CHAPTER 8

FACTORS INFLUENCING ENTREPRENEURSHIP DEVELOPMENT

AMONG WOMEN ENTREPRENEURS (RESPONDENTS)

The barriers for women to become: successful entrepreneurs are tormidable

especially for those involved in micro entcrprises. Their experiences arc different tl'om those

of tHell in initiating and operating business activities. As Taylor (1980: 16) summed up the

situation, "Women are no diflerent than men ill their entrepreneurial drive and their desire

for economic independence and personal selt~fLllfillment that business ownership can bring.

However, there is a catch. It tends to be more difficult for women than tor mell to live out

this drive." McNamara (1979), Hisrich and O'Brien (1981, 1982) and Kent (1982), among

others, suggest that venturing into entrepreneurship is a greater problem for women because

of specific socio-cultural, knowledge and financial barriers conti'onted by them.

By und lurge, cx.istitlg and potential women entrepreneurs ti"om the low-income

group face' the same problems as those commonly faced by all entrepreneurs, such as a lack

of capitul, and insullicicnt ei\tr~prclleurial, managerial and technical training ancl experience.

However, these problems m'e exacerbated by udditional factors that have a negative impact

especially· on women ti'0111 the low-income gro up. These include: under-estimation of their

economic roles, gender-role stereotyping, lack. of confidence in their entrepreneurial and

managerial capabilities, limited access to vocational training, particularly jor "non­

traditional", high-productivity business activities, untavourable attitudes and perceptions of

bank personncl of the types of businesses owned by women, limited access to information

networks and obtaining credit, economic and technological factors that relegate women to

low productivity businesses, and institutional barriers limiting acccss to support services

provided by assistance prognunmes.

This chapter deals with the various fadors that contribute to, or inhibit the

development of entrepreneurship among womell ii'om the low-income group.

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8-1 Factors Contributing to Elltreprcncunhip Dcvelopment among Respondents

In the prescnt study, ten factors were identified as factors that conhibute to

entreprmeurship among women from the low-income group. The list of factors was

tinalised aller a detailed review of literature. These factors were statistically analysed using

factor analysis by the principal wlllponcnt method. Normalised varimux rotations were

computed for each factor (Table 8.1). Factor analysis was done to End the answer to another

research question" What are the factors that contribute to entrepreneurship developmcnt

among women?"

Table 8.1

Factors lll1d the Corresponding Itellls with .Factor Loadings

Fll\:tor Factors Items F:lctors No. Loadings

I Competence in I. Hard work/Perseverance 0.82 Managing Business 2. A v ailability of resources 0.74

3. Product quality 0.66 2 Accessibility to 4. Ad equate information 0.82

Information anc1 knowledge 5. Future Planning 0.71

3 Support System , 6. Spouse IFamily support 0.76 7. Training 0.75

4 Guidance and Follow 8. Regular follow-up by 0.87 up the org<misation

5 Business Credibility 9. Timely availability 0 f 0.84 loal1

10. Management IMarketing 0.59 skills

Factor analysis helps to group the items under one factor. From the above table it

can be seen that hard work allli perscverance, product lJuality and availabil ity of resources

have a higher factor loading in factorl than in the other factors and so have been put under

the factor Competence in lvLinaging Business. A Similar procedure grouped the other items

under the tour factors other factors. Thus, tile factors contributing to entrepreneurship

development among respondents were competence in managing business, accessibility to

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information, support systems, guidance and follow-up, and business credibility. Factor!

contributes the maximum variance of 20.67 percent, followed by factor 2 which contributed

to 15.16 perccnt of the variance; factor 3 contributed to 11.45 percent of the variance, while

factor 4 explained another 10.63 percent of the variance and factor 5 contributed 9.72

.percent of the variance. The tot,!-l cumulative variance explained by the five factors was 68

percent. After thc factors were identi fied focus group discussions were held with various

groups ofrespondents to gather in-depth information on each factor.

l:!-l.l. Competellce inlVl:III:1ging llnsillcss

The components under this factor are' hard workiperseverallce, quality of the product

and availability ofresources. About 98 percent of the respondents considered hard work and

perseveraJlce ~lS important and contributing to entrepreneurship development, that is, to

initiate and sustain a business. The respondellts stressed that without hard work they would

not be able to cope effectively with the busy schedules of business. As women, re~pondel1ts

had Ii greater burden to bellr, as ill Ildditioll to the business, they also JlIld to manage

household work. Moreover, as women, they had to work hardcr in a male-dominated

soci.ety, especially when they were setting up their businesses. The respondents added that

. the ability to endure lind not get disheartened by failures was important to sustain their

businesses.

The dataJurther revealed that 94 percent of the respondents considered aV:lilability

of resources likc raw materials, place, and inthlstructUl'C nccessary for the enhancement of

entrepreneurship. They said that the failure of many businesses was due to the inadequacy

to supply raw materials. Those in the manufacturing sector added that raw material should

be made <lyailable to women on a priority basis. A subsidy for the products manufactured

by respondents would be helpful. A majority (91 %) of fhe respondents sttessed upon the

importance of maintaining product quality for the sustenance of micro businesses. They

remarked that as their c1ientcle was small they had to be extra cautious in maintaining the

quality of their products.

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8-1.2 Accessibility to Informatiull

The cQmponents under this factor were access to adequate information and

knowledge, and future planning. About 73 percent of the respondents perceived that

accessibility to information with regard to selection of product or activity was important lor

development of entrepreneurship among women. Accessibility to information and

knowledge could help them to select and buy. proper tools and equipment to improve their

products for growth and diversification of their businesses. They stated that tile NGOs could

playa more proactive role in helping them to identify profitable business opportunities.

Irrational selection of product or activity created problems for many of them and could eVen

lead to the collapse of their business. The data further show that 90 percent 0 f the

respondents found that business planning was also an important component that enhanced

entrepreneurship. It enabled them to make important decisions, and facilitated the process of

tackling competition and taking appropriate actions for business growth. The process of

plmll1ing enabled them to bear risks, which was beneficial for the overaH growth of their

businesses. Some of the respondents added that planning helped them to avoid problems to

a great extent, establish priorities, and save and spend money 1110re eHieientiy.

8-1.3 Support Systems

The components under the third factor were spouse and family support and training.

The roles played by the spouse and family members were considered important in micro

enterprise development by 76 percent of the respondents. Tirey l'eported that they had to

maintain a tine balance between home and business, and support provided by their husbands

and family members helped them to maintain the balance. The family played a major role in

motivating, helping and sustaining the business, according to the respondents. [n other

words, a resourceful family facilitated enu·epreneurship

Training was instrumental in enhancing the capabilities of respondents in their

entrepreneurial activities. The respondents reported that training and skill development were

essential 'tor entrepreneurship development along with support fi'om sp~lIse lind fllmily.

Most of the respondents (82%) said that training had made them more confident, helped

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them to establish networks and enabled them to access the right sources tor intonnation

related tei their business. They added that training-cum-orientation programmes should be

organised 'on a regular basis to enhance their entrepreneurial qualities. Majority of them

suggested that since they were weak in business and technical skills, EDP training should be

organised not only to strengthen these, but al so to create awareness among entrepreneLU's

about the importance 0 f formal organised traini ng.

8-1.4 G uidallce lllld Follow-up

This factor constitutes regular tallow up by organisations providing support to

women entrepreneurs. Follow-up provided the respondents with necessary information and

. knowledg7 and created awareness with regurd to entrepreneurship. 76 percent of the

respondents reported that receiving guidance and follow-up regularly, enabled them to deal

with problems immediately, which gave them confidence and sustained their motivation,

They further added that lack of follow-up demotivated them, as they did not have

professional help available during the time 01' need. Thus, guidance and follow-up were

necessary for the sustenance ,Uld growth of entrepreneurial endeavors among respondents.

8-1.5 Business Credibility.

This factor constitutes two components;: timely availability of loan, and managerial

and marketing skills, Almost all the respondents (93%) reported that availability of credit

was a crucial factor in enhancing business credibility. The respondents shared that though

credit was available, it was not adequate, and stressed that organisations should consider

increasing the credit amount as it would help in attracting more women to entrepreneurship.

They further added that the various institutions providing credit to women entrepreneurs

must be sympathetic and understanding in their dealings, and credit should be provided to

them on a priority basis on cOllcessional terms. The respondents emphatically stressed that

the attitude of bankers needed to change so that credit was available easily. They further

streddcd that they were cfticicnt and honest in their dealings and they could repay the money

borrowed irrespective of their socio-economic background.

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8-2.1. Entrepreneurial Constraints

The respondents have identified five major entrepreneurial constraints faced by them (Table

8.2).

Table 8.2

Entrcpreneurial Constraints at the Sblrt of Ellterpl'ise

81. no Cons tmints Frc<llIcncy Perccntage

I Lack of finance 120 96

2 Lack of knowledge about various institutions 93 74.4 and gov!. programme

3 Excessive burden of work and respOllsibility 93 60.8

4 Lack of technical knowledge 23 18.4

5 Lack of confidence 13 10.4

The data in Table 8.2 show that 96 percent of the respondents reported that they had

hlced financial conslraints whereas 74 percent of the respondents suffered hom lack of

knowledge about various institutions and the kind of support they extend in starting a

business. These constraints, according to the ('espondents, restricted their ability to select

ventures which were prolitable. They added that irrational selection of products created

problems for them and had led to the collapse ofthe business enterprises tor some ofthem.

Excessive burden of work and responsibility was the third 1110st important constraint

reported by 61 per cent of the respondents, as they had to look aller their homes and

enterprises simultaneoLlsly since traditionally, women are supposed to assume the

responsibility of looking atter the family. Tilus married women could not devote their

attention full-time to business activities on account of conventional family responsibilities.

(nspite of the help received fi'0ll1 spouses and other family members at variolls stages of

enterprise building the main responsibility of taking care ofthe family was still on them, and

thus it bccillue difficult for them to manage boUt ends.

Lack of awaretless with regard to technology was reported by 18 percent of the

respolllkllts and 10 percent reported Jack of contidenee to venture into business since they

were apprehensive aboLlt taking risks and challenges to start business. Further the

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respondents who had ventured into the manufacturing sector shared that little or no

knowledge discouraged them to take up manllfacturing activities, since they did not know

what tools and equipment to buy to start a manufacturing unit, and so opted for enterprises

in either the service or trading sectol".

8-2.2 General Constraints

General constraints basically deal with the personal characteristics, qualities and

capabilities as entrepreneurs. Women who were operating, or were in the process of setting

up a micro enterprise, very oHcn had to combinc entreprenellrial responsibilities with

domestic chores. While women are equally business-minded compared to men, they have

. ditferent roles and obligations to playas well. These roles and obligations at times cause

hindrance in their entrepreneurial endeavour (Singh 1992). Table 8.3 lists various general

constraints encountered by respondents while running their enterprises.

Table: 8.3 General Constraints faced by Respondents

SI. Constraints Mean score Rank No

I Excessive tensions and challenges [,71 l

2 , Inadequate credit orientation 1.57 2

3 Lack ofleisure time and others activities 1.55 3

4 Incompetent in bandling technical, tLnancial, sale, 1.51 4

. production and other managerial acti vities

5 Health problems 1.28 5

6 Poor risk-taking ability 1.21 6

The data revealed that the 1110St common constraint faced by majority of the

respondents (71 %) was excessi ve mental tension, as they had to tight against all odcls to set

up their businesses. They ·opined that the causes of their tensions lay in the socio-cultural

roles prescribed {or them as women. Around 58 percent of (he respondents expressed

inadequate credit orientation as the second maj or constraint. Limited level of education and

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lack of information also undermined their ab ility to deal with the lengthy and complex

processes a f financial insti tutions. The respondents also reported that they lacked the

requisite business skills required to put forward business proposHls. As H result, they otten

resorted to borrowing from moneylenders who charged higher rates of interest from them

than ii'om men. Thus, womenlllade up only a small proportion oUhe clients of most credit

schemes in the governmental sectors. More than half the respondents (55%) added that they

had to juggle for some leisure time, as they were always busy with either household or

business work and this also caused certain hin.drances. They revealed that marketing had

become very complex and needed considerable expeliise. Smaller businesses had to face

compctitio!l t1'om the larger iinus for which they needed to develop competence. They

added that all this could be developed through t raining and constant business guidance hom

organisations. A few (3%) respondents expressed that they had certain health problems and

were apprehensive in taking risks in business, which again were constraining factors.

8-2.3 Socia-Psychological Constraints

The socia-psychological constraints discourage women to enter into business as this

IS often considered a non-traditional' secto r for them. Various socio-psychological

constraints iilced by respondents are presented in Table S.4.

Ta ble 8.4

Socio -Psychological Con:strllints faced by Respondents

SI. No Constraints Mean score Rank .

I Lack of confidence in women's ability 1.79 1

2 Male dominance 1.76 .2

3 Lack of social contacts 1.31 3

4 No appreciation for taking indepcndent decisions 1.28 4

5 Lack of motivation from family and so-ciety 1.12 5

6 Lack of appreciation and recognition in the tiullily 1.08 6

7 . Lack of self motivation 1.0S· G

8 Cont1ict due to dual responsibilities 1.06 7

9 NOll-cooperative attitude of husband and family members 1.05 8

10 Behaviour not according to social norm 1.01 9

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Table 8A shows lhat the lack of contid.ence from tinnily members or society in the

ability of women acted as the first major constraint encountered by the respondents. This

lack of confidence hindered their access to larger loans due to their inability to provide

tlUlgiblc security. The respondents shared that male members thought it was a big risk

tinancing. ventures rLltI by women, and that they sutlered male chauvinism in accessing

credit and marketing. Financial institutions and banks otten took a negative attitude while

providing tinance for respondents. They discouraged the respondents to venture into

entrepreneurship, as they believed that women in general are not good at doing business and

so the respondents had to cope with hostile and unsympathetic attitudes of bank officials.

One of the respondents' shared that, " The bank manager was almost open-mouthed wh.en I

went to see him. And remarked' I don't believe this. A woman starting off in business'."

Another r~sponclent said that the bank manager was always trying to demotivatc her by

saying "Why do you want to go through all the trouble of procuring a loan? Aren't you

better otI staying at home?" Yet another mentioned that "The bank kept asking for a lot of

documents and it took very long to process the loan." Faced with patronizing attitudes and

non-cooperation, many respondents were compelled to take men along with them to

negotiate credit and act as financial guarantors, or to abandon their loan request altogether.

The respondents also experienced problems while travel.ing to manage their business

activities. They faced unsafe conditions while travelling alone during the late hours and had

to rely on the services of their spouses or other male members in tile family, or male

relatives. Lack of social contacts was ranked third by the respondents implying low

networking among respondents to gather information about various aspects related to the

growth and development of their businesses. The respondents ranked "no appreciation from

family" to take independent decisions as the fourth constraint resulting in lack of enthusiasm

in business activities and low morale. Some of the respondents shared that their spollses.

were not earning and did not like the idea of their wives earning tor the family. Such

spouses imposed various hindrances, like tixing a time for the respondents to return home,

which caused a lot of damage to their businesses. They also placed considcrable burden on

the tespondcllts by asking money for gambling and drinking, refusal of which resulted in

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emotional and physical abuse. Thus, in SUlllmed, the socio-psychological constraints put a

lot of pressure on respondents and hindered their growth as entrepreneurs.

8-2.4 Resource Constraints

As mentioned in the preceding sections, women respondents faced cxtensi ve socio­

psychological constraints. Resource constraints have been broadly categorised into two

categories: knowledge resource constraint and technical resource constraints. Knowledge

resource constraints werc the constraints perceived by respondents due to lack of

. knowledge/information about agencies working tor women entrepreneurs, government

schenies, legal laws, loaning schemes etc (Table 8.5). Technical resource constraints havc

been discussed only with regard to respondellts venturing into the manufacturing sector

(Table 8.6).

Table 8.5

Knowledge Resource Constraints

SI.No Constraints Mean score Rank I Lack of knowledge !information <tbout agencies and

1.92 I institutions working lor women entrepreneurs

2 Lack of information about merits and demerits of ,

different entel1)["ises 1.86 2

3 Loaning schemes and procedures of government and 1.76 . 3 financial institutions

4 Lack ofknowlec1ge about legal hlws 1.48 4

The data in Table 8.5 show that respondents ranked lack of awareness about variuus

agencies and institutions working for womet\ entrepreneurs as the tirst major constraint

followed by lack of intonnation about the merits and demerits of different enterprises as

viable options tor them to start ,m enterprise. The respondents reported that even well­

intentioned urganisations amI institutions that IJrovide assistance or services to entrepreneurs

had limited outreach, lack of cooperation or c~ordinatiOil among themselves in promoting

micro enterprise development, lack of a clear detinitiol1 of target groups, absence of

protessional wumen among extension service staif, and lack 0 r measures facilitating

women's access to material work and financial resources. All this hindered the entry and . ,

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development of women in micro enterprises. The respondents ranked lack of knowledge

about various schemes of government and tirrancial institutions for availing loans as the

third major hindrance. This was because most of the entrepreneurship development

programmes and schemes were not initially designed to take into account the needs and the

situations of women micro entrepreneurs. It may be argued that 1110st of the programmes

are, in principle, open to botll male and female entrepreneurs since thcy did not intentionally

exclude access to the latter. BLit it was found in the study that respondents faced "access"

problems. Therefore, unless sLich access is improved by taking specific measures to cater to

the needs of the respondents, this constraint will continuc to rcmain a barrier for

entreprerreurship development among them. Moreover, programmes catering to

cntrepreneurship development often fail to take into account women's education level, skill

level and their accessibility into the area of entrepreneurship development. The data further

show that lack of legal knowledge and information about running a business also hindered

their growth as entrepreneurs. The respondents revealed that legal aspects were involved at

each step of their business development like dealing with municipal authorities, police, and

at times the local traders' associations, and access to some legal knowledge would build up

their confidence und help them survive in the male-dominated arena of entrepreneurship.

Under technical constraints, the respondents ranked lack 0 f technical. knowledge

about· various improved technologies in their area of business as the main constraint in

running a manufacturing unit Crable 8.6).

Table 8.6

Technical Cunstraints

81. No Constraints Mean scol'e Rank

I Lack of technical knowledge about vari ous improved 1.16 I

technologies 2 Lack of specified skills to work Oll spcc.itic skilled 1.08 2

business 3 Availability ofillachinery and eqllipment 1.08 2

4 Non-availability of modern leclUlologi~ 1.04 3

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The respondents engaged in manufactllring leather and synthetic bags, shoes, toys

and bakery items reported that the training they received was not helpful in upgrading their

skills, hindering their ability to adopt newer technologies to improve their products. The

other constraining factor was lack of infonnation and knowledge to buy the right

equipments.

8-2.5 Financial Constraints

Another important research question was " Is availability of credit a major

constraining factor among women entrepreneurs ii'om the low-income group?" The

respondents reported that their access to a critical resource like finance had an impact on the

growth and development of their business activi ties (TableS.?).

Table 8'.7

Fimmcilll COllstl'aints

Sl. NQ Constraints Mean score Rank

I Need for finance 1.95 I

2 Limited working capital 1.89 2

3 Inadequatcllmount advanced through 1.83 3 financing agencies

4 Lack of economic credibility of women 1.79 4

The initiative and enthusiasm of respondents was curbed due to tinancial constraints,

since the respomlents had. no property or savillgs of their own to raise finance by offering

them as security. Banks dislikcd financing the respondcnts based on their socio-economic

background and the presumption that women could not succecd in business ventures. Tl1Us

unless women entreprcneul'es were equipped with adequate tinancial resources, they could

not be successful in their business activities even if they were otherwise well equipped.

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8-3 Women Entrepreneurship: Scope of Advancement

Keeping the findings of the present chapter in perspective, relevant suggestions have

been made in this section to overcome the constraints and enhance the scope for

entrepreneurship developme[Jt among women.

For promoting entrepreneurship among respondents, ngorolls etlorts have to be

made to formulate and launch special entrepreneurial development programmes. These

programmes should be developed keeping in view the low profile of women in society. The

approach should be adopted based on the client group. For the respondents, this could be

achieved through mass media, mahila mandals/self-help groups, and through training

organised by various organizations, both govenunent and non-goverrunent.

The data have also shown that self-confidence, leadership, and independence play

significant roles in the entrepreneurial career of respondents, in addition to support ii-om . . spouses and other family members. Thus the important component of all entrepreneurial

development trainingprogrmnmes should be to enhance these entrepreneurial traits.

Furthermore, while there exists a network of non-government and government

organisations and institutions working for women entrepreneurs, there is a lack of linkages

between these agencies. Morcover, women are unaware of these agencies and are unable to

make use oftheir services due to poor linkages. Accordingly, there should be better linkages

among various organisations and institutions working for the cause of women entrepreneurs

to achieve their targets and objectives etliciently. Linkages within agencies also need to be

reviewed to a void clashes and overlapping of objectives, so as to enhance efficiency and

hence would prove enicient and cover a large number of clients. Based 011 the tindings of

this study, organisations especially grassroot level non-government organizations, should

approach entrepreneurship with a professional outlook by focusing on it as all alternative

lorm of elhploymenl to tackie the existing under-employment and unemployment problem

among womcn ii'om the low-i.ncome group.

It is essential that c110rts be made to understand the distinction between

entrepreneurship, income-generation and self-employment by NGOs and Gas. As tools of

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cmployment they havc certain comlllon features, but sclt~elllploYlllent is a full-time

occupation which mayor may not be for oneselt: and may not involve the entire range of

activities from mobilising, organising resource:>, and the production process and marketing

as in entrepreneurship, while income generation is oUen a casual activity to supplement the

income. On the other hand, entrepreneurs are income generators and self-employed. They

have to bear the entire burden of mobilising, organising resources, and the production

process and marketing. Moreover, linkages at state and national level for generating

information, technological development and research institutions need considerable

strengthening for increasing the entrepreneurial performance.

The tlndings further reveal entrepreneurial and other constraints atTecting the

emergence of entrepreneurs and their pertormance. Effective steps are thus needed to

mitigate these constraints. Since women entrepreneurs arc victims of the existing social

systems, attitudes and prejudices, they oilen find it dimcul! to interact and discuss

professional issues as equals, more so if they are illiterate or not much educated: Thus

awareness has to be created among women about various legislations so that they benetlt

from them.

Finance is the sine-qua-non for any enteIprise. Yet this was reported to be olle orthe

mam constraints coming in the way of respondents. The banking system was not

suHiciently responsive to social bunking needs and has obvioLlsly not been able to deal with

barriers that hinder women ii'olll taking advalltage of schemes or getting access to credit.

Therdore, to improve access, special arrangements must be made tor the availability of

credit tor women in the low-income group in view of their growing needs. The banks and

tinancial institutions should have special counters for women to help them till loan forms

and other formalities which have to be fulfilled. Special stress should be placed on

institutional credit mechanisms at different rates of interest for women in the low-income

unorganised sector. Women's co-operative ballks and women development banks should be

created at state and central level.

Marketing torms the crux of a business and it is imporlant tbat before propagating

the activity, the provision ot' a growing market should be made. An integr(lted approach

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should be formulated where women entrepreneurs are not only provided credit but assured

of adoption of appropriate technology, supportive services of supply and marketing, and

appropriate infj'astructure facilities. This could ensure that women not only venture into a

small vegetable or tlower shop but also turn i.t into something more lucrative like being

wholesale dealers or supplying to hotels and restaurants.

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