villages for small businesses. Five-point and two-point Likert scales are used to measure the
opinions of the villagers on various elements of the above mentioned five institutional
dimensions. Respondents are asked to indicate their degree of agreement or disagreement with
each statement on a five-point Likert scale, from strongly disagree to strongly agree ( strongly
disagree, disagree, neutral, agree and strongly agree), and two-point Likert scale with ‘yes’ or
‘no’ against each statement. Before administering to the respondents, the schedule was pilot-
tested on a small sample and minor revisions are made to improve its readability and format.
Some questions which turned out to be irrelevant for the study are also eliminated and only
relevant questions are statistically analyzed and presented in five tables below.
6 Findings:
Entrepreneurship in its usual economic sense is something unknown to the Poumai ethnic world.
As part time activity, a few people are engaged in shop-keeping, traditional art and craft,
peddling essential goods like cloths, agriculture tools and implements. Self-employment ventures
like agricultural firm, animal husbandry, educational institution, carpentry, and handicraft are
attempted by villagers but all turned out to be failure in every village. Not a single successfully
thriving self-employment venture is found in any village. Shop-keeping may be considered as
entrepreneurship in village level; many villagers imitate shop-keeping from outsiders but fail
after one or two years. In the survey of 22 traditional villages, a total of 32 regular shops are
found in 10 villages, 12 villages have 2 to 3 non-regular shops (which are not open/run through
the day and the year) each run by villagers. Out of 32 regular-shops 24 are being run by
outsiders/non-local and 10 shops by villagers which are 2 to 15 years old and remain stagnant,
i.e. no expansion in term of items in the shop. This indicates that villagers could seize only 25%
of the available market opportunity in the village. It is also found that the village market is
dominated by non-local shop-keepers and villagers take up this economic activity as part time or
do not take it as profession.
6.1 Societal attitude towards small business men, retailers and self-employment venture:
A society that admires and values entrepreneurs and entrepreneurship is bound to breed
entrepreneurs who in turn will help that society’s economic development. The attitude of 221
villagers towards small businessmen, retailers, self-employment ventures and government job in
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International Journal of Advancements in Research & Technology, Volume 2, Issue 5, M ay-2013 405 ISSN 2278-7763 their society are shown in Table-1. According to the data 37% strongly agree, and 26% agree that
‘the status of entrepreneurs and farmers are same’. Majority of the respondents (36% agree,
51% strongly agree) highly admire government employees and prefer government jobs to self-
employment and business. About 53% of the respondents strongly agreed and 33% agree that
‘those who cannot get government job take up self-employment activities, small businesses and
cultivation’. Nearly 63% of them treat carpenters and masons as daily wage earners. Their
society slightly looks down upon pity businessmen as indicated by responds on the statement
‘people who are engaged in pity businesses are look down upon’ where about 57% agree with it.
They have a notion that only poor people take up small entrepreneurial ventures, this amply
indicated by data where about 46% agree and 33% strongly agree the statement ‘in the village
normally poor people take up small businesses’ and about 49% agree and 23% strongly agree
that ‘poor people do pity businesses’. About 62% strongly agree that ‘unsuccessfully
businessmen are socially stigmatized’. It may be concluded that villagers prefer government
jobs to entrepreneurship – small business, self-employment ventures – and have a notion that
entrepreneurs are ordinary people who take up such economic activities because they are poor
and therefore, they are not regarded as the key agents of development. More over unsuccessful
entrepreneurs are stigmatized in the society.
Table 1: Societal attitude towards small business men, retailers and self-employment ventures
Sl. No.
Assertion or Denial of the Statement made in the Questionnaires
Distribution of Percentage Response in the Rating Scale 0 1 2 3 4
1 The status of entrepreneurs and farmers are same.
14.1 13.6 8.6 25.9 37.7
2 Government employees are highly admired in the village.
3.2 3.2 5.1 36.9 51.1
3 Government job is preferred to self- employment or business.
4.1 12.2 8.1 35.7 39.8
4 Those who cannot get government job take up self-employment activities, small businesses and cultivation.
2.7 4.5 5.9 33.5 53.4
5 Entrepreneurs are those who cannot get government jobs.
17.4 19.1 9.1 25.8 28.6
6 In the village carpentry and masonry works are 15.8 22.5 12.7 20.0 29.0
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treated as poor man’s professions. 7 Carpenters or masons are daily wage earners. 15.3 11.2 10.7 27.2 35.5 8 People who are engaged in pity businesses are
look down upon. 12.2 20.4 10.4 28.9 28.1
9 In the village normally poor people take up small businesses.
2.3 9.0 9.5 46.2 33.0
10 Poor people do pity businesses. 4.5 10.9 12.2 48.9 23.5 Rating scale: strongly disagree=0, disagree=1, neutral=2, agree=3, strongly agree=4 6.2 Ethnic habits and basic entrepreneurial and business skills:
In subsistent economy like Poumai, certain basic business skills like simple account keeping,
saving, customer dealing and ethnic habits will be the key to entrepreneurial development. The
respondents’ opinions on certain ethnic habits and basic entrepreneurial and business skills are
displayed in Table-2. The data indicates that about 75% respondents do not possess basic
business skill of shop-keeping. According to 76% of the respondents the local shop-keepers do
not treat customers well and therefore they prefer buying goods from non-local shops. About
71% say that they cannot sit in the shop the whole day, 85% feel uncomfortable to bargain with
Re. 1 or Rs 2, and about 80% find it shameful to do small businesses which involve Re 1 or Rs 2
as profit. About 84% of the respondents believed that generous people are respected and stingy
people are looked down upon. As many as 76% agree that ‘the more I earn the more I spend on
consumptions’, 75% say that they hardly save more even when they earn a little more than the
past. They (83%) do not maintain proper income and expenditure records and their saving habit
is poor (70%). Poor saving habit due social detestation of stinginess and spend-thrift behavior,
lacking of business skills, behavior of not recording income-expenditure accounts, inhibition of
doing small businesses due to shame (prestige) and lack of customer friendly attitude are found
in most of the villagers. In other words they are not accustomed to commercial activities.
Table 2: Entrepreneurial cognitions/basic entrepreneurial and business skills
Sl. No.
Assertion or Denial of the Statement made in the Questionnaires Response (%) No Yes
1 I do not take up shop-keeping due to lack of business skills. 24.3 75.7 2 I prefer buying from non-local shops because village shop-keepers don’t
treat customers well. 23.5 76.5
3 I cannot sit the whole day in the shop. 28.5 71.5
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International Journal of Advancements in Research & Technology, Volume 2, Issue 5, M ay-2013 407 ISSN 2278-7763 4 Re.1 or Rs.2 is necessary for running the shop but it will be shameful to
insist on it in the village. 14.9 85.1
5 When friends visit I have to offer them freely sometimes. 12.7 87.3 6 It is a shame to do small businesses which involves Re.1 or Rs 2. 19.9 80.1 7 My saving habit is poor. 29.6 70.4 8 I don’t maintain income and expenditure records. 16.3 83.7 9 I prefer business which involves heavy loss or gain to little gain or loss. 32.2 67.8 10 Generous people are respected in the society and stingy people are
looked down upon. 15.8 84.2
11 I hardly save more even when I earn a little more money than earlier. 24.4 75.6 12 The more I earn the more I spend on consumptions. 23.2 76.8
6.3 Societal/parental support and encouragement for entrepreneurial activities:
In Poumai society where there is no successfully entrepreneur as role model and
entrepreneurship is a new profession and where government employees are the only admired role
model, societal and parental support and encouragement to children for entrepreneurial ventures
is very vital to any entrepreneurial development. The data in Table-3 indicate that about 51%
strongly agree and 30% agree with the statement ‘my parents and elders never encouraged me to
take up entrepreneurship as profession’. About 61% strongly agree that ‘my parents and elders
advised me to study hard and get a government job’ it indicates that society strongly encourage
the young ones to struggle for government jobs. Only about 18% are willing to give monetary
support children’s business venture whereas about 60% are not willing to such support. As many
as 75% agree that ‘school children are encouraged to get government jobs but not for self-
employment ventures or business,’ and only about 16% disagree with it. Thus from this data one
can find that there is strong societal and parental support and encouragement to youth to take
government jobs but indifferent to entrepreneurial activities.
Table 3: Societal/parental support and encouragement for entrepreneurial activities Sl. No.
Assertion or Denial of the Statement made in the Questionnaires
Distribution of Percentage Response in the Rating Scale 0 1 2 3 4
1 My parents and elders advised me to study hard and get a government job.
2.3 4.5 8.6 23.1 61.5
2 My parents and elders never encourage me to take up entrepreneurship as profession.
10.0 8.1 14.5 30.8 36.7
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International Journal of Advancements in Research & Technology, Volume 2, Issue 5, M ay-2013 408 ISSN 2278-7763 3 Often parents and elders told me about the easy
life and riches of the government employees. 5.0 7.3 14.2 40.6 32.9
4 Often parents tell me, if you cannot get government job, you join army or farm in the field.
4.1 12.7 8.1 43.4 31.7
5 I will not borrow money or sell my property for my son’s or daughter’s business venture.
9.0 9.0 21.8 33.5 26.7
6 I/will struggle for my children education so that he/she may get government job.
2.0 8.8 8.3 27.9 52.9
7 Children are encouraged to get white collar jobs but not to get self-employment.
7.7 19.0 7.7 34.8 30.8
Rating scale: strongly disagree=0, disagree=1, neutral=2, agree=3, strongly agree=4
6.4 Village financial support system:
In the survey it is found that the prevailing rate of interest in the village is 5-10% per month and
very often compounded when loan is not repaid on agreed date. When loan is not repaid after the
grace period the money lender normally seizes the mortgaged security as per the agreement made
at the time of lending. The respondents’ opinions on financial support system within village level
are shown in Table-4. About 68% of the respondents feel that the village interest rate is too high
and about 54% strongly agree and 31% agree that ‘it is very risky to start a business with loans
from village’. About 70% feel that when they take loans for business from money lenders it only
enriches the lenders. About 75% of the respondents express that without a secured mortgage with
a value much higher than the amount of loan, it is difficult to get loan from money lenders. It
reflects that in the face of very high interest rate the villagers have a very high degree of fear to
avail loan from village money lenders for business purposes.
Table 4: Financial support system from within the village Sl. No.
Assertion or Denial of the Statement made in the Questionnaires
Distribution of Percentage Response in the Rating Scale 0 1 2 3 4
1 The prevailing interest rate is too high in the village.
8.1 9.0 14.5 23.1 45.2
2 When I borrow money for business from money lenders I only enrich the lenders.
2.3 15.4 11.3 23.5 47.5
3 It is too risky to borrow money from others and start business.
1.8 5.4 6.3 31.7 54.8
4 The prevailing rate of interest is about 5% to 1.8 5.9 7.2 25.8 59.3
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10% per month. 5 If the debt is not paid on agreed date, it is
compounded. 3.6 8.1 8.1 46.6 33.5
6 It is difficult to get loans from money lenders without mortgage/security
2.5 10.4 9.2 39.6 38.3
Rating scale: strongly disagree=0, disagree=1, neutral=2, agree=3, strongly agree=4 6.5 Availability of entrepreneurial role model and desire to change traditional behavior:
The respondents’ perceptions on availability of entrepreneurial role model in the village and the
degree of attachment to traditional economic behavior are shown in Table 4. About 39% strongly
agree and 36% agree that ‘all self-employment programmes/projects initiated in the village with
government support have failed,’ while 6% strongly disagree to it, and about 81% agree to lack
of entrepreneurial role model in the in the village. The data indicates not only lack of
entrepreneurial role model models but also negative examples of failed self-employment
ventures in the village. Failed businessmen who are ostracized in the village are rather looked
upon as example of businessmen. It is also found that majority of the respondents agree with the
following statement: (1) it is better to live happily than to struggle for more and more wealth;(2)
it is better to be contented with the little thing that we have than to struggle for more and more
wealth; (3) My fate lies in God’s hands (4) success and the wealth is the gift of God;(5) One
should be happy and satisfied with whatever God has given him or her;(6) I am happy with
whatever I have. Majority of the respondents express their desire to live in the village with
present means of livelihood to outside the village. Overall the respondents’ opinions indicate the
prevalence of strong negative examples of failed business ventures and businessmen, and very
high degree of conformity to traditional behaviour of contented and complacent life style.
Table 5: Willingness to adopt new ideas and technology, venture out of the village Sl. No
Assertion or Denial of the Statement made in the Questionnaires
Distribution of Percentage Response in the Rating Scale 0 1 2 3 4
1 I am happy with whatever I have. 5.9 10.4 5.9 36.2 41.6 2 One should be happy and satisfied with whatever
God has given him or her. 3.2 5.4 9.0 33.0 49.3
3 It is better to live happily than struggle for more and more wealth.
4.5 10.4 14.0 38.5 32.6
4 It is better to be contented with the little thing that we have than to struggle for more and more
5.0 12.7 11.8 45.7 24.9
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wealth. 5 God loves the poor more than the rich. 18.6 11.3 13.6 30.3 26.2 6 My fate lies in God’s hands. 5.9 9.0 10.9 29.9 44.3 7 If I am healthy, I don’t need to worry, I won’t die
of poverty. 16.3 10.0 8.1 36.7 29.0
8 Success and the wealth is the gift of God. 5.0 7.2 6.3 28.1 53.4 9 If I trust in God and seek His blessings God will
give me. 1.8 3.2 9.0 24.0 62.0
10 Money is the root of all evils. 3.6 8.1 7.2 36.2 44.8 11 I prefer living in the village with the prevailing
means of livelihood. 10.4 14.0 6.8 37.1 31.7
12 I prefer earning Rs 100 in the village to earning Rs 150 in other places/towns.
10.9 15.0 13.6 36.4 24.0
13 I prefer living with my dear ones in the village to living outside village.
9.5 15.8 12.2 41.2 21.3
Rating scale: strongly disagree=0, disagree=1, neutral=2, agree=3, strongly agree=4
7 Conclusion:
It appears from the analysis of data that to a certain degree institutional environment of the
Poumai Ethnic Group acts as impediment to entrepreneurial development. The over all
institutional environment indicates the following characteristic features; (1) complacent and
contented economic behavior, (2) lack of basic business skills, (3) indifferent social attitude
towards entrepreneurs and social stigmatization of unsuccessful businessmen,(4) lack of social
support to and encouragement for entrepreneurship, (5) very high cost village financing and (6)
lack of successful entrepreneurial role model in village.
To develop conducive entrepreneurial environment the following suggestions may be
recommended: (1) create awareness among the villagers on the scopes and prospects of
entrepreneurship and status of entrepreneurs vis-a-vis government employees in developed
societies, (2) physical exposure to successful small business ventures or agricultural firms, (3)
impart basic business skills of account keeping, saving, and networking with markets outside the
village, and (4) create awareness of the ways and means to avail low-cost financing. Such
entrepreneurship education programs will go a long way in developing abilities, knowledge,
skills, attitudes, and social and personal attributes for the entrepreneurial activity.
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Although the study is restricted to only Poumai Ethnic Group, the framework of analysis may be
used in other ethnic groups with certain modification according to the context of the study and
also the recommended suggestions may be equally useful to other ethnic groups in North-East
India.
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