Creating an Enabling Environment for

Women’s Economic Empowerment Through Entrepreneurship in India

Opportunities and challenges faced by women entrepreneurs in India

19 February 2013 Federation House, New Delhi

Overview

Research purpose and activities

Key Findings: opportunities and challenges

Recommendations

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Women Entrepreneurship- includes “Self Employment” and “Enterprise Creation” (traditional or non-traditional) in all stratas of our society (rural and urban).

Women Enterprise creation provides new employment and avenues for economic independence for women.

There is an increase in effort for enhancing the creation of Entrepreneurs. This development process now needs to include more women also.

The trends have slowly changed but in relation to the total population, women entrepreneurs still constitute less than 15%.

The National Mission for Empowerment of Women (NMEW) established 2010:

To strengthen the inter-sector convergence and

To coordinate women’s progress with the socio-economic development programmes across ministries and government departments

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To facilitate growth in women Entrepreneurship by providing enhanced access to service providers including Business Development Services and Financial Service Providers.

Review of existing situation of women entrepreneurs with regards to entrepreneurship in India.

Identify critical success factors, processes and issues that impact women entrepreneurship.

Findings that will contribute to understanding the process of enterprise creation by women and which could lead to a cascading effect

How to create enabling environment to help State and national-level stakeholders identify strategy to influence positive change for women to become entrepreneurs

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Research

Activities

Desk

Research

Survey Case

Study

•Data and literature review

• Secondary data analysis

• Focused discussions

Survey of 63

(out of 600)

women

entrepreneurs

(stratified

random

samples) from

14 states of

India

In-depth focused

interview of 6

women

entrepreneurs

Women owned

enterprises are 14%.

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Key Findings

The way they impinge Women Entrepreneurs

Women Specific

100% for women

Pro women 30% to women

Gender Neutral For men and women

Regulatory Policies

Promotional Policies

Credit Policies

Representational Policies

Further Classified

These institutions undertake a variety of activities:

Credit, Business skills training, Technical Training, Marketing services, Legal assistance

Institutions Classified

Revenue collection

Registration

Various laws and taxes

All Gender Neutral

Government sector

Few non-government sector

Promoting training & Technology

Gender Neutral & Specific

Main stream financial

institution

Few schemes for women

Community based organisations

Federation (women)

Woman associations

Chamber of commerce

Gender Neutral & specific

Representational Credit Promotional Regulatory

BDS & Policy institutions do not have any awareness building mechanisms.

The policies have shifted from welfare to development to empowerment approach.

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Major Findings: Policy & Programmes Support

No dearth of policies and credit schemes for MSMEs & others. But women entrepreneurship development is a marginal category with a scattered approach (food

processing, handloom, handicraft, cottage industries)

Awareness of existing program/credit schemes and support does not reach out to all (urban/rural)

MSMEs

Quality &

Coherence of

Government

Policies

Regulatory

& Legal

Framework Socio-Economic

and Cultural

Background

Structural

Changes of

National

Economy

Infrastructure &

Human Resource

Base

Degree of

Market

Development

Institutional

Framework

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A joint study by African Development Bank and ILO (2007) has identified a framework

of 10 key components of an enabling environment for women entrepreneurship. These

are :

1. Policy leadership and coordination

2. Legal and regulatory issues

3. Promotion of women as entrepreneurs

4. Access to enterprise education and training

5. Access to credit and financial services

6. Access to Business Development Services and business information

7. Access to women entrepreneurs' associations and networks

8. Access to business premises

9. Access to markets

10. Research on women entrepreneurs and their enterprises

Key findings:

Primary Survey

•Demographic Profiles

•Enterprise Profiles

•Enterprise Management,

Challenges and Peculiarities

a) Conception

b) Inception

c) Operation

between age

of 30-50

above 50

years

graduates married

have support

at home

had business

and leadership

training

without

specialized

training

had no

previous

business

experience

Demographic Profile

Sector-wise classification Manufacturing Service Trading

Food and Allied 4 3 -

Textile 10 - 2

IT and ICT service - 14 -

Chemicals and Cosmetics 3 - -

Electric goods 1 - -

Education and training - 4 -

Services (Medical and Tourism) - 3 -

Handicrafts (Metal, Marble, Jewellery) 8 - 1

Furniture 1 - 1

Consultancy (financial and others) - 3 -

Construction - 1 -

HR Solutions - 4 -

Total 27 32 4

Percentage 43% 51% 6%

Both the Manufacturing (43%) and Service

(51%) Sector are almost equally prefered.

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Men

Women

Trends: Men Vs Women

•Proprietorships in rural areas 95%

• Women created their own enterprises

• 6% inherited the business 94%

Turnover

Less than

10 Lacs

10 Lacs to

25 Lacs

25 Lacs to 2

Crores

5 Crores and

above

40% not responded

Have full time

employees

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Employment generated

83%

Have part time

employees

Have family support

43% 17%

Reasons for Business Start-up

41% started

business for

economic needs

46% start business to prove

to self and society

Majority (78%) sought support from family

8% from Business Mentors

5% from institutions/agencies

Conception

Inappropriate choice of machinery

Slippage in Implementation of Scheme

Poor Project Planning

Lack of Information for Procedural Formalities

Lack of Coordination and Lapses (because of family and social responsibility)

Combining work and family life

Limited network and industry contact

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Finance Arrangements

49% of women entrepreneurs used their own finance

45% of women entrepreneurs made external financial

arrangements (banks, Government schemes etc.)

In rural areas for women’s SHGs, banks provide 10 times

the loan of their savings for enterprise creation.

88% Credit accounts owned by men

(as on 31 March 2006)

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Challenges in Finance Arrangements

43% faced

Procedural

Problems

8% faced

Gender

Problems

Only 14%

availed

finance

information

from banks

50% availed

finance

information

from family

and friends

Challenges in credit procurement

Sources of credit information

Managing production, services and planning

Inadequate working capital

Marketing management and Development Efforts

Errors in Marketing Strategies

Poor Accounting, Costing & Record Keeping

Cultural perceptions & bias against women entrepreneurs

Inappropriate product

selection

Poor Technical Awareness

Absence of Market/Data

Analysis

Poor Investment Decisions

Low Equity Base

The cultural pull of traditional process of rigidly defined roles and its norms and expectations for women is very strong in India.

Competencies required for successful entrepreneurship are similar for both men and women: Need for achievement, independence, goal setting, self confidence and problem solving, etc.

Major problems Women face are classified as operational and socio-cultural. Maximum issues are found under the socio-cultural category.

Behind most successful women entrepreneurs there is strong family support.

Women in general are yet not aspiring towards entrepreneurial career.

BDS Support and cooperation, information about changes and relaxations in government policies, various schemes and grants for women entrepreneurs found missing

Many challenges and constraints for women entrepreneurs can not be addressed with one single intervention

The government sponsored development activities have benefited only a small section of women

The potential for developing Women Entrepreneurs is very high

Role of Government: Initiatives by government needs special focus for women for regulatory, promotional, credit and representational policies at national level

National policy implementation process should include : specialized promotion, proper execution and built-in monitoring strategy

Policies for women entrepreneurs need to change from piecemeal approach towards a comprehensive & integrated approach

Government Policies should also incorporate the interests of

women entrepreneurs – as also provide in timely manner, address gender concern, along with providing infrastructure facility, training, ensuring availability of credit for fixed assets and working capital

Need to periodically evaluate the impact of policies on success of women owned business

Marketing assistance and awareness Creation to participate in local, national international exhibition and trade fair to have a wider reach. Encouragement to collaborative marketing initiatives such as the pioneering Micro Marketers Galaxee™ cluster marketing services

FLO, civil society and government organizations to spread information about policies, plan and support

Role of Financial Support Providers

Commercial Banks lending for women entrepreneurs should be increased to 15% of total lending with more working capital assistance and interest subsidies

Easier terms for listing on SME exchanges in the case of women enterprises

Micro credit support system at local level should be made available

Initiate women’s cell in all branches of all National Banks to provide specialized assistance

Role of Business Development Service Providers (BDS)

Periodic awareness of regulations by publishing laws regarding women entrepreneurs in local languages too

Organised open forums of various regulatory departments (excise, license, registration , industrial schemes, tax department, directorate of Industries) should be held more frequently to create conducive environment

Network for women entrepreneurs should reach out to state/district level to represent rural small town

Media needs to be pro-active to facilitate mass awareness by publicising success stories of women entrepreneurs

Capacity building (need-based training in product selection, market and investment information in management and behavioural skills and competencies) should be offered at informal training at school, college, university and in civil society institutions

Constant handholding and operational guidance at the local level through incubation agencies and similar support systems such as FLO

Technical Skills and Vocational training by government and private institutions should combine business training also.

Awareness programs on women entrepreneurship be conducted on mass scale at village, district and state for all strata of women regularly

Develop various access channels for market and technology upgradation.