Creating an Enabling Environment for Women s Economic Empowerment Through Entrepreneurship in India Opportunities and challenges faced by women entrepreneurs in India 19 February 2013 Federation House, New Delhi
Overview Research purpose and activities Key Findings: opportunities and challenges Recommendations
Women Entrepreneurship- includes Self Employment and Enterprise Creation (traditional or non-traditional) in all stratas of our society (rural and urban). Women Enterprise creation provides new employment and avenues for economic independence for women. There is an increase in effort for enhancing the creation of Entrepreneurs. This development process now needs to include more women also. The trends have slowly changed but in relation to the total population, women entrepreneurs still constitute less than 15%. 3
The National Mission for Empowerment of Women (NMEW) established 2010: To strengthen the inter-sector convergence and To coordinate women s progress with the socio-economic development programmes across ministries and government departments To facilitate growth in women Entrepreneurship by providing enhanced access to service providers including Business Development Services and Financial Service Providers. 4
Review of existing situation of women entrepreneurs with regards to entrepreneurship in India. Identify critical success factors, processes and issues that impact women entrepreneurship. Findings that will contribute to understanding the process of enterprise creation by women and which could lead to a cascading effect How to create enabling environment to help State and national-level stakeholders identify strategy to influence positive change for women to become entrepreneurs
Data and literature review Secondary data analysis Focused discussions Desk Research Research Activities Survey of 63 (out of 600) women entrepreneurs (stratified random samples) from 14 states of India Case Study Survey In-depth focused interview of 6 women entrepreneurs 6
Women owned enterprises are 14%.
8
Key Findings The way they impinge Women Entrepreneurs Regulatory Policies Promotional Policies Credit Policies Representational Policies Further Classified Women Specific 100% for women Pro women 30% to women Gender Neutral For men and women
These institutions undertake a variety of activities: Credit, Business skills training, Technical Training, Marketing services, Legal assistance Institutions Classified Regulatory Promotional Credit Representational Revenue collection Registration Government sector Few non-government sector Main stream financial institution Community based organisations Federation (women) Woman associations Various laws and taxes Promoting training & Technology Chamber of commerce All Gender Neutral Gender Neutral & Specific Few schemes for women Gender Neutral & specific
Major Findings: Policy & Programmes Support No dearth of policies and credit schemes for MSMEs & others. But women entrepreneurship development is a marginal category with a scattered approach (food processing, handloom, handicraft, cottage industries) Awareness of existing program/credit schemes and support does not reach out to all (urban/rural) BDS & Policy institutions do not have any awareness building mechanisms. The policies have shifted from welfare to development to empowerment approach. 11
Socio-Economic and Cultural Background Regulatory & Legal Framework Quality & Coherence of Government Policies Structural Changes of National Economy MSMEs Institutional Framework Infrastructure & Human Resource Base Degree of Market Development
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 13
Key findings: Primary Survey Demographic Profiles Enterprise Profiles Enterprise Management, Challenges and Peculiarities a) Conception b) Inception c) Operation
Demographic Profile 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
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.
Trends: Men Vs Women Men Women 17
95% Proprietorships in rural areas 94% Women created their own enterprises 6% inherited the business
Turnover Less than 10 Lacs 10 Lacs to 25 Lacs 25 Lacs to 2 Crores 5 Crores and above 40% not responded
Employment generated 83% 43% 17% Have full time employees Have part time employees Have family support 20
Reasons for Business Start-up Conception 46% start business to prove to self and society 41% started business for economic needs Majority (78%) sought support from family 8% from Business Mentors 5% from institutions/agencies
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
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) 23
Challenges in Finance Arrangements 43% faced Procedural Problems 50% availed finance information from family and friends Challenges in credit procurement Sources of credit information 8% faced Gender Problems Only 14% availed finance information from banks 24
Managing production, services and planning Inadequate working capital Marketing management and Development Efforts Errors in Marketing Strategies Poor Accounting, Costing & Record Keeping Cultural perceptions & bias against women entrepreneurs
Inappropriate product selection Poor Technical Awareness Absence of Market/Data Analysis Poor Investment Decisions Low Equity Base
The cultural pull of traditional process of rigidly defined roles and its norms and expectations for women is very strong in India. Competencies required for successful entrepreneurship are similar for both men and women: Need for achievement, independence, goal setting, self confidence and problem solving, etc. Major problems Women face are classified as operational and socio-cultural. Maximum issues are found under the socio-cultural category. Behind most successful women entrepreneurs there is strong family support. Women in general are yet not aspiring towards entrepreneurial career.
BDS Support and cooperation, information about changes and relaxations in government policies, various schemes and grants for women entrepreneurs found missing Many challenges and constraints for women entrepreneurs can not be addressed with one single intervention The government sponsored development activities have benefited only a small section of women The potential for developing Women Entrepreneurs is very high
Role of Government: Initiatives by government needs special focus for women for regulatory, promotional, credit and representational policies at national level National policy implementation process should include : specialized promotion, proper execution and built-in monitoring strategy Policies for women entrepreneurs need to change from piecemeal approach towards a comprehensive & integrated approach
Government Policies should also incorporate the interests of women entrepreneurs as also provide in timely manner, address gender concern, along with providing infrastructure facility, training, ensuring availability of credit for fixed assets and working capital Need to periodically evaluate the impact of policies on success of women owned business Marketing assistance and awareness Creation to participate in local, national international exhibition and trade fair to have a wider reach. Encouragement to collaborative marketing initiatives such as the pioneering Micro Marketers Galaxee cluster marketing services FLO, civil society and government organizations to spread information about policies, plan and support
Role of Financial Support Providers Commercial Banks lending for women entrepreneurs should be increased to 15% of total lending with more working capital assistance and interest subsidies Easier terms for listing on SME exchanges in the case of women enterprises Micro credit support system at local level should be made available Initiate women s cell in all branches of all National Banks to provide specialized assistance
Role of Business Development Service Providers (BDS) Periodic awareness of regulations by publishing laws regarding women entrepreneurs in local languages too Organised open forums of various regulatory departments (excise, license, registration, industrial schemes, tax department, directorate of Industries) should be held more frequently to create conducive environment Network for women entrepreneurs should reach out to state/district level to represent rural small town
Media needs to be pro-active to facilitate mass awareness by publicising success stories of women entrepreneurs Capacity building (need-based training in product selection, market and investment information in management and behavioural skills and competencies) should be offered at informal training at school, college, university and in civil society institutions Constant handholding and operational guidance at the local level through incubation agencies and similar support systems such as FLO Technical Skills and Vocational training by government and private institutions should combine business training also. Awareness programs on women entrepreneurship be conducted on mass scale at village, district and state for all strata of women regularly Develop various access channels for market and technology upgradation.