problems of women entrepreneurship in micro, small
TRANSCRIPT
PROBLEMS OF WOMEN ENTREPRENEURSHIP IN MICRO, SMALL
& MEDIUM ENTERPRISES IN INDIA: AN ANALYSIS
Kousik Dari Assistant professor, Department of Commerce, Nabagram Hiralal Paul College, University of Calcutta, West
Bengal, India
Abstract
Micro, Small and Medium Enterprises (MSMEs) play a vital role for the growth of Indian economy
by contributing 50% of industrial output, 40% of exports, employing 120 million people in India,
create 11.10 crores jobs every year and produce more than 8000 quality products for the Indian and
international markets. But in the globalised world, Women owners are playing a vital role and they
have become an integral part of the global quest for the sustained economic development and social
progress. Entrepreneurship among Women is relatively recent phenomenon. Women
Entrepreneurship is gaining importance in India. In the India, more and more Women are taking up
entrepreneurial activity especially in (MSMEs).Women owners captured 13.72% of MSME sector as
a whole and the percentage distribution of enterprises in Micro (14.19), in small (5.06) and Medium
(4.21) both are in rural and urban areas. At the same time Women entrepreneurs are facing problems
like shortage of finance, marketing, stiff competition etc. For the said problems government of India
takes necessary steps to remove it by way of giving training programmes, make aware of the
schemes and plans of government, making provision of micro credit and providing special relief
announced by the Govt. of India in first tranche of economic package on May 13, 2020 during
COVID 19 etc. This paper primarily focuses on the problems faced by Women entrepreneurs in the
business environment.
Keywords: Entrepreneurship, MSMEs, Women Ownership;
JEL Classification: L26, G21, P31;
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1. Introduction:
MSMEs are complementary to large industries as ancillary units and this sector contributes
enormously to the socio-economic development of the country. There is a consistent and continuous
growth of MSMEs in our country. MSMEs have increased from about 80,000 units in the 1940s to
more than 633.88 lakhs units till 2019-20.The MSMEs produce more than 7,500 products and the
MSME sector contributes to 45% of India‟s total Industrial Employment, 50% of India‟s total
Exports and 95% of all industrial units of the country.
MSME in India has the potential to increase the share of contribution to GDP from the current 8% to
about 15% by the year 2020. The MSME sector in India is highly heterogeneous in terms of the size
of the enterprises, variety of products and services produced and the levels of technology employed.
As per the estimates of 4th
All-India Census of MSMEs (2006-07), the number of enterprises is
estimated to be about 26 million and provide employment to an estimated 60 million persons. Of the
26 million MSMEs, only 1.5 million are in the registered segment while the remaining 24.5 million
(94%) are in the unregistered segment. The sector is dominated by micro units, of the total working
enterprises, the proportion of micro, small and medium enterprises were 95.05%, 4.74% and 0.21%
respectively.
According to final report of MSME fourth All India Census, MSME is an important sector and plays
a critical role and has an important place in the Indian economy, in terms of employment Generation,
exports and economic empowerment. For the year 2011-12, total number of enterprises in the MSME
sector is 261.12 lakh of which 15.64 lakh are registered. 14.85 lakh enterprises are registered in the
micro sector, 0.76 lakh in the small scale sector and 0.03 lakh in the medium sector. Out of total,
28.60% enterprises belong to the manufacturing sector and 71.40% belong to the services and repairs
and maintenance. It provides employment to 1109.09 lakh persons in the country. The sector has
registered gross output of Rs.7,07,57 crore. Total number of exporting units from the country was
49.81% in the year 2019-20 (till December 2019) as per the data from Directorate General of
Commercial Intelligence & Statistics (DGCI&S) .
Entrepreneurship among Women is relatively recent phenomenon. In modern India, more and more
Women are taking up entrepreneurial activity especially in Micro, Small and Medium enterprises
(MSMEs). The Women MSMEs sector in India has a pivotal role to play in the socio-economic
development of the country. Women in India constitute about 50 percent of the country‟s population.
Hence, Women are regarded as the „better half of the society‟. In earlier days, While Women
entrepreneurs create new jobs for themselves and also for others they faced several types of problems
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like shortage of finance, marketing problem, scarcity of raw materials, high competition in market,
family conflicts, lack of education, low risk bearing ability, male dominated society, little bit
knowledge of business administration, socio cultural barriers, exposed to the training programs and
lack of confidence in their strength and competence etc.
2. Review of Literature:
Alit Sen Guptha (2012) says that the paper tries to focus on the Women entrepreneur development
prospects. The survey and the study brought to light the capacity of the Women who came forward
with the ability to use the unutilized resource. The sample survey of the various districts clarifies that
though immense prospect prevail and the zeal of the Women to start something new has been
crushed down with the ongoing problem prevailing in the area. The objective of the study was to
explore the hidden prospect of Women Entrepreneurship and to find technique to up lift anxiety for
leadership in Women while tracking to reach the expected objective the methodology so adopted was
a sample convenient method for various districts.
Bharathi & Reddy (2013) examined that in order to improve the status of Women Entrepreneurship
in rural area, the Govt. need to take an initiative in providing a facilitative environment for rural
Women entrepreneurs. It also aims to explore the present status of Women entrepreneurs regarding
their socio economic background, problems faced by them in seeking to create new ventures,
motivational factors and available finance for them in Kadapa district, A.P.
Deepti Pachauri (2012) attempt study that based on the emergence of Women Entrepreneurship
making significant impact in all segments of economy and the problems faced by them in setting up
and running their enterprise. The study was conducted in various training centers of KVIC, MSME
to collect the data and no. of Women entrepreneur trainees‟. The study was based on secondary data
collected from various training institutes, SSI office and financial banks which provide financial
assistance. Women entrepreneurs are having innovative thinking and foresightedness yet proper
planning and execution is required at all levels. A majority of Women entrepreneurs are from middle
class families have low technical education but desire to become entrepreneurs. The literacy and
educational status of Women improved considerably during the past few decades. At this juncture
effective steps are needed to provide entrepreneurial orientation and skill awareness to Women.
Goyal and Parkash (2011) opined that the educated Indian Women have to go a long way to
achieve equal rights and position because traditions are deep rooted in Indian society where the
sociological set up has been a male dominated one.
Jyothi Bahl (2012) expressed that the Entrepreneurship has gained greater significance at global
level under changing economic scenario. After independence, several Entrepreneurship development
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programs have been started to develop the skill, knowledge, and competence among the
entrepreneur. In spite of various Entrepreneurship development programmes launched by the Govt.
and non-government agencies, the entrepreneurs are encountering a number of problems for
establishing economically viable small- scale units. Women contribute significantly to the running of
family businesses mostly in the form of unpaid effort and skills. Rural Entrepreneurship is the
answer to removal of rural poverty in India. The problem is that most of the rural youth do not think
of Entrepreneurship as the career option. Therefore, the rural youth need to be motivated to take up
Entrepreneurship as a career, with training and sustaining support systems providing all necessary
assistance.
3. Objective of the Study:
The present paper primarily aims at focusing on the different problems faced by Women in micro
small and medium enterprises (MSMEs) in India. More specifically it highlights on the
1. Present position of MSMEs in India.
2. Factors influencing in Women enterprises.
3. Recommending some suggestion for further development.
4. Database and Methodology:
Methodology followed in present study is predominantly an analytical one. Data of the present study
have been collected from secondary source like published reports of Reserve Bank of India, annuals
reports of MSMEs, census survey, newspapers, journals, and books etc.
5. Women MSMEs in India:
First of all we have to understand the definition of MSMEs which was given by MSMED act 2006 is
given below:
Classification Manufacturing Enterprises Service Enterprises
Micro Rs. 2.5 million/ Rs. 25 lakh Rs. 1 million/ Rs. 10 lakh
Small Rs. 50 million/ Rs. 5 crore Rs. 20 million / Rs. 2 crore
Medium Rs. 100 million / Rs. 10 crore Rs. 50 million / Rs. 5 crore
Source: Ministry of MSME
5.1 Concept of Women Entrepreneurship:
Women entrepreneurs may be defined as the Women or a group of Women who initiate, organize
and operate a business enterprise.
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According to the Government of India is defined as “an enterprise owned and controlled by a
woman having a minimum financial interest of 51 percent of the capital and giving at least 51
percent of the employment generated in the enterprise to Women”. Women entrepreneurs engaged in
business due to push and pull factors which encourage Women to stand on their on legs. Under the
influence of these factors the Women entrepreneurs choose a profession as a challenge and as want
to do something new. Such a situation is described as pull factors. While in push factors Women
engaged in business activities due to family compulsion and the responsibility is thrust upon them.
According to Joseph A Schumpeter Women entrepreneurs may be defined as “a Women or group
of Women who innovate, initiate or adopt a business activity”.
6. Factors Influencing Women Entrepreneurs:
Source: Vijayakumar, T & Naresh, B (2013)
Setting up an enterprise is not an easy job for Women entrepreneurs and at the same time running the
enterprise is a greater task. A challenge is always there for these Women entrepreneurs to run their
enterprise successfully earning profit and ensuring the growth of the enterprises which will severely
test their entrepreneurial skill and survival of the unit. Despite various odds against them, several
Women are off to run their own enterprises. Even though there has been a considerable increased in
the number of Women entering in entrepreneurial activity, they are being introduced to many
constraints and difficulties with regard to control and decision making, social status and enthusiasm
in the product or serviced in which they are dealing. It is found that Women are entering more in this
Factors influencing
Women
Entrepreneurs
Achievement of
excellence
Building
confidence
Developing risk
taking ability
Greater freedom
and mobility
Equal status in
society
Motivation
Establishing their
own identity
Establishing
their own
creative idea
Economic
independence
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venture as compared to man to start their own business to make social contribution in addition to
desire of exploring their inner self and fulfilling their means of livelihood.
Women constitute 50 per cent of the total population of India. In spite of it, Women are still lagging
behind men in several aspects. Over the years, the literacy rate of Women and employment
opportunities are being increased by leaps and bounds. Moreover, of late, they are actively engaging
in several activities apart from employment. Women are involving and entering into business and
establishing different types of industries. The Government of Indian have been encouraging Women
to take up industrial establishments. Several financial corporations are funding for establishment of
industries. The policy makers, and administrators in India have for long recognized, the important
role that Micro, Small and Medium Enterprises play in the national economy, therefore the Central
and State Governments have taken over the years active steps to promote and foster their growth. But
these measures have not been particularly effective. Today, these enterprises continue to suffer from
innumerable problems and facing several difficult challenges which hinder their performance and
growth. Many of the problems of finance, marketing, production, distribution and infrastructure still
continue to afflict the MSME sector. While some of them are more or less common to a wide range
of small enterprises all over the country. In this paper the problems and challenges faced by the
Women entrepreneurs/ enterprises are in detailed.
Table 1: Women enterprises out of Total Enterprises Particulars % of Share
Total Enterprise (Lakh)
15.53
Women Enterprise (Lakh)
2.15
Percentage share of Women (%)
13.72
Source: Fourth Census Report on SSI Sector, (2007-08)
The above Table 1 shows that Total Enterprise 15.53 lakh where as number of Women enterprise in
India is 2.15 lakh with a percentage of 13.72 in MSME sector.
Table 2: Area wise Distribution of Female Enterprises Particulars Female Male
Rural 15.27 84.73
Urban 12.45 87.55
All 13.72 86.28
Source: MSMEs Census Report Fourth (2007-08)
Table 2 depicts the area wise distribution that there is male dominance in ownership of MSMEs.
However Female enterprises contribute 13.72 percent in the MSME Sector. The above table shows
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the percentage of female enterprise in SMEs in India. It is evident from the table that the Percentage
of Rural female SMEs (15.27%) is more than the urban areas (12.45%).
Table 3: Sector Wise Distribution of Female Enterprises Particulars Female Male
Micro 14.19 85.81
Small 5.06 94.94
Medium 4.21 95.79
All 13.72 86.28
Source: MSMEs Census Report Fourth (2007-08)
Table 3 depicts the sector wise distribution of female Enterprises in micro, small and medium scale
enterprises. Micro enterprises are the major contributor in case of female enterprises which account
for 14.19%. Whereas in case of medium enterprises it account for 4.21% where as small enterprises
contribute to 5.06%. The overall contribution is 13.72% by female enterprises as against 86.28% by
male enterprises.
Sector Wise Distribution of Female Enterprises by a Pie chart represented as below
Source: Prepared by Researcher
7. Problems of Women Entrepreneurship:
The basic problem of Women entrepreneurs is that they are Women. In many developing countries
like India marriage is treated as the only carrier for Women. Despite the constitutional and legal
equality, Women suffer from male domination. Some of the specific problems faced by the Women
entrepreneurs in India are as follows:
I. Shortage of Finance: Finance is the life-blood of an enterprise. It is prerequisite for
accelerating the process of industrial development. However, Women entrepreneurs always
suffer from inadequate finance and working capital. Women entrepreneurs are not able to
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have access for external finance. An important reason that makes banks reluctant to provide
loans is the inability of the Women entrepreneurs to provide collaterals. The complicated
procedure of bank loans also creates lot of problems in getting the required finance.
Obtaining the support of bankers, lack of credit resources and managing the working capital
are the problems that still remain in the males‟ domain.
II. Marketing Problems: Women entrepreneurs often largely depend upon middlemen for
marketing their products who pocket large amount of profit. The middlemen exploit the
Women entrepreneurs. Many Women entrepreneurs find it difficult to capture the market and
make their products popular. It is one of the core problems as this area is mainly dominated
by men.
III. Scarcity of Raw Materials: The scarcity of required raw materials is the major problem
faced by Women entrepreneurs. They find it difficult to procure the required raw materials
and other essential inputs for production in sufficient quantity and quality, because the prices
of raw materials are quite high and fluctuate.
IV. Stiff Competition: Many of the Women enterprises have imperfect organizational set-up.
Thus, Women entrepreneurs have to face a stiff competition for marketing their products
from both organized sector and male entrepreneurs having vast experience.
V. Family Conflicts: In India, it is mainly a woman‟s duty to look after the children and other
members of the family. A married woman entrepreneur has to strike a fine balance between
her business and family. The woman entrepreneur cannot succeed without the support and
approval of husband and family. Women also face the conflict of performing home role as
they are not available to spend enough time with their family members. Women
entrepreneurs spend long hours in business. As a result, Women entrepreneurs find it
difficult to meet the demands of their family members and society as well. Their inability to
attend domestic work, personal hobbies, entertainment and time for education of children
adds to their conflicts.
VI. Lack of Education: In India, most of the Women are still illiterate. Illiteracy is the cause of
socio-economic problems. Due to lack of education, Women are not aware of business,
market knowledge and technology. Thus, lack of education creates problems for Women in
the setting up and running of business enterprises.
VII. Male Dominated Society: Our society is still male-dominated and Women are not treated on par with
men. The Constitution of India speaks of equality between men and Women. However, in practice
Women are looked upon as weak and dependent on men. This in turn, serves as a problem to Women
entry into business.
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VIII. Low Risk-bearing Ability: Women in India led a protected life. Women are less educated and
economically not self-reliant. All these decrease their ability to bear risk involved in running an
enterprise. Risk bearing is an important requisite of a successful entrepreneur.
IX. Lack of Information and Assistance: Another significant need of many Women business owners is
obtaining the appropriate assistance and information needed to take the business to the next level of
growth. In a study conducted to gather information needs of Women entrepreneurs, those who were
just starting their ventures, requested assistance and training in implementing the business idea,
identifying initial sources of financing, and advertising/promotion.
X. Lack of Infrastructure and Widespread Corruption: These are also the other problems for the
rural Women entrepreneurs. They have to depend on office staffs and intermediaries to get the things
done, especially the marketing and sales side of business. Here is the more probability for business
fallacies like the intermediaries take major part of the surplus or professional dependence. Rural
Women lack training and advisory services on managerial and technical skills to solve production
problems. Here more than 70 percent of enterprises are micro- and small enterprises but their growth
and the competitiveness is greatly challenged by a lack of business management, marketing and
technical skills besides the overall weak infrastructure and complicated legal frameworks for
business processes, especially in global online transaction context.
Source: Prepared by Researcher
Stiff
Competition
Lack of
Infrastructur
e
Family
Conflict
Lack of
Information
and Assistance
Low Risk
Bearing ability
Scarcity of Raw
Material
Marketing
Problem
Male Dominated
society
Lack of
Education
Shortage of
Finance
Problems of
Women
Entrepreneurship
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8. Conclusion and Recommendations:
Women entrepreneurs are contributing a lot in rural development and growth of economic but their
potential is still untapped. The following efforts can be taken into account for effective development
of Women entrepreneurs:
There are various schemes and plans of government for the encouragement of Women
entrepreneurs but on ground level their execution is poor, there should be a strong monitoring
of these policies at different levels of execution.
Government should organize training programmes to develop skills, professional
competencies, leadership, and information of marketing and financial at village level.
Vocational training to be extended to Women community that enables them to understand the
production process and production management.
Information should flow in right direction with the help of NGO„s and government
organizations to about policies, plans and strategies on the development of Women in the
field of industry, trade and commerce.
Making provisions of marketing and sales assistance from Government part.
Making provisions of micro credit system and enterprise credit system to the Women
entrepreneurs
Women generally hesitate in going through the procedural formalities in extending loans
imposed by the banks. They face problems in preparing project reports and completion of
other paper work. The banks should simplify the application forms for Women entrepreneurs.
COVID-19 special relief announced by the Govt. of India in first tranche of economic
package on May 13, 2020, Collateral free loan of INR 3 trillion for 4.5 million units, debt
provision of INR 200 billion (US$2.65 billion) has been announced for 200,000 MSMEs,
Equity infusion worth INR 500 billion, A reduction of 25 percent on the Tax Deducted at
Source (TDS) and Tax Collected at Source (TCS) from May 14, 2020 to March 31, 2021 &
extended the date of income tax filling return from July 31, 2020 to December 31, 2020.
The MSMEs in India face a tough situation due to extreme competition from large industries due to
withdrawal of subsidy, lack of infrastructure, anti dumping policy, challenges on product
standardization, total quality management etc. Though Globalization has increased competitiveness
in Indian MSMEs to certain extent, still Indian MSMEs are not adequately prepared to compete with
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the global players. There has been a definite change in attitude of the Govt. from protection to
promotion of the MSMEs. The Govt. has taken several policy initiatives but needs to ensure proper
co-ordination and implementation of such schemes. The MSMEs must convert the threats of
globalization into opportunities through increased productivity, product diversification, supply chain
management, Research and Development activities.
Women Entrepreneurship plays a key role in industrial development. Empowering Women
entrepreneurs is essential for achieving the goals of sustainable development. Today with the growth
of MSMEs, many Women have entered into Entrepreneurship. The Government of India has come
forward with many schemes, concessions and incentives exclusively for Women entrepreneurs. But
in spite of these, Women entrepreneurs have to fulfill their multiple roles as mother, wife and
business Women. Women entrepreneurs face many problems in their efforts to develop their
enterprise. Therefore, Women entrepreneurs need encouragement and support from the family
members, Government, society and male counterparts. Finally, if all forms of gender discrimination
and bias can be eliminated from the society as a whole, then it will allow Women to be an
entrepreneur on par with men.
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