4th International Research Conference on Entrepreneurship

Women Entrepreneurship: Issues and Strategies for Financial Aid

Author: Pratibha Trivedi (PGDM, Final Year)Prof. Rabiya Jidda (Faculty – Human Resources)

Institute Affiliation: Guru Nanak Institute of Management Studies

Abstract

Women owned businesses are highly increasing in the economies of almost all countries. The hidden entrepreneurial potentials of women have gradually been changing with the growing sensitivity to the role and economic status in the society. With the advent of media, women are aware of their own traits, rights and also the work situations. The glass ceilings are shattered and women are found indulged in every line of business from papad to power cables.

Empowering women entrepreneurs is essential for achieving the goals of sustainable development and the bottlenecks hindering their growth must be eradicated to entitle full participation in the business. Women in India are facing many problems to get ahead in business.

This paper mainly focuses on funds (through financial institutes) as hurdle for most of the women entrepreneurs. Almost all public sector banks run special schemes to fund women entrepreneurs; yet it proves to be difficult for women to acquire loans easily. This is partly because of the mindset of bank officials who believe that women will have to run that extra mile to market their products, making it hard to make decent sales. Low awareness about these schemes is another reason for their slow uptake. The research paper aims at exploring various schemes offered by nationalized banks, challenges that women entrepreneurs face when it comes to avail funding and tips on how to make the going easy.

Keywords: Women, Entrepreneurship, Empowering, Risk, Funds, Schemes, Nationalized Banks, Challenges

Introduction

Entrepreneur is defined as the “one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods”. This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses (referred as Start-up Company); however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations.

“Women Entrepreneur” is a person who accepts challenging role to meet her personal needs and become economically independent. Skill, knowledge and adaptability in business are the main reasons for women to emerge into business ventures. A strong desire to do something positive is an inbuilt quality of entrepreneurial women, who is capable of contributing values

in both family and social life. With the advent of media, women are aware of their own traits, rights and also the work situations. The glass ceilings are shattered and women are found indulged in every line of business from papad to power cables. The challenges and opportunities provided to the women of digital era are growing rapidly that the job seekers are turning into job creators. They are flourishing as designers, interior decorators, exporters, publishers, garment manufacturers and still exploring new avenues of economic participation.

Constraints faced by women:

In India, although women entrepreneurship is a growing trend, the entrepreneurial world is still a male dominated one. Only 8 % of overall women entrepreneurs do paint a sorry picture [Source: Entrepreneur-Sept.2010].Women in advanced nations are recognized and are more prominent in the business world. But the Indian women entrepreneurs are facing some major constraints like –

a) Lack of confidence – In general, women lack confidence in their strength and competence. The family members and the society are reluctant to stand beside their entrepreneurial growth. To a certain extent, this situation is changing among Indian women and yet to face a tremendous change to increase the rate of growth in entrepreneurship.

b) Socio-cultural barriers – Women’s family and personal obligations are sometimes a great barrier for succeeding in business career. Only few women are able to manage both home and business efficiently, devoting enough time to perform all their responsibilities in priority.

c) Market-oriented risks – Stiff competition in the market and lack of mobility of women make the dependence of women entrepreneurs on middleman indispensable. Many business women find it difficult to capture the market and make their products popular. They are not fully aware of the changing market conditions and hence can effectively utilize the services of media and internet.

d) Motivational factors – Self motivation can be realized through a mind set for a successful business, attitude to take up risk and behaviour towards the business society by shouldering the social responsibilities. Other factors are family support, Government policies, financial assistance from public and private institutions and also the environment suitable for women to establish business units.

e) Knowledge in Business Administration – Women must be educated and trained constantly to acquire the skills and knowledge in all the functional areas of business management. This can facilitate women to excel in decision making process and develop a good business network.

f) Awareness about the financial assistance – Various institutions in the financial sector extend their maximum support in the form of incentives, loans, schemes etc. Even then every woman entrepreneur may not be aware of all the assistance provided by the institutions. So the sincere efforts taken towards women entrepreneurs may not reach the entrepreneurs in rural and backward areas.

To relate this with one of the women entrepreneur Maria D’souza, Kalina, age 38, has her parlour which she is running in rented place. She wishes to have her own parlour, and due to lack of fund she is not able to do so. As she is also not aware about loan facility provided by banks especially for women.

g) Exposed to the training programs - Training programs and workshops for every type of entrepreneur is available through the social and welfare associations, based on duration, skill and the purpose of the training program. Such programs are really useful to new, rural and young entrepreneurs who want to set up a small and medium scale unit on their own.

h) Identifying the available resources – Women are hesitant to find out the access to cater their needs in the financial and marketing areas. In spite of the mushrooming growth of associations, institutions, and the schemes from the government side, women are not enterprising and dynamic to optimize the resources in the form of reserves, assets and mankind or business volunteers.

Highly educated, technically sound and professionally qualified women should be encouraged for managing their own business, rather than dependent on wage employment outlets. The unexplored talents of young women can be identified, trained and used for various types of industries to increase the productivity in the industrial sector. A desirable environment is necessary for every woman to inculcate entrepreneurial values and involve greatly in business dealings. The additional business opportunities that are recently approaching for women entrepreneurs are: Eco-friendly technology, Interior Decorators, IT enabled enterprises, Event Management, Tourism industry, Fashion Industry, Herbal & health care, Food, fruits & vegetable processing.

LITERATURE REVIEW

Research by Viju Mathew and Mary Kavitha (2010), the involvement of women in the economic development of Middle East through micro-enterprises was very less due to the socio-cultural restriction in the Middle East countries. The region has lately recognised the importance of entrepreneurship for the economic development of the country and to create competitive advantage.

A study by Nic Paton (2006) (Global Entrepreneurship Monitor), studied more than 100,000 people in 35 countries has found that, while women entrepreneurs often exhibit patterns of behaviour similar to those of men, a gender gap nonetheless exists for entrepreneurial activity across the globe Women entrepreneurs are just as likely as men to seek out new opportunities, take risks and network with other entrepreneurs – yet nevertheless find themselves lagging behind their male counterparts when it comes to entrepreneurial activity.

Challenges: A practical picture

Though a number of credit schemes are available for women, there are several bottlenecks as well. The first major problem is that while there is a lot of discussion on empowering women and promoting women entrepreneurs, these bank schemes only provide a minor relief in terms of interest rate and at times on collateral. The other terms and conditions of the schemes are similar to consumer loans. Moreover, in practice there is a major gap between policy and practice. Besides the project report, the sanction of the loan also depends on a case-to-case basis on the entrepreneur and the bank officer she approaches.

The higher the loan amount, the more difficult it is to get loans. One of the problems is that it may be easy for a bank official to give a larger loan to a man compared to smaller loans to a

woman because many smaller loans mean more paperwork. A woman mostly starts on a small scale. So at that level, she faces difficulty while accessing loans. It again happens at the growth level, where a woman wants to expand and is in need of a loan. At that stage, they give you only 10% more of their previous year’s turnover. This is obviously not enough.

Besides, there is a need to sensitize bank officials. Neeta Kumar of Kala Gaon says, It took her more than one -and-a-half years to get a bank loan. They faced a lot of problems as they were artists. A bank even said why don’t they build malls instead?

When Neeta Kumar, a 41-year-old entrepreneur from Lucknow, decided to set up an artificial village in the outskirts of the city, it took her a year-and-a-half to manage funds for her project. While running from pillar to post with her project report in tow, Kumar had a hard time convincing bank officials that Kala Gaon, her dream venture, would be a viable business proposition and that she would not default on her loan. Her ordeal finally came to an end in the spring of 2006 when she threw open the gates of Kala Gaon supported by a Rs 60 lakh loan from Punjab National Bank. Today, the theme village is a major tourist attraction in Lucknow and has given a platform to several rural artisans and sculptors.

Almost all public sector banks have special loan schemes for women entrepreneurs. But low awareness and a passive mindset ensure that there are very few takers.

Example of women entrepreneur is not aware about the loan and their scheme. Story of Saroj ben who is 48 yrs. old with 2 children is quite common, an entrepreneur who has struggled and reached this stage. She stays in dharavi an area known as khumbharwada most of the people there are khumbhar’s [Potters] who make pots and diya of various type and design and supply it across Mumbai, this is their seasonal business. Saroj ben also had same kind of work where she use to bring the diyas (lamp) colour them decorate them and sell to shops, but this business could not generate enough money to sustain their life. She is a drop out from school but had done beautician course, she decided to start ladies parlour to acquire some extra income. The initial requirement was a place for shop, material (cream, lotion, etc), tools (scissors’, comb, and clutches), furniture (dressing table, chair, mirrors). She had already planned everything and worked according to her plan, this lady was not educated but had a vision. Her saving was not enough to support her dreams, she mortgaged gold got around 30 thousand, she rented a room near to her home. This is how Saroj ben showed courageand managed to overcome the difficulties. This was the only parlour in khumbharwada charges were very normal Saroj ben could make her profit well. After 2 years she could buy a room for her parlour and they yet continued with their family business of lamps. After 7 years she is able to purchase a flat for herself in miraroad.

Take the case of Kavita Singhal, a jewelery designer. She belongs to a family that has been in jewelery designing for years. Though her family was supportive of her decision to enter this trade, she was in need of funds to start her own venture. Singhal initially found it difficult to convince banks that she would be able to market her products and run a profitable venture. Eventually, she managed to convince Canara Bank, where she has had a savings bank account for many years, to grant her a loan of Rs 1 lakh. Today, she manages to sell jewellery worth Rs 30,000 to 35,000 per month through her own outlet that she plans to expand in the near future.

Motivations to start a business include economic independence, family welfare, and an emerging clientele. Unlike family-owned or male run businesses, small and medium sized

women's enterprises are shorter-term products of cultural change focusing on upward social mobility for their families. Entrepreneurship impacts the marketplace, bolsters a struggling economy, empowers women in their household, and makes them cultural brokers in society.

We have spoken to number of women entrepreneurs during the course of research and found that there is a common thread linking most, if not all of them. A typical woman entrepreneur belongs to two broad categories —

She is either from a financially secure background and is willing to take risks with her own venture or

She is from an economically weaker background and wants to start an enterprise to sustain her family.

Institutes or NGO’s who conduct development program or workshop for these women say “Most of the women who come to women entrepreneurship workshops are either from well-to-do-families, who think the risk is worth taking or those who belong to the lower-income group and are interested in starting a business for survival.”

Bank funding: Schemes and advantages

Some Schemes for Women EntrepreneursBank SchemeBank of India Priyadarshini YojanaCanara Bank CAN MahilaCentral Bank of India Cent KalyaniDena Bank Dena ShaktiOriental Bank of Commerce Orient Mahila Vikas YojanaPunjab National Bank Mahila Udyam Nidhi SchemePunjab & Sind Bank Udyogini SchemeState Bank of India Stree Shakti PackageState Bank of Mysore Stree ShaktiSIDBI Mahila Udyam NidhiTamilnad Mercantile Bank Mahalir

Table No: 1

Several nationalized banks in India have special schemes for promoting entrepreneurship, especially enterprises owned by women. For a woman to benefit under such a scheme, she should have a minimum of 50% ownership in the company. According to the bankers, “When a woman opts for the bank funding route, the assessment is made in the same way as other loans, but the terms and conditions are much favourable. Most of the nationalized banks in India have such schemes and also something called as the single-window coordination facility wherein one department will handle all the linkages required for getting the loan.”

The schemes mostly give concession on interest rate of approximately 0.25 to 1%, depending on the loan amount. The procedure for applying is similar to other loans, the benefit of such schemes being that preference is given to women.

Table no.1 For example, under the Priyadarshini scheme of the Bank of India (BoI), the concession on rate of interest varies from 0.25% to 0.50% on retail banking that includes several loans like personal loans. According to VK Bansal, Chief Manager, Zonal Office, BoI, “Applying under these schemes is similar to applying for other schemes. You have to submit an application along with the details of your business. Then it will be processed for information such as what kind of business you have applied for, whether you have the experience or not, what is your own contribution in this project etc. If we find it viable then we go ahead with the loan.” The concession in the interest rate is also extended to other consumer loans. During the last financial year, the Chandigarh branch of Bank of India, disbursed approximately Rs 81 lakh to women entrepreneurs in 37 accounts.

Similarly, Dena Bank under the Dena Shakti scheme promotes women entrepreneurship by funding a number of activities. Earlier, the scheme covered only the manufacturing sector, but now has been extended to agriculture and allied activities, small enterprises, micro and small (manufacturing and service) enterprises, retail trade, micro-credit, education and housing. Dena Bank gives a concession of 0.25% on interest rate. As per the bank’s website, the loan ceiling is described as follows, “The maximum ceiling limits that can be considered for financing to women beneficiaries under this scheme will be as per the directives of RBI stipulated for various sectors under priority sector such as loans up to Rs 20 lakh under retail trade, Rs 20 lakh under education and housing and Rs 50,000 under micro credit as well as the bank’s specific schemes circulated to branches/offices from time to time.” Considering the fact that a bank has to disburse 5% of the previous year’s adjusted net bank credit (ANBC) to women under all schemes, Dena Bank has a target of approximately Rs 1,185 crore, according to a source.

Example: Vinnie Chaddha of Reboot Shoe Laundry advocates the Dena Shakti scheme. She says that she had participant at the Business Baazigar reality show on Zee TV that was aired three years back. Her idea was one of the favourites of a judge, so judge himself introduced her to Dena Bank. The bank, was convinced by the idea, granted her a loan under the scheme. She says, bank was quickly offered her loan of Rs 3 lakh. The entire loan procedure took just about a little more than a week’s time and around five to six visits. On being quizzed whether, knowing somebody helped to speed up things, she was quick to reply, that funding depends on a number of things such as the loan amount, the concept etc. In her case, the loan amount was small, the concept was very fresh and she was able to provide a guarantor for the loan amount.

An added advantage is that some banks such as the State Bank of India (SBI) and Canara Bank have consulting cells for entrepreneurs. At Canara Bank, besides consulting, the cell also provides skill training, counselling and at times avenues for marketing their products as well. The counselling cells help provide a more realistic view of the business as they often give references of similar businesses and the issues they faced while starting up. During the last financial year, the bank disbursed Rs 489 Cr. for women under various schemes in the Delhi circle, a bank source revealed.

Some loans also provide relief in terms of collateral security. Take for example, Oriental Bank of Commerce’s (OBC) Oriental Mahila Vikas Yojana. Under the scheme, no collateral security is required up to Rs 10 lakh and in the case of small-scale industries (SSI) no collateral security is required for up to Rs 25 lakh. The bank’s website states, “Only hypothecation of assets created out of the bank’s finance will be taken as security.” When contacted, a senior bank official said, OBC is one of the banks that have reached its target of

disbursing 5% of the previous year’s ANBC. Besides, the bank is also actively engaged in providing micro-credit by providing doorstep services to rural women.

Other nationalized banks with special schemes for women entrepreneurs are State Bank of India, Canara Bank and Punjab National Bank to name a few.

Table No: 2

What women say What banks sayNot aware of special schemes Many women are usually silent partners,

included just to get the benefit.A relief of just 0.25 to 1% in interest rate is not worth the trouble

Sceptical whether women will be able to market their products and services.

The process is too time consuming and requires far too many visits to the branch

Not many women come seeking loans for their start-ups.

Often do not get what is promised Have special cells for helping entrepreneurs, especially women.

Objectives of the Study

1. To identify the challenges and issues faced by women entrepreneurs with special reference to financial assistance.

2. To find the awareness of the various schemes for financial aids provided by banks.

3. To understand the attitude of banks towards women entrepreneurs in need of financial aids.

Research Methodology

Sources of Data:

Secondary data sources such as books, magazines, journals and websites were referred to arrive at an indepth understanding of various issues and challenges faced by women entrepreneurs.

Primary data sources included a survey which was conducted in Mumbai region. A questionnaire was designed to understand the level of awareness and the nature of difficulties faced by women entrepreneurs. The questionnaire included 16 items which were a mix of open ended as well as closed – ended questions. Aspects covered in the questionnaire included: Financial Source, Sufficient financial assistance, Constraint faced, Expansion plans, Role of banks.

Sample was taken from Mumbai, sample design consist of women entrepreneurs Sample size taken was 25 women entrepreneurs. This study was part of non-probability sampling called as purposive sampling or judgmental sampling

Results & Discussion

The objective of this paper was to identify the challenges and issues faced by women entrepreneurs with special reference to financial assistance, to find the awareness of the various schemes for financial aids provided by banks and to understand the attitude of banks towards women entrepreneurs in need of financial aids.

The questionnaire was designed to collect data from respondents with regard to their fund avenues for their business, savings and consumption patterns both before and after they had venture into entrepreneurship. After the data was collected, based on the percentages, values were calculated for each of the components and then recorded.

This questionnaire majorly focuses on start-up and expansion finance for the business and difficulties faced during this process/phase.

The survey found that one of the main reasons for women to start their business that they have experience in the relevant field (40%), the second top reason is venture new field of opportunity as the earlier one could be saturated or new one venture has more chance of growing. 3rd important factor on the list was hobby, these women converted their hobby their passion into business which is fair enough as they do have liking and also have created. (Refer figure: 1)

Similar research was carried out by Australian Business women network. Suzy Dafnis who heads the group also mentions that he has noticed many women’s who leave the corporate world, and start their own business for the reasons which includes: freedom to choose work hours and work location, working around raising children, being your own boss, setting your own salary, utilising your creativity to create something new, and of course - financial freedom.

Figure: 1

As per the data collected, 10 critical factors evaluated and identified as challenges faced by women entrepreneurs were listed in questionnaire, those factors are self-confidence; start up finance, lack of information, family support, finding the right contact, management skills, family and work life, and gender discrimination and last but not least others.

Major factor creating problem for women was start-up finance which is 39 % followed by lack of management skills and lack of information as 12% and 10 % respectively it was amazing to note that family and work life balance was rated as second least problem i.e. 2% this shows that women don’t identify family and work life balance as challenge. (Refer figure: 2)

This question was created to know the awareness of the women regarding bank facility provided to women entrepreneurs. As the respondents are from different field and different segment of the society, hence qualification, experience, and environment vary for these entrepreneurs. There are women who are aware about bank providing loan for women, awareness rate is 64%, thus can could that interest of respondent toward financial aid for their business is growing, they have become more enthusiastic to venture new source, they have become conscious about various schemes which they can opt for, interest rate that banks provides and compare rate provided by different banks. 36% women are not aware about

Figure: 3

Figure:2

bank providing loan for women entrepreneurs, these women are not much educated and they actually do not fall in the category of customers who can use facility provided by banks. (Refer figure: 3)

Even though women are aware about bank providing loan for women but they do not approach banks in fact they are not aware about the loan schemes, only 28 % women are aware about the scheme, this is not appreciating figure were only 28 % of female are aware about the scheme and this female are the one who are actually borrowing loan from banks hence they are aware about the schemes and rest 72% are not aware whether bank has what kind of schemes, and how can be these schemes prove beneficial for development of women owned business. (Refer figure: 4)

According to survey; there are five major reason that discourages women to approach bank for their business, these factors are (a) Not aware about the scheme, (b) Not eligible for bank loan (c) Huge fund not required (d) had enough fund for business (e) others. Majority of the women were not aware about the schemes (45%) while discussing about awareness of the scheme they mention that they have not heard of about theses scheme, it can be concluded that banks are not doing advertisement of this schemes on high scale. Other reasons were that huge fund was not required (8%); women who opted for this option were generally occupying the small size business which does not call for huge funding. Next category were the women

Figure: 4

Figure: 5

who had enough funds to finance their business(8%), these are the women from upper class of the society, or the female who were working initially and were ready with their saving to invest in their business. Women who are in category of others (8%) are either not in the favour of taking the loan from bank, or they are not comfortable with bank procedures. (Refer figure: 5)

Data shows that among the various schemes available in the market the scheme which on top of mind of these women were scheme from canara bank, Bank of India, Bank of Baroda and Dena bank

Scheme from Canara bank i.e. Can Mahila scheme is one of the favourite scheme of these women entrepreneurs.

6 out of 11 female opt for or are aware of Can Mahila scheme Schemes from Bank of India, Bank of Baroda and Dena bank are also well known.

This may be due the high customer data base that these banks have has promoted themself well in the market, or that they have good customer service or either they have promoted their scheme through advertisements and promotional activities.

Data shows that 1/3 of the sample size have taken loan for their business, this is either start- up finance or loan for expansion which will help these women to do the business. To Start any business there is requirement of huge finance, sourcing of this huge finance is little difficult but not impossible. Hence maximum respondent (75%) opt for loan, this loan can be then from any sources either from moneylender, relative or bank. Where else (25%) female do not take loan for their business, they may have enough fund for their business or either they do not have that huge requirement of the fund. (Refer figure: 6)

Figure: 6

Data shows that people those who are taking loan, maximum of them approach banks for their loan i.e. 40% other than banks next second highest number goes to relatives and then moneylenders and then others.

Research done by Myers, Jennifer, revels that 75% of women take the loan depending on the bases of their relationship with source, and our study shows that these women have major source from bank that is 40%, we can conclude that bonding between customer and bank is developed well. Next major category is relatives (24%), as the loan obtained from relative are generally unsecured loan and without any process let it be the formality of documentation, providing collateral or disbursement of loan. Next majority goes to Moneylender and others securing 4% each. Women of low income group take loan from moneylender, as they do have to keep some kind of collateral for this finance. (Refer figure: 7)

If we analysis the data carefully its states that 40 %of female take loan from bank, around 32% of women entrepreneurs take loan from other sources, in addition to this womens those who don’t take loan are 25%. 57% of women don’t take loan from bank reason for same are as follows (a) Poor service provided by bank (b) Interest rate (c) Time consuming process (documentation).(d) Bank not cooperating in the process. (e) Others.

24% Respondent say that process of getting loan is time consuming; this will delay the whole plan, and if process is not timely executed if will be redundant. Apart from this high interest rate was rated second most important reason for respondents to not opt for bank loan,

Figure: 7

Figure: 8

respondents say “difference in the interest rate is hardly 0.5% - 1.5 % which does not attract women’s towards bank loan”. Poor service of bank was third major reason poor service includes service provided by bank in normal terms, like account facility, transfer of cash or cheque.(Refer figure: 8)

According to the data available female prefer to take loan from Dena bank (48%) and the second preferred bank for the loan is Canara bank scheme called as can mahila (12%), still is far away from Dena bank difference is of 36% . similarly Punjab national bank and Bank of India stand 3rd and 4th respectively. Reason for Dena bank to be favourite one was mentioned the time duration taken by the bank to give the loan is less and process is also very customer or we can say women friendly.(Refer figure: 9)

Period for loan: The maximum amount of loan sanctioned varies from bank to bank, maximum tenure provided by bank is generally 5 years. Bank can divided this loan inot three major category i.e. Short term, intermediate and long term loan.

Figure: 10

Figure: 9

Survey says that 75% of respondent take loan 40 % from bank and rest from the other sources i.e. relative, money lenders and others. These 75% respondent take loan to accomplish their goal, attain their vision. When there is requirement for start up finance they opt for long term loan as it used for establishing the business, to increase the fixed assets, for related business acquisitions and expansion taken for the long term. While many respondent also opt for short term and intermediate loan so that they can use it for short term working capital or to build inventory, buy equipment or increase working capital.(Refer Figure :10)

Data reveals maximum women take loan once percent is quite high i.e. 56%, normally huge fund is required at time of starting up the business where every cost is to be evaluated and maintained, ones business has started den only maintain cost is liable, other cost like raw material, process cost, labour charges, logistics, etc. This cost can be later analysed and worked out. Hence, loan during start-up period is common. Where else loan taken twice or thrice are hardly 8% and 6% respectively, generally to acquire new project, or to maintain the old business. (Refer Figure No: 11)

Only 16% of female are aware about microfinance, percentage for aware about microfinance is very less in Mumbai, where else 80 % of them are not aware about the concept of microfinance. 4 % fall in category of cant say where they have heard of microfinance but are not aware about its concept “can’t say” is more or less equal to not aware.

Microfinance is the provision of financial services to the poor, who are excluded from formal financial systems, in a sustainable manner. It utilizes credit, savings and remittances and other financial products, such as micro-insurance, to help families take advantage of income-generating activities and better cope with risk.

Women particularly benefit as many microfinance institutions, or MFIs, target female clients . Few microfinance companies, which people have identified are SKS (Kandivali), Intellecap (Malad), Hindustan Micro finance (Andheri), were named by the women who were aware about microfinance companies.

Suggestion provided by respondent for the financial institutes where as follows, Institute should opt for ease documentation process: As numerous document are required for

Figure: 11

Figure: 12

disbursement of loan and it’s almost impossible to get all the document at once some facility should be provided like initial and important document to be submitted and rest could be taken care latter. Time taken for disbursement should be less: in short less time consuming process should be introduced as the document takes time to be processed and then procedure is long and you have to wait for disbursement of loan. Interest rates should be reduced: concession or discount in the loan should be given for women’s, so that women could be encouraged for entrepreneurship. Re-payment of the loan should be flexible: as the finance is not consistent in business 1st year you had good profit so you want to repay the loan and your loan scheme is not flexible enough for the same. Counsellor should be appointed: so that process could be explained well to, more promotion should be done: many times scheme are not know to these women which is also loss of opportunity.

Turnover of women owned organization is huge range of annual income falls from 1, 20,000 onwards to15, 00,000. Many respondents who have recently started their business like Mrs. Bina sha owner of toy library are satisfied as they can meet BEP and sustain their business. Entrepreneurs like Anchal gupta owner of Art in motion academy have turnover of approximately 15, 00,000. Where else film producer Guneet Mogas turnover runs into crores.

Take Jessica Jacobs, a former clothing designer who founded Calgary-based Little Soles Inc. in 2005. Like many entrepreneurial moms, Jacobs started her business when her kids were under five. She discovered a niche in the marketplace: making shoes with non-toxic materials for infants and toddlers who are known to suck on their toes. Despite a setback about two years ago when a container holding her entire fall line of shoes fell into the ocean and sunk, Little Soles is doing well these days with annual revenues of about $3 million.

Key Findings

1. The study brought to light various constrains that women entrepreneurs faced to start the business. These problems are generally related to finance. When evaluated these constrains were regarding managing of business, socio-cultural barriers, awareness about financial assistance, Identifying the available resources for the business, identifying the market segmentation.

2. Financial institute can aid entrepreneurship among women: this was identified from study that problem of funding can be solved by financial institutes, just by updating their schemes and policies and making it more women friendly.

3. This research also gives information about various financial schemes that is available in the market, these schemes have different interest rate and different types of perk, and it has also being noticed even though these banks have schemes for women entrepreneurs but they are very much sceptical to provide loan, because of various reasons are mentioned earlier.

4. Attitude of women towards their business; they are very much determinant, passionate and enthusiastic about their business, as this business is either means of livelihood or their passion. Whatever is the hurdle they try their level best to overcome it and achieve their goal.

5. Attitude of bank toward women entrepreneurs: bankers find it risky to provide women entrepreneur loan as they feel that women are not good at marketing their product/

business. And that will lead to loss in business, as well as will not be able to pay the instalments and ultimately lead to default in the payment of the loan.

Recommendations

Various studies and researches conducted on women entrepreneurs reveal that, a woman entrepreneur will typically not think that since more people are doing a particular business and earning significant profits out of it they should enter the arena. Profit and size seems to be of less importance and satisfaction of doing it is of more importance to them. This is good in a way because this helps them to learn the basics well before they take bigger risks and invest high. Hence I would like to recommend few things to both women entrepreneurs and to the financial institutions.

Women entrepreneurs should incorporate some changes in their system of doing business, which will help them to grow their business, make more profit, to add on to their bank balance.

1. Research the various schemes available: Before approaching a bank, one should be aware of the various schemes that banks offer. This helps in being more practical and knowing which schemes you are eligible for. “You should be very well equipped with the various schemes. It prepares you to go to an official and demand to be funded under a scheme and benefit from it.”

2. Try to market your product first: One of the major difficulties a woman faces is marketing. Even banks are very sceptical about this while extending loans. Before starting up, I would ideally advice women to first test their product in the local market. They can invest some money from their pockets and get a small amount of their product manufactured by a local manufacturer. They can then try selling their product in the market. This helps in not only understanding the business better, but also when approaching the bank.

3. Be thoroughly aware of your business plan: Creating a business plan is of utmost importance. Many a times what happens is that they sit with consultants to make the project report. In that case, it is very important to know the details of financial documents very well such as what is your debt equity ratio, when will be your break even etc. Sometimes, what happens is that they go too early to the bank and when the banks ask questions they get scared. Then, the banks might as well say, why should I give you loan when you even haven’t thought of this.

4. Read loan documents carefully: You might have heard this statement many times, but ignored it. When going for a loan, it is extremely important to sit with the banker and understand all clauses and calculations. One has to think through all scenarios before getting into a loan agreement. People often only look at the interest rate number, but there can be many hidden things. One might have taken a loan for, say, three years, but if your business does well and you want to pay the loan back, then there might be a pre-payment penalty that you may not have been aware of. Another thing is that often the interest rate is calculated at the end of the month, but if you have paid the loan on say the 5th of the month, then ideally the interest should be calculated for 25 days and not for 31 days.

5. Join a women’s network: This helps in keeping in touch with other women entrepreneurs who are already in the field. This also aids in learning from the experience of other women. Another added advantage is that at times it helps in networking with bank officials. There are a number of such organizations such as AWAKE [Association of Women Entrepreneurs of Karnataka], eMERG [Engineering Manufacturer Entrepreneurs Resource Group] and FIWE [Federation of Indian Women Entrepreneurs].

6. Financial Institute must bring changes to their process and policies like, making the loan procedure easy for women, documentation process should be ease or manage able, interest rate must be low so that they can promote more women entrepreneurs, replayment of loan must be flexible.

Conclusion:

This is the time to look back with pride, when India has been attracting global attention not only for its fastest economic growth and rising consumerism but also for its entrepreneurial capabilities. Today we see a good number of business enterprises and as women are contributing to the figures, there is need to motivate and encourage these women. Financial assistance provided to these women entrepreneur will act as motivating factor, and will help them to grow their business, increase their standard of leaving, provides wings to their dreams.

The research conducted helps to evaluate the challenges faced to gain this financial assistance by various financial institutes through different schemes launched in the name of women, stating that these schemes are designed for development of women.

Indian women have to go a long way to achieve equal rights and position because traditions are deep rooted in Indian society

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