Creating Creating Creating Creating an Enabling Environment for an Enabling Environment for an Enabling Environment for an Enabling Environment for Women’s Economic Empowerment Women’s Economic Empowerment Women’s Economic Empowerment Women’s Economic Empowerment Through Entrepreneurship in IndiaThrough Entrepreneurship in IndiaThrough Entrepreneurship in IndiaThrough Entrepreneurship in India

Opportunities and challenges faced by women entrepreneurs in India

19 February 201319 February 201319 February 201319 February 2013Federation House, New DelhiFederation House, New DelhiFederation House, New DelhiFederation House, New Delhi

� Overview Overview Overview Overview

� Research purpose and activitiesResearch purpose and activitiesResearch purpose and activitiesResearch purpose and activities

� Key Findings: opportunities and challengesKey Findings: opportunities and challengesKey Findings: opportunities and challengesKey Findings: opportunities and challenges

� Recommendations Recommendations Recommendations Recommendations

3

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

�Women Enterprise creation provides new employment andavenues for economic independence for women.

� There is an increase in effort for enhancing the creation ofEntrepreneurs. This development process now needs toinclude more women also.

� The trends have slowly changed but in relation to the totalpopulation, women entrepreneurs still constitute less than15%.

� 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-economicdevelopment programmes across ministries andgovernment departments

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� To facilitate growth in women Entrepreneurship byproviding enhanced access to service providers includingBusiness Development Services and Financial ServiceProviders.

� Review of existing situation of women entrepreneurs withregards to entrepreneurship in India.

� Identify critical success factors, processes and issues thatimpact women entrepreneurship.

� Findings that will contribute to understanding the processof enterprise creation by women and which could lead to acascading effect

� How to create enabling environment to help State andnational-level stakeholders identify strategy to influencepositive change for women to become entrepreneurs

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Research Research Research Research

Activities Activities Activities Activities

Desk Desk Desk Desk

ResearchResearchResearchResearch

SurveyCase

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 FindingsKey FindingsKey FindingsKey FindingsKey FindingsKey FindingsKey FindingsKey Findings

The way they impinge Women Entrepreneurs

Women Women Women Women Specific Specific Specific Specific

100% for women

Pro women Pro women Pro women Pro women Pro women Pro women Pro women Pro women 30% towomen

Gender NeutralGender NeutralGender NeutralGender NeutralFor men and women

Regulatory Regulatory Regulatory Regulatory PoliciesPoliciesPoliciesPolicies

PromotionalPromotionalPromotionalPromotionalPolicies Policies Policies Policies

CreditCreditCreditCreditPolicies Policies Policies Policies

Representational Representational Representational Representational Policies Policies Policies Policies

Further ClassifiedFurther ClassifiedFurther ClassifiedFurther ClassifiedFurther ClassifiedFurther ClassifiedFurther ClassifiedFurther 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

RepresentationalCreditPromotional Regulatory

� BDS & Policy institutions do nothave any awareness buildingmechanisms.

� The policies have shifted fromwelfare to development toempowerment 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 amarginal category with a scattered approach (food

processing, handloom, handicraft, cottage industries)

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

MSMEs

Quality &

Coherence of

Government

Policies

Regulatory

& Legal

FrameworkSocio-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 areas95%

• Women created their own enterprises

• 6% inherited the business94%

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

20

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% 43% 43% 43% faced

Procedural

Problems

8% 8% 8% 8% faced

Gender

Problems

Only 14%14%14%14%

availed

finance

information

from banks

50% 50% 50% 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 definedroles and its norms and expectations for women is verystrong in India.

� Competencies required for successful entrepreneurship aresimilar for both men and women: Need for achievement,independence, goal setting, self confidence and problemsolving, etc.

� Major problems Women face are classified as operationaland socio-cultural. Maximum issues are found under thesocio-cultural category.

� Behind most successful women entrepreneurs there isstrong family support.

� Women in general are yet not aspiring towardsentrepreneurial career.

� BDS Support and cooperation, information aboutchanges and relaxations in government policies,various schemes and grants for women entrepreneursfound missing

� Many challenges and constraints for womenentrepreneurs can not be addressed with one singleintervention

� The government sponsored development activitieshave benefited only a small section of women

� TheTheTheThe potentialpotentialpotentialpotential forforforfor developingdevelopingdevelopingdeveloping WomenWomenWomenWomen EntrepreneursEntrepreneursEntrepreneursEntrepreneurs isisisisveryveryveryvery highhighhighhigh

Role of Government:Role of Government:Role of Government:Role of Government:� Initiatives by government needs special focus forwomen for regulatory, promotional, credit andrepresentational policies at national level

� National policy implementation process shouldinclude : specialized promotion, proper execution andbuilt-in monitoring strategy

� Policies for women entrepreneurs need to changefrom piecemeal approach towards a comprehensive &integrated approach

� Government Policies should also incorporate the interests of

women entrepreneurs – as also provide in timely manner, addressgender 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 ofwomen owned business

� Marketing assistance and awareness Creation to participate inlocal, national international exhibition and trade fair to have a widerreach.

�Encouragement to collaborative marketing initiatives such as thepioneering Micro Marketers Galaxee™ cluster marketing services

� FLO, civil society and government organizations to spreadinformation about policies, plan and support

Role of Financial Support ProvidersRole of Financial Support ProvidersRole of Financial Support ProvidersRole of Financial Support Providers

� Commercial Banks lending for women entrepreneursshould be increased to 15% of total lending with moreworking capital assistance and interest subsidies

� Easier terms for listing on SME exchanges in the caseof women enterprises

�Micro credit support system at local level should bemade available

�Initiate women’s cell in all branches of all NationalBanks to provide specialized assistance

RoleRoleRoleRole ofofofof BusinessBusinessBusinessBusiness DevelopmentDevelopmentDevelopmentDevelopment ServiceServiceServiceService ProvidersProvidersProvidersProviders (BDS)(BDS)(BDS)(BDS)

� Periodic awareness of regulations by publishinglaws regarding women entrepreneurs in locallanguages too

� Organised open forums of various regulatorydepartments (excise, license, registration ,industrial schemes, tax department, directorate ofIndustries) should be held more frequently tocreate conducive environment

� Network for women entrepreneurs should reachout to state/district level to represent rural smalltown

� Media needs to be pro-active to facilitate mass awareness by publicisingsuccess stories of women entrepreneurs

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

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

� Technical Skills and Vocational training by government and privateinstitutions should combine business training also.

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

� Develop various access channels for market and technology upgradation.