Woman in MSME Part III

PART III

She Climbs to Conquer

She Climbs to Conquer
Part 3

171

The Woman in the MSME

Chapter IX
Opportunities for Women Entrepreneurs

The growth in the role of women comes in many forms: increased la-
bour force participation generally, reduced discrimination and wage
differentials that encourage greater effort, improved advancement prac-
tices that promote talented women into leadership and managerial
roles, and the similar. Thus empowering half of the potential work-
force has significant economic benefits beyond promoting gender
equality. (Duflo 2005, World Bank, 2012). This growth stimulus is
particularly true for female entrepreneurship and economic dynamics
that entrepreneurship promotes. Favourable incumbent industrial con-
ditions increase the subsequent relative rate of female entrepreneurship
and business ownership. Higher relative rates of female entrepreneur-
ship closely follow upon industrial structures with existing female
owned businesses. Economic exchanges among businesses are consis-
tent with hypotheses of the importance of existing business networks
for promoting female entrepreneurs.

Relative rates of female entrepreneurship do not appear to be strongly
linked to the population or to the industry’s overall employment levels,
although relative female entrepreneurship rates do decline with popula-
tion density. More strikingly and relevant for policy makers, better lo-
cal infrastructure strongly connects with higher relative female entry in
both manufacturing and services. Local education and female literacy
rates further matter for service entry. Stricter labour regulations are
also associated with higher rates of female entry.

Despite many economic advancements since liberalization began, the

172

She Climbs to Conquer

role of women in the Indian economy still lags well behind that of ad-
vanced economies. The benefits of economic growth generated by a
handful of modern industries do not necessarily trickle down to those
business sectors where the largest proportion of the population is en-
gaged, and not at an acceptable pace. Cross country data from the
World Bank Entrepreneurship Snapshots find that India’s rate of entre-
preneurship is lower than what its stage of development would sug-
gest; similar comparisons also highlight that India’s gender ratio is
lower than its peers. This dual under performance has cultural and eco-
nomic antecedents, but it is starting to change. Women are making
economic gains in the Indian economy, and further progress represents
a tremendous growth opportunity for the country. (Ghani et al., 2012)

Most Least Developed Countries (LDCs) and sub-Saharan African
countries are characterized by a polarized industrial system of a hand-
ful of large enterprises—owned by either the state, foreign investors or
a few rich local entrepreneurs—and a large number of micro enter-
prises, mostly in the informal sector. Only a few of these businesses
have the capacities to respond to the emerging opportunities from the
export sector and the changing international economic regime. Micro-
and small-scale enterprises (MSE) are affordable and manageable by
rural people. They create a large number of non-farm employment and
income opportunities in relatively poorly developed areas and require
small capital and little sophisticated managerial and technical skills.
MSEs are also the seedbeds for a broad development of the private
sector throughout the country, forming the foundation for the national
economy and social development at the grassroots. Individual entrepre-
neurs are a driving force for competitive MSEs as a growth base. How-
ever, the policy and institutional framework needs to be conducive to
encouraging entrepreneurial initiatives. Human capabilities and the
right institutional framework are necessary conditions for entrepre-
neurship to flourish, particularly in rural areas.

173

The Woman in the MSME

Women are generally seen as home makers with little to do with econ-
omy or commerce. In Modern India, more and more women are taking
up entrepreneurial activity especially in medium and small scale enter-
prises. Even as women are receiving education, they face the prospect
of unemployment. The role of women entrepreneurs is especially rele-
vant in the situation of large scale unemployment that the country
faces. The modern large scale industry cannot absorb much of labour
as it is capital intensive. The small scale industry plays an important
role absorbing around 80% of the employment. The myth that women
cannot engage in productive employment needs to be dispelled. They
can be encouraged to set up small and medium scale industries on their
own initiative. Entrepreneurship development for women has been rec-
ognized as an important factor in economic development of India.

In this background, self employment is regarded as a cure and means
to generate income .The Indian government recognizes the need for
women to be part of the mainstream of economic development.
Women entrepreneurship is seen as an effective strategy to solve the
problems of rural and urban poverty.

While participation of women in business is constantly increasing,
there is still a lower rate of female participation in entrepreneurship,
indicating that some gender discrimination still continues. Despite
clear evidence of an escalation in entrepreneurial activity by women,
females are still only half as likely as men to start a business and entre-
preneurship continues to be a male domain.

The Micro Small and Medium Industrial Enterprises (MSMEs) is a
gender sensitive sector where we have women entrepreneurs as well as
women workers. This sector is a soft option for women as they gener-
ally have lower capital base and technical know- how. It also gives
them more flexibility in terms of working from home and makes fewer
demands on them by way of time, because women are time-poor as
they have to look after their households too.

174

She Climbs to Conquer

Women entrepreneurs in India are handicapped in the matter of orga-
nizing and running businesses on account of their generally low levels
of skills and for want of appropriate support systems. The transition
from homemaker to sophisticated business woman is not that easy.
Yet, women across India are showing an interest to be economically
independent. Women are coming forth to the business arena with ideas
to start small and medium enterprises. They are willing to be inspired
by role models- the experience of other women in the business arena.
In the 1950s, only those women who had no male income earners
within their family became income-earners on their own account. In
1960s, women bean to start small enterprises at or attached to their
homes. Most of these activities were for self occupation or at best for
partial family support, and not for achieving financial autonomy. By
1970s, income generation and career choices became equally important
for many women. In entrepreneurial roles, women increasingly wanted
their enterprises to grow and succeed. They often joined their male
family members as contributing partners on an equal footing. The
1980s saw them making personal choices, standing up for their convic-
tions and demonstrating courage to make new and independent begin-
nings. The following decade was marked with a greater sense of liber-
alization where women were ready to live alone, travel alone and to
rear children alone if male support was not forthcoming. The progres-
sively strengthening attitudes towards independence and self confi-
dence women are poised to grab more opportunities to build enter-
prises. They are already coming forward to the business world with
ideas to start small and medium enterprises. They are willing to be in-
spired by role models—experience of other women in business– which
is still in short supply.

Conceptualizing High Potential Female Entrepreneurship
Entrepreneurship encompasses a broad range of activities, including
the identification of opportunities, creation of organizations, carrying

175

The Woman in the MSME

out of new combinations of methods, products, supplies or markets and
the bearing of uncertainty. As such, an entrepreneur is not a person
who is narrowly specialized in or wedded to one way of doing things.
Wheelen and Hunger identify an entrepreneur as some one who has :
1) the ability to identify potential venture opportunities better than

most people;
2) A sense of urgency that makes them action-oriented;
3) A detailed knowledge of the keys to success in the industry, and

the physical stamina to make their work their lives and\
4) Access to outside help to supplement their skills, knowledge and

abilities (2002 pp. 312-313) Other studies saw achievement mo-
tivation, inner strength, the propensity to take risks and boldness
to challenge the status quo as critical for entrepreneurial success.

It is often postulated that the entrepreneur’s motives for launching a
venture are a key element in predicting small business performance.
Morris et al. (2006: 228) suggest,“…motivations for starting a venture
would seem an important determinant of growth aspirations, as those
who are motivated by the desire to get rich or to meet a challenge
would seem more in growth than those motivated by discrimination or
a desire for personal expression”. Individual motivations and goals like
profitability, revenues and sales growth have been found to be related
to performance in women owned businesses, albeit their alleged ten-
dency to perform less well than their mal counterparts. Researchers
find that women typically are motivated by a more complex set of ob-
jectives for starting business than male counterparts. Factors related to
the desire to achieve flexibility between work and family lives are val-
ued differently by the genders.

Machado, Cyr and Mione (2003) suggest that women entrepreneurs’
managerial styles with the variables such as a) planning and strategic
choices; b) decision style; c) formulation of objectives; d) structure of
the company and the share of power and e) human resources policies

176

She Climbs to Conquer

were linked to and had association with their performance.

Fifty four female entrepreneurs in Greater Sudbury, Canada, were in-
terviewed in 2009 to determine the motives for self employment, suc-
cess factors, and the problems they perceived. Results revealed that
primary reasons for owning a business were personal satisfaction and
growth, to have fun and to proving they could do it. These results show
that Canadian female small business owners were driven by intrinsic
factors as opposed to monetary motives. In terms of business success
variables, the most important to them were the entrepreneurs’ reputa-
tion for honesty and good consumer service. Serious problems faced
by Canadian women entrepreneurs were the weak economy, high
business taxes and the non-availability of skilled manpower. Results
on success factors and problems were consistent with those from previ-
ous studies using similar instruments both in Canada and other coun-
tries, including Turkey. While intrinsic rewards characterized Cana-
dian respondents’ motives, Turkish entrepreneurs were primarily
driven by economic considerations, strengthening the view that in
poorer economies entrepreneurship, both male and female, is driven
more by monetary motives.(Robichaud et al., 2009). Poorer women opt
for entrepreneurship as a livelihood exercise rather than as a means of
intrinsic self satisfaction. While industrialized economies exhibit more
advanced economic diversification policies and business infrastructure,
the developing nations only provide the minimum basic conditions
necessary for job creation or business start up. This explains why en-
trepreneurs in richer countries focus more on opportunities and intrin-
sic motivations while those from poorer countries tend to be more ne-
cessity and income driven.

In the economic sector, enterprises play a key role in creating produc-
tive and decent work that contribute towards social aspirations of
women. In the case of MSME development, the promotion of gender
equality and sustainability requires emphasis on gender- equitable sup-

177

The Woman in the MSME

port to informal entrepreneurial sectors, especially in relation to their
transition to the formal economy.

The conditions and characteristics that lead to 'high potential' female
entrepreneurship occur on multiple levels. Female entrepreneurs, like
their male counterparts, are influenced by the general business envi-
ronment where they live. If the general business environment is unsta-
ble or the procedures for starting, running and exiting a business are
highly regulated or bureaucratic, that would act as a disincentive for
male and female startups alike. But in some cases, formal institutions
or cultural conditions create additional barriers for women that make it
more difficult to start or grow a business enterprise. Such conditions
can include diminished legal rights (either for all women or with re-
spect to rights that a woman may give up when she marries) or restric-
tions to a woman's activities outside home or her ability to travel
within or outside her community, or country. This combination of gen-
dered attitudes, social norms and beliefs can result in limited access to
resources critical for development such as education, skills and fi-
nance.

Most people who become self-employed start by using their existing
skills and talents, their previous experience and training and the re-
sources available in a new way. The danger is that the types of busi-
nesses they develop tend to mirror the local economy and where that
economy is poor, they are frequently marginal in their viability. Many
young people have a perception of self-employment as offering a
greater freedom than working for others, and greater rewards. Enter-
prise that is ‘business-like’ is also seen as a ‘good’ thing for communi-
ties and neighborhoods because it can lead to the provision of new ser-
vices, especially those that are marginally viable or commercially non-
viable. Initiatives such as credit unions and skill-swap schemes have
explored ways of retaining wealth within a community but have also
expanded concepts of enterprise beyond wealth generation or retention

178

She Climbs to Conquer

to ‘trading’ commodities such as talents, skills and resources.

Attitudes also play a crucial role in forming opinions that create a
country's 'entrepreneurial culture,' meaning how the general population
views entrepreneurial endeavors, risk assessment, and acceptance of
business ownership as a viable career option. This cultural environ-
ment in turn influences individual opportunity recognition and willing-
ness to take the risk to start a new venture.

The interaction between five layers, viz. Institutional Foundations,
Gendered Institutions, Gendered Access to Resources, Entrepreneur-
ship Culture and High Potential Female Entrepreneurship Characteris-
tics is captured in the Gender-GEDI conceptual model based on an
analysis focusing on seventeen countries. The model places the United
States in first place followed by Australia, Germany, France and Mex-
ico. Rounding out the top ten are the United Kingdom, South Africa,
China, Malaysia, and Russia.

Reviewing the results of this first pilot Gender-GEDI analysis, includ-
ing the scores of the countries with respect to the indices and sub indi-
ces, leads to the following overall points:

 There is no single determinant or silver bullet for fostering
'high potential' female entrepreneurship;

It is interesting to note that whereas several high-income, developed
coutries show clearly lower scores for the Entrepreneurial Environ-
ment sub index (Germany & Japan), a number of developing and mid-
dle income countries have their highest scores in the Entrepreneurial
Environment sub index. This indicates a greater receptiveness in terms
of opportunity recognition and skills to start new ventures.

 Filling the female startup education gap is an important area
for improvement for many countries;

The percentage of highly educated women (those that have participated

179

The Woman in the MSME

in some form of post-secondary education) is increasing, but in many
countries, they are not choosing to become entrepreneurs. In fact, in
some countries the percentage gap of the highly educated female popu-
lation is 20% or greater than the percentage of highly educated female
business owners. (Brazil and Morocco - 45% difference, Malaysia 29%
and China 31%. However, in the top Gender-GEDI performers, the
education gap is reversed: More female entrepreneurs are highly edu-
cated compared to the overall percentage for the female population.
(US, Australia, Germany and Russia, a middle range performer (which
has the highest percentage of highly educated female business owners
out of the 16 other countries in the sample). Higher education not only
provides high potential female entrepreneurs with the skills needed to
grow their businesses, but also broadens their networks, another criti-
cal factor for high potential female entrepreneurship success. In some
countries, the low share of highly educated female entrepreneurs is
striking. Malaysia, ranked in 9th place, exhibits the highest percentage
of opportunity driven female entrepreneurs (85%) but at the same time,
has a low percentage of female business owners who are highly edu-
cated (29%) in comparison with the overall female population (57% of
whom are highly educated). The desire to exploit an entrepreneurial
opportunity is high amongst the less educated female population. How-
ever, the abilities in terms of skills, networks, access to resources, etc.
are absent or inadequate restricting their growth and entrepreneurial
aspirations to a subsistence level small-scale business. In contrast, in
France, the majority of the female population believes that entrepre-
neurship is a good career with good status. The percentage of highly
educated female entrepreneurs in France is less than 45%.

 Economic development alone is not enough to foster high po-
tential female entrepreneurs;

The general relationship between a country's overall Gender GEDI In-
dex score and per capita GDP level shows that lower income countries

180

She Climbs to Conquer

receive lower Gender-GEDI scores while higher income countries re-
ceive higher Gender-GEDI scores. Japan, the United Kingdom and the
United States are all high income countries with relatively strong insti-
tutional foundations in terms of overall stable and liberal business en-
vironment; their Gender-GEDI ranks vary much. Out of 17 countries,
the US is ranked the first, the UK the sixth and Japan the twelfth. Ja-
pan has the lowest levels of opportunity recognition among women,
skill level for startups and status for entrepreneurship. In addition, Ja-
pan has the lowest percentage of female managers in the 17 countries
sample.

 Business formalization is important for successful, scalable
enterprises – especially with respect to improving access to
capital;

Access to a formal bank account is critical for high potential female
entrepreneurs, especially since it's a necessary precursor to financing–
bank loans, credit lines, etc.—that will fuel their growth. But in many
parts of the world, few women have bank accounts, most notably in
Egypt (7%), Uganda (15%), Mexico (22%), India (26%), Morocco
(27%) and Turkey (33%). In contrast to this in the top performers, such
as in Germany, Australia, the UK, Japan and France the percentage of
women with bank accounts is close to 100%. Formal financing is espe-
cially important for female entrepreneurs, who tend to have less per-
sonal capital to invest in their businesses.

 Business freedom (meaning removing legal and regulatory
impediments to growth) is a necessary condition for a vibrant
entrepreneurial economy;

When focusing on high potential female entrepreneurship, the general
business environment cannot be overlooked. The Gender-GEDI Score
takes into account female/male total entrepreneurship activity ratios
(the share of adult women engaged in business ownership divided by

181

The Woman in the MSME

the share of men so engaged) with the general business environment in
terms of ease of starting, running and exiting a business (represented
by Business Freedom and compiled by the World Bank) and Business
Risk (assessing the overall business environment and climate compiled
by Coface).

There is a high ratio of female/male total entrepreneurship activity in
Brazil, Uganda and Malaysia, although the business environment has a
greater regulatory burden. This can lead to more female entrepreneurs
choosing to not formalize their operations (which can stunt their
growth) as well as fewer businesses surviving or even making it
through the startup phase. Countries with the highest levels of business
freedom – such as Australia, the US and Germany – also display rela-
tively high ratios of female/male total entrepreneurial activity.

In many cases, Business Freedom and Business Risk have a similar
tendency, yet there are exceptions such as is the case for Malaysia,
South Africa and India. Between the two, Business Freedom would
appear to have a greater effect on high potential female entrepreneurs,
since it focuses specifically on business related regulations.

 Social norms are a frequently-hidden barrier: lifting the cul-
tural veil that can restrict a woman’s entrepreneurial vision
is critical to unleashing female entrepreneurial potential.

Social norms impact the general societal support for women as entre-
preneurs, which affect (a) the decision to take the risk of becoming an
entrepreneur; (b) as their leadership development as decision-makers
and (c) the range of occupations women may occupy – all of which
may act to either impede or encourage the development of high poten-
tial female entrepreneurs.

With respect to pre-entrepreneurial career development, US leads with
the highest percentage of female managers (43%), followed by France,
Germany, Russia and Brazil, with more than 35% female managers.

182

She Climbs to Conquer

Access to higher education forms the foundation for high potential fe-
male entrepreneurship but management experience provides women
with additional skills, experience and networks that facilitate female
entrepreneurship success. But, for a sizeable group of countries in the
sample, the pool of female managers is very small. The lowest percent-
age is in Japan (9%), followed by Turkey (10%), Egypt (11%) and
Morocco (13%).

In no country are females considered as good as male executives al-
though greater proportions of men believed that men make better busi-
ness executives than women. However, Less than 20 % in Egypt and
less than 50% in India of both men and women disagreed with the
claim while a larger proportion of women in Morocco, Malaysia, Rus-
sia, South Africa and Turkey disagreed with it than men. The opinions
expressed are indicative of biased attitudes towards women in posi-
tions demanding decision-making and leadership capabilities such as
high potential female entrepreneurs.

Worldwide, women receive less outside funding for their businesses
than men. But the gap becomes even more apparent for high potential
female entrepreneurs in need of greater amounts of risk capital typi-
cally provided by Venture Capital (VC). Comparative, sex-
disaggregated data on VC funding is not widely available. But for the 7
countries for which data was available, men still dominate the top
management positions in VC investments firms, and in some cases,
such as Japan, women are almost entirely missing. Other non-
traditional forms of funding such as crowd funding may provide high
potential female entrepreneurs with an alternative source of startup and
growth capital but this is not yet a viable option in most countries.

Furthermore, social norms regarding care responsibilities (especially of
children) can hinder women's advancement as leaders and decision-
makers even in spite of seemingly female-friendly employment op-
tions. A recent study suggests there is a 'tradeoff between some poli-

183

The Woman in the MSME

cies that make it easier for women to combine work and family and for
women's advancement at work. Specifically, countries with greater
availability of work flexibility and part-time options often have greater
female labour force participation but also tend to have fewer women in
higher-level (especially management) positions. One of the reason for
this is that women tend to choose more flexible options and the other is
that employers cannot judge the suitability of such women as they can-
not forecast who are likely to use these options and when. In the US,
where flexibility and part-time options are virtually non-existent,
women's labor force participation is lower but the percentage of
women in management positions is one of the highest in the world. At
first glance, it may seem that family-friendly policies are hurting
women's career advancements; it is argued that the social norms and
gendered expectations result in the vast majority of women choosing
flexible work options. Social norms may also exert a similar influence
on the development of high potential female entrepreneurs.

Conclusions of the Study :
 The Gender-GEDI's analysis shows that there is no obvious

singleweakness that impedes high potential female entrepreneur-
ship development and most countries are confronted by their
own unique combination of factors. For some countries, the ini-
tial course of action is obviously to remove the legal restrictions
that do not allow women the same opportunities for employment,
work hours and freedom of movement outside the home. For oth-
ers, iy may be increasing women's access to both SME training
programs and to finance.

 The more subtle but insidious influence of social norms needs to
be addressed in order to make way for improvements in women’s
participation in the labor force, women's representation as man-
agers, and female graduates with a degree in science in order to

184

She Climbs to Conquer

achieve a larger, more educated and better skilled pool of women
from which high potential female entrepreneurs will emerge.

 To harness women’s untapped capabilities and thus the full po-
tential of a country’s human capital, it is critical to eliminate the
gendered institutions and gender-based barriers that exclude a
large proportion of women from entrepreneurial pursuits. Those
countries that can change the cultural norms that undermine a
woman’s ability to become skilled, educated and confident will
benefit most as they see high potential women pursue their entre-
preneurial ambitions to the benefit of economy, culture, and soci-
ety as a whole.

While it is not the intention to suggest any limitation to the industries
women may undertake, there are a number of industries which offer
immense opportunities specific to the environment in which women
have to act, perform the double role of home maker and entrepreneur.
Some of such areas are:
• Eco-friendly technology
 Bio-technology
 IT enabled enterprises
 Event Management
 Tourism
 Telecommunication
 Sericulture
 Floriculture
 Herbal & health care
 Fruits & vegetable processing

They need a much sophisticated approach including managing workers
of their own kind and meticulously observing production and business
norms, particularly in multi-tasking and multi disciplinary environ-
ment.
While it is not the intention to suggest any limitation to the industries
women may undertake, there are a number of industries which offer

185

The Woman in the MSME

Table 9.01 :
Composite Table of Rankings, Percentage of Female Manag-

ers and Men Among Top Managers in the VC Investment
Firms

Rank Country Percentage of Percentage of Men
Female Managers Among Top Managers

of VC Investment
Companies

1 U.S.A 43 81.7

2 Australia 37

3 Germany 38 78.7

4 France 39 74.9

5 Mexico 31

6 U.K. 35 83.9

7 South Africa 30

8 China 17 86.8

9 Malaysia 24

10 Russia 37

11 Turkey 10

12 Japan 9 97.9

13 Morocco 13

14 Brazil 36

15 Egypt 11

16 India 13 90.9

17 Uganda 33

Source : Gender-GEDI Executiv Report, 2013

186

She Climbs to Conquer

Box 9.01
The Tupperware Model

Shared value is not social responsibility, philanthropy or even sustainabil-
ity; but a new way to achieve eco-
nomic success. It is not on the margin
of what a company does but at the
center.
Tupperware has taken India by storm
through their all women network.
They are selling everything from the
“roti keeper” (for Indian bread) to the
“masala box” (for spices) to “Idli
steamer” (steamed rice cakes – staple

diet in south India) designed especially for the Indian market in major cit-
ies and villages alike. Tupperware is today a prominent player in India’s
direct selling category. Through this, Tupperware India has been able to
offer a common home maker and working women alike a business oppor-
tunity at her doorstep. The Tupperware business opportunity not only em-
powers women by giving them financial independence, but also provides
systematic training and support thus making them more confident indi-
viduals. The Tupperware philosophy believes in empowering women and
goes on further to encourage these empowered individuals to spread this
confidence by empowering more women.

Anshu Bagai, Marketing Director, Tupperware India comments, “the other
part of Tupperware is Women Empowerment which is very deeply in-
grained in the DNA of Tupperware. Being a direct selling organisation, we
have an all-women sales force where a lot of them come from a very sim-
ple background but go on to achieve big things in life. They not only earn
money which helps them to support their families, but the exposure they
get when they join Tupperware makes them far more confident individu-
als.”

An open question is :
“Can MNCs entering India take the lead in bringing business and society
back together and help them progress together?”

(Neishaagharat, 2013)

187

The Woman in the MSME

immense opportunities specific to the environment in which women have to act,
perform the double role of home maker and entrepreneur.
Some such areas are:
• Eco-friendly technology
 Bio-technology
 IT enabled enterprises
 Event Management
 Tourism
 Telecommunication
 Sericulture
 Floriculture
 Herbal & health care
 Fruits & vegetable processing

They need a much sophisticated approach including managing workers of their
own kind and meticulously observing production and business norms, particu-
larly in multi-tasking and multi disciplinary environment.

Service Enterprises—Changing Trends – A field Response

The character of a number of micro enterprises has undergone a radical change,
both in the rural sector and the urban sector. A short survey of about a hundred
and fifty new entrants in business during the last three years in Thiruvanan-
thapuram, Kollam, Kozhikode and Chennai was conducted to ascertain the
trend of service enterprises. The respondents belonged to different groups such
as gulf returnees, rural to urban migrants and static rural and urban population.
The general impression gathered is that some kind of a polarization has taken
place in respect of the enterprises concerning production and retailing systems.

What was once considered as service enterprise due to its characteristic involv-
ing less material input and more human labour, has now bifurcated into clear
streams of production and retailing or service. This tendency is more visible in
the case of gulf returnees who had experience as cooks and are therefore good
producers, restaurant owners and supply side workers. Others both migrants
from rural areas as well as city dwellers follow suit having learnt from their

188

She Climbs to Conquer

counterparts in Tamilnadu or from the gulf migrants.

Table 9..02

Trends in splitting Micro level Enterprises

No. of units in the sample Average
frequency
Thiruva- Kollam Kozhi- Chen- Total of supply
nan- 2(15+) kode nai
thapuram
Bake houses 3(15+) 5(25+) 13(65+) Thrice a
3 (10+) 4(30+) 10(70+) week
4(20+) 13(48+)
Sweet & savories 2(10+) 2(15+) 2(15+) Thrice a
Makers 2(8+) 3(10+) week

Fast Food makers 4(10+) Twice a day

Photo processors 1(25+) 1(40+) 2(65+) Daily

Garment Makers 3(5+) 2(6+) 3(5+) 4(10+) 12(26+) After sales

Total suppliers 13(11+) 8(12+) 11(13+) 18 50 Frequency
(26+) (274+) of pay-
Bakeries 6 (3) 5(2) 5(4) ments
Lala Sweetshops 5(3) 3(3) 4(2) 12(4) 28(13)
Fastfood outlets 7(2) 5(2) 5(3) 10(6) 22(14) Weekly
8(6) 25(13) once or
twice

Daily

Photo studios 4(2) 3(2) 3(2) 5(4) 15(10) Various

Textile Units 5(5) 4(2) 2(2) 7(4) 18(13) After Sales

Total retailers 22(15) 16(11) 17(13) 35(24) 108(63)

Figures in brackets indicate the average number of buyers per supplier and the total number
of suppliers the retailers in the sample deal with.

Bakeries and restaurants used to manufacture food items and sell them at their
own joints. Bread and biscuits are no longer produced by the traditional bakery
cum shop enterprises as these have already been taken over by medium and
large enterprises. What is left out is cakes, pastries, snacks, sweets and savories.
The tendency among the new entrants in bakery business is to procure prepared
food items from wholesale producers and to sell them through their outlets. The

189

The Woman in the MSME

producers prepare them at home or in specially hired kitchen. In Thiru-
vananthapuram alone there were more than forty such producers, some pro-
ducing various sweet meat items like laddu, mysorepak sweet boli, jahangiri
jilebi, cakes and pastries, and other items like biriyani, idyappam, appam,
short-bites, and vegetarian and non-vegetarian curries. The producers do not
bother themselves with retailing. Retail sales takes place at food parks and
joints where the food is instantly available and at best requires slight warm-
ing. One of the reasons for this development is said to be the recent tougher
attitude of Panchayaths and Municipalities in enforcing hygiene. The retail-
ers are saved of the difficulties in keeping their premises free from wastes
as the food waste generated is minimal. Certain producers even arrange to
collect the waste and dispose it along with theirs which is in larger quanti-
ties. Ironically, most of these producers, are incognito and invisible to the
municipal health inspectors as they are not all licensed businesses.

The garment making area is also getting skewed to a similar system where
groups of three to five women join together to produce various garments for
women and children, mostly in the informal sector, and supply the same to
neighbouring textile shops in contrast to the extant system of stitching for
individual customers on order.

Many Photo studios no longer do the processing and printing, which is done
at larger and more sophisticated processing units.

Similarly, small printing units have also disappeared due to the availability
of inexpensive electronic printing devices. These new economy enterprises
undertake multiple jobs such as binding while tasks like composition, font
setting and proofing are done by the client before approaching the printer.

Producer establishments in food items and garments can be organized in ru-
ral areas by setting up mini clusters, including kitchen blocks, slaughter
houses for chicken, goats and buffaloes with common waste disposal facili-
ties for supply to nearby urban and semi-urban areas. They can also have
dispensation sized packaging facilities like aluminium foil cassarols, plastic

190

She Climbs to Conquer

cans and tetra packs, where there is a rural – urban continuum with short and
quick commutation facilities. More than 80% of the retailers suggested estab-
lishment of kitchen batteries with common facilities for bulk packaging of food
items as practiced in the gulf countries, as the restaurants already have begun
using water heated dish-display cum serving utensils into which the bulk supply
bags are emptied.

Other areas suggested by the respondents for consideration included cleaned,
cut and packed vegetables, poultry segregated into breasts, wings, drumsticks,
liver etc, boiled and sliced eggs, denerved and cleaned prawns, and cleaned and
cut fish and squid ready for cooking, fresh fruit and vegetable juices. These
units can be established in clusters adjacent to farms, poultry farms, fishing har-
bours etc. which are invariably in the rural areas. The major advantage from the
rural economy point of view is that, on one hand, unlike expensive canning sys-
tems, they are less expensive and meet the daily needs of the bulk of the con-
sumers with fresh supplies and on the other ensures self-employment and jobs
for the rural society, most particularly for the rural women.

When established on these lines the units can also aspire to have a good growth
potential. The Local governments and NABAD can identify wet and dry prod-
ucts which can be produced in the rural area for ultimate consumption in the
easily accessible urban and rural areas. The prime need is to provide appropriate
encouragement by way of business friendly attitude of LG administration, pol-
lution control, local politicians and provision of adequate infrastructure facili-
ties including water, electricity, cold room and waste disposal facilities. Dis-
posal of returned waste can, in turn, become another lucrative business of con-
verting the waste into compost for local use and at the same time acting as an
incentive for the buyers as it lightens their and the town’s waste disposal task.

191

The Woman in the MSME

Chapter X
Start Ups

January 2016 saw numerous announcements in favour of Startups consid-
ered as vital for the success of Make in India movement.

The Startup India Action Plan defines “Startup” as an entity, incorporated
or registered in India not prior to five years, with an annual turnover not
exceeding Rs.25 crores in any preceding financial year, working towards
innovation, development, deployment or commercialization of new prod-
ucts, processes or services driven by technology or intellectual property;
Provided that (1) such entity is not formed by splitting up, or reconstruc-
tion, of a business already in existence; (2) an entity shall cease to be a
Startup if its turnover for the previous financial years has exceeded INR 25
crore or it has completed 5 years from the date of incorporation/ registra-
tion and (3) a Startup shall be eligible for tax benefits only after it has ob-
tained certification from the Inter-Ministerial Board, setup for such pur-
pose. The Inter-Ministerial Board setup by DIPP would validate the inno-
vative nature of the business for granting tax related benefits.

The Startup India Action Plan has stated that only Private Limited Compa-
nies, Limited Liability Partnership and Registered Partnerships are eligible
for the Government schemes. Those registered even before the announce-
ment are eligible and it is best for Entrepreneurs starting a new busi-
ness henceforth to register a Private Limited Company or Limited Liability
Partnership or Registered Partnership. Obviously individual entrepreneurs
are not considered as startups, with the result that a majority of MSMEs
will be left out even if they qualify otherwise.

A business is considered to be a startup under the Startup India Action Plan
if it aims to develop and commercialize a new product or service or proc-

192

She Climbs to Conquer

ess; or a significantly improved existing product or service or process,
that will create or add value for customers or workflow.

Further, in order to be considered eligible, the Startup should be

 Supported by a recommendation (with regard to innovative na-
ture of business), in a format specified by DIPP, from an Incuba-
tor established in a post-graduate college in India; or one recog-
nized by GoI; or one which is part of a project funded by GoI as
part of any specified scheme to promote innovation; or

 Funded by an Incubation Fund/Angel Fund/ Private Equity Fund/
Accelerator/Angel Network duly registered with SEBI that en-
dorses innovative nature of the business; or

 Funded by GoI as part of any specified scheme to promote inno-
vation.; or

 Have a patent granted by the Indian Patent and Trademark Office
in areas affiliated with the nature of business being promoted.

The mere act of developing of products or services of the following
nature DO NOT make an entity eligible for incentives:
 Products or services or processes which do not have potential for
commercialization; or
 Undifferentiated products or services or processes; or
 Products or services or processes with no or limited incremental
value for customers or workflow.
In an effort to give a fillip to the start-up ecosystem in the country, the
government announced its intention to exempt capital gains tax on in-
vestments in start-ups and a Rs.10,000 crore fund to provide funding
support to innovation driven enterprises. Exemption of the 20% capital
gains tax has been a long pending demand of the overseas venture
capital investors who have been claiming that government is forcing
them to route their investments through Mauritius to get the capital
gains tax exemption as capital gains tax on investments from that
country is waived due to a provision in Double Tax Avoidance Treaty.

193

The Woman in the MSME

In order to provide funding support to start-ups, the government will
set up a fund with an initial corpus of Rs.2,500 crore and a total corpus
of Rs.10,000 crore over a period of four years. According to the action
plan “The fund will be in the nature of Fund of Funds (FoF), which
means that it will not invest directly into startups, but shall participate
in the capital of SEBI (Securities and Exchange Board of India) regis-
tered venture funds”.

Profits from start-ups will be exempted from income tax for three years
to address their working capital requirements. The exemption shall be
available subject to non-distribution of dividend by the startup. The
2016 budget, however, has reduced the benefit by more than half by
the introduction of Minimum Alternative Tax MAT at 18.5%. Even for
profitable companies, with MAT being applicable, the net benefit
would be 10-12% rather than a full exemption as was expected.

To encourage seed-capital investment, the government also exempted
tax above fair market value for incubators in start-ups, which is cur-
rently only available to venture capital funds. In the context of startups,
where the idea is at a conceptualization or development stage, it is of-
ten difficult to determine the FMV of such shares. In majority of the
cases, FMV is also significantly lower than the value at which the capi-
tal investment is made..

With the intention of reducing regulatory burden on start-ups so that
they can focus on their core business, they have been exempted from
six labour laws and three environmental laws for a period of three
years. Start-ups will also be provided free legal support in filing intel-
lectual property rights (IPR) and their patent applications will be fast
tracked at lower costs.

To create a single point of contact for the entire start-up ecosystem and
enable knowledge exchange and access of funding a Startup India hub
will be created. Starting April 2016, start-ups have been enabled to

194

She Climbs to Conquer

register themselves as a company in a simple procedure using an app.

To provide equal platform to startups in government procurements, the
criteria of prior experience or turnover will be exempted without any
relaxation in quality standards or technical parameters. At present, cen-
tral government, state government and public sector units have to man-
datorily procure at least 20% from the micro, small and medium enter-
prises in which now start ups can also participate. The government will
also create a policy framework for setting up of incubators across the
country in public private partnership, build innovation centres at na-
tional institutes and set up seven new research parks.

With introduction of self certification compliance and easier patent
laws, entrepreneurs will be able to spend more mind-space on innova-
tion. The move to make exits simpler is also encouraging and will en-
courage more risk taking. Apparently the policies around cleaning the
license raj will be a booster for Startup community.

While the announcements have been widely welcomed their real effi-
cacy has not been without challenge. “It is a phenomenal move by the
government which gives a strong message... as far as the action plans
are concerned, the impact and timing will be clear once the fine print is
released,” said Aashish Bhinde, executive director (Digital Media &
Tech) at Avendus Capital, an investment bank. (Live Mint 16 Jan 2016)

“While the budget gave a 100% tax exemption from profits for a block
of 3 years in the first five years of a startup, this would eventually mean
very little for the founders who hardly see any profit in the initial years.
The other proposals include exemption on capital gains, if investments
have been made in notified startups or through the government’s startup
funds. It has also called for a simpler registration process. But these
measures are not big enough to catapult any tech entrepre-
neur.” (Financial Express, March7, 2016)

Read with the findings of Minniti (2008) the real effect of the benefits

195

The Woman in the MSME

of some of the incentives offered remain to be seen. For example, the
fact that FMV of most of the start ups is below the investment indi-
cates that they are not making appreciable profits in the initial years.
This makes both exemption from taxes on income and capital gains
superfluous.

Preparation to Startup

Great emphasis is placed on Startups and many support schemes have
been initiated by the Central and State governments with a view to de-
veloping self employment as an alternative to employment generation
through paid jobs. The schemes provide for instant help via DICs and
other government agencies, though almost all of them are ill equipped
to provide any serious business development service as of now. The
support available ranges between financial assistance and help in com-
plying with various licensing and such other formalities, which include
single window facility for business registration. Far less assistance is
available in the direction of helping a start up group or individual in
choosing a line of business and evaluating its viability as a concern.

You may have your ideas about the industry you would like to enter.
Your personal inclination is a very important factor. But that alone is
not sufficient to develop it into a viable business. The very first step
required is a clear understanding of what an enterprise needs and what
resources you have at your command. The first component is provided
by various business schools, Enterprise development institutions and
their programmes and to a certain extent by the district industries cen-
tres. The second component is your own inclination and capabilities. It
is an uphill task, though achievable, to venture into something that
doesn’t interest you. You may have a few areas of interest with equal
or different interest levels or priorities. Make a list of them. You may
select each of them for detailed study and create what is known as a
business plan. See Appendix 7 to know how to create a Business Plan.

196

She Climbs to Conquer

Franchises
Management Consultants suggest that women should consider fran-
chise as a start up option for two reasons. First: they have, generally,
less spare time and limited network to undertake detailed investiga-
tions due to domestic responsibilities; second: less financial strength
and restricted mobility to make extensive explorations and research.
Franchisors being already established in their line of business can be a
good source of guidance. Franchisors would have already established
a business pattern for themselves — a brand name, a product or service
line, certain methodology for production, distribution, provision of ser-
vice— which they will share with franchisees, usually for a fee. This
would also include training and handholding. The franchisee’s job will
be to establish a unit or module of the franchisor’s business and run it
in accordance with the norms—quality, standards, pricing, process
flow and publicity modes as prescribed by the franchiser. The franchi-
sor prescriptions are broadly meant for uniformity in the operations of
their various franchisees united under a brand and value chain.

With globalization, accessibility to franchise providers have become
very easy as one can find a franchisor in any field of one’s interest al-
though most of them are concentrated in service linked areas like food
catering, health products, life style products etc. where a large element
of service and a comparatively small element of physical products are
involved. For example, McDonald and Reliance Fresh.

Sourcing for Franchise : The first step is to make a short list of busi-
nesses you are inclined to undertake. A franchisor in the selected type
of business can be searched on the internet or contacted through fran-
chisees already associated operating similar business. Franchise con-
sultants are another source of information and contact. They also assist
in negotiation, documentation and implementation.

What to expect from a franchiser: The franchiser normally provides

a. License to operate under their brand name;

b. Advice on the equipment to be procured and infrastructure to be

197

The Woman in the MSME

created;
c. Standards on qualification and experience required for the em-

ployees / workers;
d. Training for the franchisee, its partners, associates, workers and

staff as may be needed;
e. Production / Process / Service methodology and detailed proce-

dures involved;
f. Specifications regarding raw materials and finished products;
g. Output pricing models based on local cost structure, market and

competition;
h. Specific models for advertisements and publicity including the

brand logo, and ad copy;
i. Assistance in procurement of materials and supplies and
j. Advice on expansion and growth strategies.
The basic fee charged by the franchisor depends on the assistance for
start up and services provided. The franchise cost would also include
an annual payment based on the volume of business turnover or a roy-
alty on the number of units produced.
It should be noted that the success of the franchiser’s business depends
on the success of the franchisees’ businesses and, therefore, the fran-
chiser will exercise a virtual control over the manner in which the fran-
chisees conduct their business. Periodic inspection and audit are rou-
tine methods adopted besides the filing of returns.
Appendix 8 gives a note on how to select a franchiser and what a fran-
chiser looks for in a franchisee.

198

She Climbs to Conquer

Chapter XI
State Support and Encouragement

The need for Policies

Various studies indicate that Box No 11.01
women’s roles are, although
restricted, in the midst of What Right to Entrepreneurship Means
quite dramatic changes tak- Nobel-laureate Amartya Sen (1999) argues
ing place both in developing
and in developed econo- that increasing GDP by itself should not be
mies. Results of empirical the ultimate goal of efforts to help poor
and theoretical research, ex- countries. Rather, what aid should hope to
planatory models and stud-
ies exploring both forces maximize are the freedoms associated with
that challenge and those that wealth: freedom to exchange goods and
facilitate greater equality are
presented in great measures. labour, freedom to make choices and influ-
The literature covers issues ence one’s life, freedom to live longer, free-
in gender inequality and dom to get an education. He suggest that

restrictions on an individual’s right to own
property, save, borrow, become educated,

make labour contracts or to control the
products of one’s own labour would qualify

as disincentives to growth, while freedom
to exercise these activities would be associ-
ated with economic growth.

economic development as

they relate to: values and

religion, cultural restrictions and roles, legal and inheritance laws and prac-

tices, education of girls, resource allocation within marriage patterns, la-

bour market access, education, fertility, gender specific market failures in

finance, and power in the political decision making. The findings are com-

patible with the long term trends in women’s roles that stem from techno-

logical improvement, as industrialization has made extensive home based

production obsolete, and reduced the demand for children. It can be argued

that greater gender equality would be rather a consequence than a cause of

199

The Woman in the MSME

development. However, gender equality does not seem to follow auto-
matically from development; hence there is a need for active policies.
(Mikkola and Miles, 2007)

Box 11.02
Supporting Entrepreneurs and the Self Employed

European Union Initiatives
Entrepreneurship and Self Employment Help : Create Jobs, Develop skills, and
give unemployed and disadvantaged people an opportunity to fully participate
in society and the economy. The Europe 2020 strategy recognizes entrepre-
neurship and self employment as key for achieving smart, sustainable and in-
clusive growth, and several flagship initiatives address them.

 Agenda for new skills and jobs
 Youth on the Move—initiatives on education and employment
 European platform against poverty and social exclusion
In its support to entrepreneurship and self-employment, the European Commis-
sion focuses its efforts on business start-ups by unemployed and people from
disadvantaged groups, sustainability and quality of work of self-employed busi-
nesses and micro-entrepreneurs and support for social entrepreneurs and seeks
to increase knowledge about entrepreneurship and self-employment, raise
awareness, facilitate mutual learning and build capacity in EU countries and
regions, promote voluntary standards and protective measures for entrepreneur-
ship and self—employment and support entrepreneurship financially.

The European Social Fund (ESF) promotes entrepreneurship through financial
and business support services. Targeted support is provided to women entrepre-
neurs and disadvantaged and disabled people. Two ESF learning networks are
involved:

 Community of Practice on Inclusive Entrepreneurship (CoPIE)
opening up entrepreneurship to all parts of society

 European Network on Youth Employment exchanging best prac-
tices of youth entrepreneurship.

Despite a growing number of contributions the debate whether we can
actually teach individuals to be entrepreneurs is still very much unsettled
(Henry, 2005). Some argue for the need to distinguish between the ‘art of
entrepreneurship and the ‘skill of entrepreneurship’, suggesting that some

200

She Climbs to Conquer

aspects of entrepreneurship can successfully be taught but that business
education does not make a successful entrepreneur per se whereas other
variables are at play (Henry et al., 2005). More promising in this regard
appears to be awareness-raising efforts aimed at perceptual variables; eg.
Empowering the perception of possessing skills (Minniti, 2007). Findings
presented by Acs and Zerb (2006) point at the importance of starting enter-
prise development policies early because the main drivers are ‘perceptual
variables’ that take a long time to change. Likewise promising evidence
has been found for a group of policies that focuses on enduring local inter-
ventions (Storey, 2003). Here formal and informal support structures are
created, for example, through trainings at publicly sponsored incubators,
research and development (Minniti, 2009). Minniti’s findings suggest that
a diverse set of context driven policies delivered at multiple levels—
national, regional and local— are more conducive to entrepreneurship than
single-issue policies like those focused on access to financial resources.

A suitable framework for analysis that can measure impact and long term
change can also draw important lessons from the work of Minniti (2008) as
she questions whether, and if so, governments are able to positively influ-
ence entrepreneurial activity. Even though she focuses here on general
policies and not those focused on women per se, some of the conclusions
are of interest for women entrepreneurship development policy research.
Concurring with Pearson (2007) Minniti also finds that there is inconclu-
sive evidence for the impact of policies that are designed to enhance access
to finance for entrepreneurs. She also finds little evidence for the positive
effects of tax breaks for start-ups, export subsidies, credits and export guar-
antees and other national policies aimed at stimulating, regulating or re-
stricting business movement.

There is a growing understanding among policy makers, entrepreneurship
support organizations and entrepreneur associations that laws, policies,
support structures as well as cultural mores and individual motivations all
form an interwoven support structure for enterprise development. Further,

201

The Woman in the MSME

there is an increasing realization that there is a gender dimension to these
factors; gender-blind business support measures do not support women’s
enterprise development to the extent that they support men-owned firms.
Focusing efforts specifically on women’s enterprise development, and
measuring their impact, is of growing interest. (Gender-GEDI Executive
Report (2013) ). Globally, women and men are not on a 'level playing
field' in terms of access to resources, which continues to impact women's
ability to start and grow businesses. The 'gendered' nature of factors, if
addressed, could allow high potential female entrepreneurs an equal
chance to flourish.

Some twenty years ago, in 1995, the Fourth World Conference on
Women outlined the watershed Beijing Platform for Action to advance a
global agenda for gender equality and women's empowerment. The Plat-
form identified six strategic objectives related to women and the econ-
omy, ranging from resource access and control to training, occupational
desegregation and work-family balance. ESCAP and Goldman Sachs
10,000 Women's public-private partnership has brought national policy-
makers together with women entrepreneurs, business leaders, academics
and civil society to leverage our collective experience in developing
policies that maximize opportunities and impact for women-owned busi-
nesses. Their experiences highlight many of the bottlenecks that need to
be broken to mobilize the talents of women across the global workforce.
It is imperative that new policies guarantee equal rights to education and
job training and enable women and men to pursue fields based on apti-
tude and passion rather than social convention. The policies should be
tailored to eliminate discriminatory labor practices and ensure women's
equal access to assets and credit. They must support women in their ef-
forts to balance work and family and encourage men to assume a greater
share of domestic responsibilities. The administrative machinery must
ensure women's safety from violence and sexual harassment, access to
justice and political voice.

202

She Climbs to Conquer

Initiatives for Women Entrepreneurs in India

As far as the development of women is concerned there have been various
shifts in the policies of the Government of India during the last fifty
years from the concept of 'welfare' till the 70's, to 'development' in the
'80's, to 'empowerment' in the 90's and now to assured representative par-
ticipation. However, wide gap is still visible between the goals enunciated
in the Constitution, legislation, policies, plans, programmes and related
mechanisms, and the situational reality.

The Ministry of MSME, the various State Governments, State Small In-
dustries Development Corporations, nationalized banks and even NGOs
are conducting various programmes towards women Entrepreneurship
Development. See a list of public programmes for women in Appendix 6.
To cater to the needs of potential women entrepreneurs with inadequate
education and skills, product oriented entrepreneurship development pro-
grammes in areas like TV repairing, leather goods, screen printing etc. are
in place. “Outstanding Women Entrepreneurs” are recognized in order to
incentivize them. The Ministry of Women and Child Development pro-
vides assistance for setting up training-cum–income income generation
activities for making women economically independent. The Small Indus-
tries Development Bank (SIDBI) has been implementing special schemes
like Mahila Udyam Nidhi, for providing equity support, and Mahila Vikas
Nidhi which offers developmental assistance for the pursuit of income
generating activities. SIDBI has also taken up initiatives to set up an in-
formal channel of credit on soft terms giving special emphasis to women,
besides providing training on credit utilization and credit delivery skills
to the executives of voluntary organizations working for women develop-
ment. Grant for setting up production units is also available under Socio-
Economic Programme of Central Social Welfare Board. In 2015 the Hon.
Prime Minister of India has directed that every branch of a public sector
bank should promote at least one woman start up and one SC/ST entre-
preneur every year. Bharatiya Mahila Bank has been established with spe-

203

The Woman in the MSME

cific mandate to serve women entrepreneurs and almost all the public sec-
tor banks already have special branches or outfits to serve women.

There is no dearth of policies and credit schemes especially for micro en-
terprises in India. They do not, however, reach out to all in the urban and
rural areas since most of the lending and supporting institutions do not
have effective awareness building mechanisms except occasional seminars
or news paper advertisements. Shah (2013) observes that Regulatory Poli-
cies, that is policies concerned with laws and the rules and regulations laid
under those laws for various aspects of business related to registration and
incorporation, licensing for production and quotas for scarce raw materials,
taxation, labour, wages, welfare and safety, environmental protection con-
sumer protection, quality and standards and specific sub sector laws and
rules are structured for enterprise development, though most of them are
gender neutral and a few women specific, have, in fact, become distorted
and many regulations are too complex to be implemented effectively.

Commenting on the promotional policies, namely those policies that have
been applied directly or indirectly to women for promotion of self employ-
ment and entrepreneurship, specific sub sectors, traditional industries and
industries in backward regions, she observes : (1) inadequate attention is
given to promotion of primary resource base, physical and social infra-
structure (lack of literacy, skill building etc.) for small and micro entrepre-
neurial activities for women; and (2) promotional strategies adopted by the
government have often south to preserve employment rather than further
develop the economic potential.

While Panchayathi Raj provides for certain reserved quota for women rep-
resentation in the Local Self Government Councils and reservation of seats
in the Parliament and State Legislatures is being hotly debated there is no
mandatory provision in the policy book to ensure women participation in
the regulatory bodies made for broad based citizen participation in the
process of formulation, implementation and monitoring of policies and
regulations that affect them, and for citizen control over the affairs of pro-

204

She Climbs to Conquer

motional agencies, chambers of commerce, industry associations, workers /
trade unions etc. There are no major policies in effect to ensure representa-
tion of woman entrepreneurs in the policy making process or institutions .

Credit policies are gender-neutral except that the public sector banks are re-
quired to provide loans to women entrepreneurs as a matter of priority. In
the absence of any specific women oriented policy or directive the policies
cannot be said to have offered substantial support to women entrepreneurs.

The BMB came in to existence in 2013 on lines of similar initiatives in
other countries. Credit gap in the gender and finance context has been
widely debated in donor platforms and policy circles. An answer to this has
been offered by many countries in relation to a dedicated institutional plat-
form that catered to the credit needs of women as a specific constituent. On
lines of this argument came the new initiative in India in the form of BMB.
The establishment of Bharatiya Mahila Bank was warmly welcomed by
women entrepreneurs though reservations have been expressed by many
Women Entrepreneurs Associations about its efficacy as the regulatory
mechanism continues to be gender neutral. The recent reports on the per-
formance of the bank stand to prove the apprehension.

While, the BMB has already crossed two years of existence, it has not yet
been able to offer a properly structured programme, strategies and financial
products for the constituency it stands for. In fact, financial products such as
beauty parlor programmes are a repetition of the existing discredited pro-
grams of the mainstream public sector banks. Having completed two years
of existence, the bank raises fundamental questions on its own existence.
Did it perform as a development bank? The bank could not provide a con-
vincing answer to this, nor could it provide an answer in terms of lending
strategies and products. Naturally, it has led to arguments in favor of even
scrapping its role as a financial institution. In the policy circles, as it has
been understood, there is an understanding that the bank should wind up its
operations, by merging it with another public sector bank in the country. All
said and done, it should be agreed that, in a male dominated banking sys-

205

The Woman in the MSME

tem – not forgetting that a few banks are headed by women – where certain
kind of processes, procedures and concepts have become deep rooted over
almost a century it is not an easy task to change the attitudes and ap-
proaches over a couple of years. The entire staff of the BMB, including the
MD & CEO, have been drawn from the existing stock. To make them
unlearn the ways they have learned and practiced over years is a time con-
suming process. Added to that, there is no source in the country’s financial
scenario to guide them with specific women-oriented approaches, policies
or strategies. It should be noted that over the decades, the country has not
been able to define a proper women entrepreneurship policy. All promo-
tional policies had been poor extensions of the generic approaches. Further,
the countries –Tanzania and Pakistan – where women banks have been es-
tablished cannot be taken as models because on one hand their population
sizes and business participation philosophies are much different from ours.
On the other hand, they are more subsistence oriented and less focused on
development while we are looking at development initiatives more than
survival issues; survival issues are adequately taken care of by MFIs and
institutions like Kudumbasree. It would be necessary to allow more time
for the BMB to reorient themselves to their new responsibilities and de-
velop policies, strategies, procedures and operation models.

Mudra Bank

The Mudra is a new addition to the platform of financial institutions in the
country. The objective and mandate of MUDRA emerges from the national
level debates on the issues relating to credit delivery for the unorganized
sector in the country. The debates during 2013 and 2014, in the context of
the general elections in the country, and soon after, resulted in the an-
nouncement by the Union budget 2014-2015 in favour of a dedicated
agency that can cater to the credit requirements of the unorganized sector.
The objective of the agency is to ensure collateral-free credit at the so-
called "bottom of the pyramid". It is of especial interest to women as they
form a substantial number in the tiny sector.

206

She Climbs to Conquer

At the operational level, MUDRA raises some important issues that need to
be addressed in relation to the credit requirements of rural enterprises in the
country. These issues may be discussed as follows:

1. The MUDRA , undoubtedly gives an answer to the credit requirements
of tiny enterprises, which were hitherto neglected by the commercial banks.
While the CGTMSE as a collateral- free credit mechanism, also has proved
its limitations, there is need for some mechanism that can ensure the ease of
credit. If the ease of credit is ensured at the prevailing interest rate of the
banks, it is undoubtedly a welcome step.

2. A particular feature of MUDRA is that, it brings in a number of players,
and thereby a competitive environment on the supply side of credit. For ex-
ample, commercial banks, cooperative banks, Gramin banks, and other fi-
nancial intermediates can give MUDRA loans. This means that, on the de-
mand side, there are several options for the entrepreneurs.

3. Even when there is a large number of options on the demand side, on the
supply side, the main players continue to be the commercial banks, and es-
pecially the public sector banks. Therefore, the success of the programme,
to a significant extent, would depend up on the cooperation from the public
sector banks.

4. The coverage of MUDRA loans goes up from a minimum of Rs. 50,000
up to a maximum of 10 lakhs. While a collateral - free loan that is easily
available even a small amount as Rs.50,000, may produce a negative mes-
sage to the borrowers, going by the experience of schemes like PMEGP.

5. The available experience so far indicates that, while in States like Andhra
Pradesh and Telengana, the Scheme has already made some headway, in
other States like Kerala, it is yet to come up.

6. The introduction of MUDRA demands innovative credit assessment
methods, unlike the one practiced by the public sector banks today. This de-
mands serious research and innovation and possibly retraining..

207

The Woman in the MSME

7. While the average size of the loan ticket is important for the lending in-
stitutions from a profitability angle, the number of loans given also is cru-
cial. Unless trade organizations and MSME Associations are involved by
the financial institutions, MUDRA cannot achieve its critical minimum
size and the expected visibility.

8. In Kerala, one of the public sector banks is having a negotiation with the
Kerala Vyapaari Vyvasaayi Ekopana Samithi for extending loan to its
members. However, the State Level Banker's Committee, Kerala has given
a target of 150,000 cases of MUDRA accounts in the current year, cover-
ing 6,000 bank branches in the State. The results relating to the achieve-
ment of this target, and the repayment record over the next two years, will
also be a pointer to the quality of entrepreneurship, especially of start-ups
in Kerala.

State Finance Corporations (SFC)

The SFC was setup under the SFC Act of 1962. Though the SFCs as a de-
centralized institutional platform can play a significant platform in chan-
nelizing financial resources and meeting the credit requirements of enter-
prises at the bottom of the pyramid, the track record so far remains far
from satisfactory. Factors such as, the focus of self employment and enter-
prise development, and the presence of multiple state level promotional
agencies along with the new roles that were visualized for public sector
banks as a follow-up of bank nationalization in 1970, had their impact on
the functioning of SFC's. As of today, most SFC's of the country are sick,
requiring restructuring packages for their very survival.

There are exception to the above picture. The Kerala Financial Corporation
is one of the SFCs having grown in importance through diversification of
its activities. For example, the self-employment development programme
of the corporation has been a pioneering and successful experiment. Ac-
cording to the KFC sources, the programme has brought into this stream, a
number of start-up entrepreneurs, making it a record in the country.

208

She Climbs to Conquer

The Question of Convergence

The need for convergence arises out of some functional features of pro-
grammes: The need for convergence in 'gender and enterprise' policies and
programmes, has been increasingly felt and articulated in the country. How-
ever, there is still much confusion as to how such an idea of convergence
can be taken forward. While the very purpose of National Mission for Em-
powerment of Women (NMEW) is attempting such convergence, translating
this agenda into practice demands much greater clarity on strategies, mo-
dalities of implementation, and clarity on the relative role of stake holders.

The very purpose of the NMEW is convergence of various national and re-
gional initiatives for women empowerment. The Mission was launched by
the Government of India in 2010 with the aim to strengthen the overall proc-
esses that promote all-round development of women. It has the mandate to
strengthen the inter-sectoral convergence; facilitate the process of coordinat-
ing all the women’s welfare and socio-economic development programmes
across ministries and departments. The Mission aims to provide a single
window service for all programmes run by the Government for Women un-
der various Central Ministries. The Mission is also meant to strengthen the
processes which promote holistic development and empowerment of
women, gender equality and gender justice through inter-sector convergence
of programmes that impact women, forge synergy among various stake-
holders and create an enabling environment conducive to social change.

The National Resource Center for Women has been set up which functions
as a national convergence center for all schemes and programmes for
women. It acts as a central repository of knowledge, information, research
and data on all gender related issues, and is the main body servicing the Na-
tional and State Mission Authority. In line with its mandate, the Mission has
been named Mission Poorna Shakti, implying a vision for holistic and
wholesome empowerment of women. The Poorna Shakti Kendra (PSK) is
the focal point of action on ground, through which the services to grassroots
women is being facilitated. Village coordinators at the Kendras are reaching

209

The Woman in the MSME

out to the rural women with the motto "HUM SUNENGE NAARI KI
BAAT!". The PSKs offer the initiatives on a coordinated mode. These ini-
tiatives may be categorized under the following heads:

1. Information and Sensitisation:

 Information on and easy access to all the government schemes/
services/programmes for women across industry, health, education
and livelihood sectors

 Maintaining a disintegrated database of target population

 Awareness generation on legal rights and entitlements

2. Training and Capacity Building:

 Training and capacity building on various issues like leadership, le-
gal rights etc.

 Organizing women into collectives to access various resources

3. Ensuring Synergy of Government Programmes

In government programmes of enterprise development, there need to be
some synergy. Such a synergy can come only through a commonly ac-
cepted local economic development agenda.

4. Coordination of the Outreach of services of Various Depart-
ments

While the above schema of the PSKs is much relevant in the context of
government programmes and their implementation, in an era of accelerated
private sector development, the issue needs to be discussed on a broader
canvas, where, various stakeholders participate in the national agenda of
women's development. Therefore, the issue need to be discussed in terms
of the following key aspects:

Clarity on a national agenda: While the importance of economic empow-
erment of women has been widely accepted in India the modalities for the

210

She Climbs to Conquer

same have to come through concrete strategies. Even today, though various
ministries have chalked out programs for the development of enterprises and
entrepreneurs among women, there is lack of clarity on strategies. Private
sector development is a multi stake holder exercise, which needs to emerge
from a clear national agenda of the purpose of enterprise development. The
objectives can be varied, including employment promotion, regional devel-
opment, women empowerment etc. While these are national goals and ob-
jectives, the driver of private sector is profit motive, par excellence. Can the
goal of profit motive be turned to the larger interest of enhancement of
women's opportunities? Herein comes the question of social responsibility
of business. Though with the latest amendments of the companies act, re-
sponsible business has taken a crucial place in public policy and practice in
our country, the role of women entrepreneurship and livelihoods has not
taken any significant place. It is important that these issues are discussed at
the national level, along with the array of public programs. The task of the
national mission for empowerment of women need to be establishment of
relationship between the public programs and the programs and opportuni-
ties that still remain latent in the private sector. Thus it is possible to have a
larger, comprehensive and realistic national agenda of economic empower-
ment of women.

Clarification of stake holder roles: Assuming that the private sector has a
significant role which still remains ill defined, there is need for debates on
stake holder roles in a comprehensive national agenda that may be visual-
ized as above. What are the relative roles of the government, the corporate
sector and the micro private sector in relation to engagement of women as a
social category. What are the relative roles of various organizational forms,
such as self help groups, co-operatives and private enterprises? What are the
implications of the new economy in relation to the performance of stake
holders? A clarity and understanding on these questions are vital in energiz-
ing the various stake holders into action.

Knowledge Systems: In the emerging new economy, knowledge is the key

211

The Woman in the MSME

driver of enterprise, communication and organization. Therefore with an
understanding of relationship between knowledge and market there need to
be conscious efforts, in order to create a knowledge base, and to channelize
it for the requirements of gender sensitive development action. While the
activities of the Purna Shakti Kendra (PSK) relating to information and
sensitization are commendable, one needs to also understand and appreci-
ate its limitations. Action for development, as a natural corollary, generates
data. Provided that such data are collected by a public authority, it contrib-
utes to generation of information. But, unless information and data get
translated into knowledge inputs, the logic of private sector development
cannot get into action. It is knowledge that brings together stake holders,
and drives their action in an interest based manner.

Co ordination: Co ordination of initiatives for women empowerment by
various stake holders is a must. However, sine qua non for co ordination is
mutual trust among the various stake holders. A simple example is the
women's specific schemes of the public sector banks. The public sector
banks are naturally bound to follow the government policies. However,
since they are also business entities, they often fail to implement gender
specific programs meaningfully. The quiet evident reason is that, while the
government has a policy perspective on gender, the banks often do not find
a convincing business case, neither in the long run nor in the short run.
Cultivating trust, therefore needs to be the starting point of effective coor-
dination.

All the four points, indicated above lead us, to the need for convergence of
policy perspective, stake holder engagement, provision of knowledge in-
puts and coordination, in an effective manner. The way forward towards
gender empowerment, lies in such an integrated approach.

Reserve Bank of India Directives

Women units are very often too tiny in size. Institutions are reluctant to
attend loans for very small amounts and demand collateral securities three

212

She Climbs to Conquer

or four times of the loan amount. Women having no securities sufficient to
offer or not to take large amounts of loans do not get the attention of these
institutions. To tackle this situation and to ensure adequate financial support
to women enterprises the RBI took several initiatives. The RBI in its action
plan for 2001 provided special programmes and strategies for facilitating
assistance to women in the entrepreneurial sector and to attract more to this
sector. For strengthening credit delivery to women particularly in the Tiny
and SS1 sector, RBI issued directions and an action plan to all the public
sector banks. (RPCD. PLNFS. BC. No 40/06.02.79/2000-01.Dated Decem-
ber 12, 2000) a good number of which, unfortunately, still continue to be
unfulfilled.

Action Plan for Strengthening Delivery of Credit to Women

The action plan consists of the following points:- -

(1) Redefining of Banks' policies / Long term plans

(i) Banks should redefine their policies by taking into account women's re-
quirements in a focused and integrated manner.

(ii) Banks should have a Charter for women, which must be published.

(iii) Banks must ensure that the benefits under various poverty alleviation
and employment promotion schemes go to women in the prescribed ratio.

(2) Setting up women cells

(i) Women's cells should be set up at the banks' head office as well as in
their regional offices where information, counseling /guidance and other
credit related services for women entrepreneurs are readily available.

(ii) At the branch level, or clusters of branches in rural areas, the bank
should have a desk visibly placed in order to provide women with relevant
information and guide/assist them in making loan applications etc. As far as
possible a well-trained lady staff member, particularly in rural areas, should
handle the desk.

213

The Woman in the MSME

(iii) Special attention should be given to women in every branch. One offi-
cer in each branch should be designated exclusively for dealing with cases
of flow of credit to women. Banks should have a target for covering at least
20 women per branch for lending and 20 for training.

(3) Simplification of procedural formalities

The application forms, appraisal standards and other procedural require-
ments for extending finance to women entrepreneurs should be simplified as
far as possible. Banks should ensure that the managerial staffs assist women
entrepreneurs in understanding the banks' procedural formalities in a simple
manner. They should also give assistance in the preparation of project re-
ports and completion of other paper work.

(4) Orientation of Bank officers /staff on gender concerns / credit re-
quirements of women
(i) Banks should take appropriate measures to ensure that the branch level
functionaries do not have traditional bias of preferring men to women in fi-
nancing. For this purpose the bank staff should be oriented through short
term training programmes in which a special component on gender concerns
can be incorporated.

(ii) Banks should organize workshops of two three days duration for its
branch managers/staff on different aspects of handling credit requirements
of women. Banks should also invite members of Non- Government Organi-
zations (NGOs) or women social workers to these workshops for active in-
teraction so that the problems being faced by the women entrepreneurs
could be better understood by bank staff in an informal manner.

(5) Publicity campaign for creating awareness about credit facilities

(i) Banks should launch Awareness Programmes/Publicity Campaigns about
schemes available for women. Attractive publicity material such as posters,
charts, can be specially designed in a simple manner so that women are able
to understand it easily. The publicity material should be available in differ-
ent languages and should be widely distributed particularly in rural and semi

214

She Climbs to Conquer

-urban areas. Gender concerns should also be addressed through publicity
material viz. slogans on hoardings / bus shelters etc.

(ii) For the large numbers of illiterate and semi-literate women, particularly
in the rural and semi-urban areas, the banks should make efforts to inform
them through audio-visual methods /slides and charts about the different
schemes under which finance is available. Banks should establish contact
with the Village Panchayats to seek their assistance in dissemination / dis-
tribution of information material to women in the village and for delivery
of credit to identified women.

The Kerala Model

Kerala is the forerunner in providing special consideration and assistance
for attracting women to become entrepreneurs. Specialized institutions and
special programmes provide strong support for the development of women
entrepreneurship in the state. For details see Appendix 10

Field Responses

Numerous suggestions were made by women participants at various semi-
nars and fact finding workshops held by the Institute of Small Enterprises
and Development and during field visits by the author. Important sugges-
tions thus received are indicated below. Some of them have already been
included in the recent policy frame work though not yet implemented ef-
fectively.

1. Consider women as specific target group for all developmental pro-
grammes. Repeated gender sensitization programmes should be held
to train government officials and bank staff to treat women with dig-
nity and respect as persons in their own right.

2. Appropriate training programme on management skills should be
provided to women. Encourage and enhance women's participation in
decision-making.

3. Vocational training should be re-oriented in order to enable women
understand the production process and production management.

215

The Woman in the MSME

4. Skill development courses in women's polytechnics and industrial
training institutes should include issues relating to procurement,
marketing, finance and governance.

5. Skills must be put to work in training-cum-production workshops.
6. Training on professional competence and leadership skill should

be made part of EDPs.
7. Counseling facilities with the aid of committed NGOs, psycholo-

gists, managerial experts and technical personnel should be estab-
lished in all professional institutions, DICs and Local Self Gov-
ernment for the existing and upcoming women entrepreneurs to
remove psychological barriers like lack of self confidence and fear
of failure.
8. A system of continuous monitoring should be established. To en-
courage self and peer monitoring, exclusive women chambers or
associations for Industry, trade and commerce may be established.
Where the number of members is small to be viable, at least an
autonomous women’s wing should be considered on the lines of
FICCI Ladies Organization.
9. Special assistance in marketing by women guilds and dedicated
groups may be considered. Such efforts should include export ini-
tiatives and visits overseas by women entrepreneur groups.
10. Banks, State Finance Corporations and other financing institutions
should extend purely trade related finance to women entrepre-
neurs on the security of goods in trade, book debts and other
moveable assets. Facilities should be made available at village
level by establishing extension counters instead of asking women
to travel to towns away from their normal place of business.
11. Dedicated infrastructure, in the form of industrial plots, industrial
parks, Clusters and sheds, may be set up exclusively for industries
and services to be established by women.
12. Industrial estates, parks and clusters, whether dedicated or not,
should have adequate facilities for baby care, nurseries and toilet
and changing facilities irrespective of the number of women entre-

216

She Climbs to Conquer

preneurs or women workers affected.
13. Industrial estates etc. could also provide marketing outlets for the

display and sale of products made by women.
14. A three tier system of Women Entrepreneur's Guidance Cells

should be set up at state, district and local levels to handle the
various problems of women entrepreneurs.
15. Training in entrepreneurial attitudes should start at the high
school level through well-designed courses, which build confi-
dence through behavioral games.
16. A major hurdle for trained women is the initiation into independ-
ent professional work. Families routinely provide financial and
emotional support for sons that they would never extend to
daughters. Parents and daughters together need to be convinced
that the skills learned in the polytechnics could provide them
with profitable occupations. In women's institutes, therefore,
there is a strong case for introducing an additional year of train-
ing when the pupils who have been taught skills are put to work
in training-cum-production workshops, whose produce is sold
and income earned.
17. Activities in which women are trained should focus on their mar-
ketability and profitability, and not be routinely restricted to
making pickles, papad and garments.
18. The course designers should keep in mind the special needs of
women, such as their preference to work from home or a nearby
location, which would enable them to also fulfil their household
responsibilities. This should not, however, result in mechanically
restricting them to low technology skills traditionally believed to
be suitable for women. Several hi-tech functions with substantial
value addition and good profitability could also be undertaken
within homes and the courses should be imaginatively and inno-
vatively designed.
19. A high power and professionally involved committee must con-
stantly review the courses and the curriculum on the basis of

217

The Woman in the MSME

evaluation studies and market developments.
20. To encourage more passive women entrepreneurs whose men-

folk run businesses in their names, and to actively involve the
women in their businesses, all the women who claim to run
'women's enterprises' should be compulsorily involved in a net-
work programme. Repeated exposure to women who are suc-
cessfully managing enterprises might encourage some women
who are passive now to involve themselves to a greater extent in
the enterprises to which they have lent their name.

There is a widespread practice of men grabbing concessions by estab-
lishing enterprises in the name of female members of the household.
Men control the business while woman continue as passive partners or
workers. Besides periodic monitoring and review and self declaration
by the beneficiary woman entrepreneur, Renuka Viswanathan (2001)
suggests that “as regards allotting sheds or land on priority basis or at
concessional rates, in the case of women, the scope for misuse is much
higher than in the case of any other disadvantaged group. For this rea-
son, we must be cautious about making special allotments especially in
highly sought after areas. If such a scheme is inevitable, precautionary
measures should be built in screening committees to evaluate whether
the beneficiary is indeed going to be in full charge of the enterprise.
(Men should under no circumstances be permitted to appear or repre-
sent women before the committee). Training in running an enterprise
in quality approved institutions should be insisted upon as a precondi-
tion for such priority allottees. (Let us hope this does not encourage the
mushrooming of training institutions for women entrepreneurs as a
profitable sideline by unqualified and uncommitted persons). The same
conditions could be applied to judge eligibility for special investment
subsidies or margin money facilities being extended for women.”
Where the declaration is later detected to be false the assistance pro-
vided may be withdrawn and recovered with a heavy penalty as a de-
terrent against frauds.

218

She Climbs to Conquer

Chapter XII
THE THIRD GENDER-
THE GROSSLY NEGLECTED POTENTIAL

“Noisy and garish, an air of the notorious surrounds them as they walk
through the streets. People shrink back when they pass. They are ridiculed
and scorned, yet people are wary of incurring their wrath. They are stigma-
tized as social outcasts, yet fear of their curse inspires caution. For despite
their humble status on the lowest rung of the Indian caste system, they wield
a mighty cultic power- and in this they are worldwide unique. They are
creatures of the twilight,..”.(Isabell-Zipfel)]

The third genders have been ascribed spiritual powers by most indigenous
societies. In the Indian subcontinent, the Hijras are supposed to have super-
natural powers, through which they can bless people or curse them. This
gives Hijras a unique space in the society, and traditional Indians still invite
Hijras to seek their blessings on important occasions such as marriage.

219