Problems and Challenges faced by Women Entrepreneur in India

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Problems and Challenges faced byWomen Entrepreneur in India

Ashima Bhatnagar*Dr. Broto R. Bhardwaj**

Shikha Gandhi***

Till the turn of the century, man has enjoyed a dominant position. But change in positiontechnological innovation and modern way of thinking can reduce the disparity betweenman and women, and bring about equality and equity between them, the need of the hour inwomen empowerment both through provision of employment and enterprise creation.Typologically, the former leader to endogenous empowerment and the latter give rise toexogenous empowerment. Women entreprenurer’s have been making a significant impact inall segments of the economy in Canada, Great Britain, Germany Australia, US and so inIndia. The Government of India has defined women entrepreneurs based on womenparticipation in equity and employment of a business enterprise. Accordingly, a womanentrepreneur is defined as an enterprise owned and controlled by a woman having a minimumfinancial interest of 51% of the capital and giving at least 51% of the employment generatedin the enterprise to a woman. It is the group of women or single women running an enterpriseor company in order to earn profit. Now days because of women empowerment women arestepping-stone into the industries and are taking the place of men. Now a day’s women’s arerunning several business like beauty parlours, switching shops, boutiques, etc. Other areaschoosen by women are retail trade, restaurants, hotels, education and cultural.

The main aim of the research paper is to find out what problems hinder women - inthese case women entrepreneurs – in creation and maintenance of their own enterprise. Inthis paper, we did primary research through questionnaire where women entrepreneurs werequestioned about the problems they faced when starting up an enterprise and problems theyface in the day-to-day running of their businesses. More general questions about the size of

Abstract

*Asst. Professor, Bharati Vidyapeeth University Institute of Management and Research, New Delhi.**Associate Professor, Bharati Vidyapeeth University Institute of Management and Research, New Delhi.***Asst. Professor, Bharati Vidyapeeth University Institute of Management and Research, New Delhi.

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their enterprises, their family background and their qualifications were raised in order tocomplete the picture. The managerial implications and policy making implications arediscuused.

Keywords: Women entrepreneur, Enterprise, Opportunities in the face of challenges

ambitiousness and marital status are important for theencouragement of women entrepreneurship to start upa new business (Nicholas and Victoria, 2010; Nan andMaria, 2007).

Women Entrepreneurship has been largely neglectedboth in society in general and in the social sciences. Notonly have women lower participation rates in WomenEntrepreneurship than men but they also generally selectto begin and manage firms in different industries thanmen tend to do. The industries (primarily retail, educationand other service industries) chosen by women are oftenperceived as being less important to economicdevelopment and growth than high-technology andmanufacturing. Lee (1996) examines the motives thatstimulate women into becoming business owners. Thestudy finding concludes that women entrepreneurs aremotivated by a high need for achievement, a slightlyhigh need for dominance and moderate needs foraffiliation and autonomy (Lee, 1996).

Furthermore, conventional research, policies andProposals tend to be “men streamed” and too often donot take into statement the specific needs of WomenEntrepreneurs and would-be Women Entrepreneurs. Asa consequence, equal opportunity between men andwomen from the appearance of WomenEntrepreneurship is still not a reality. In order to realizethe benefits of policy changes it is important toincorporate a Women Entrepreneurial dimension inconsidering all SMEs and growth policies (e.g. meetingWomen financing needs at all stages of the businesscontinuum; take-up of business development andsupport services; access to corporate, government andinternational markets; technology access and utilization;R&D and innovation; etc.).

Better qualitative information and decimal data andstatistics are required to profile women entrepreneurs(demographic information, barriers to start-up andgrowth). This would also assist in promoting awareness

IntroductionWomen entrepreneurship is both about women pose insociety and the role of Women Entrepreneurship in thesame society. Women are visage with specific obstacles(such as family responsibilities) that have to be overcomein order to give them access to the same opportunitiesas men. Also, in some countries, women mightexperience obstacles with respect to holding propertyand entering contracts. Increased participation of womenin the have force is a prerequisite for improving theposition of women in society and self-employed women.The role of Women entrepreneur needs to be consideredin the economic development of the nation for variousreasons (Nicholas and Victoria, 2010). The studyinvestigated entrepreneurial activity and analyzed theincentives of female participation in the labor marketand found that female entrepreneurial activity play animportant role in social and economic issues.

Women entrepreneur has been recognized duringthe last decade as an important untapped source ofeconomic growth. Women Entrepreneurs create newjobs for themselves and others and by being differentalso wage society with different solutions tomanagement, organization and business problems as wellas to the exploitation of Women Entrepreneurialopportunities. However, they still represent a minorityof all Women Entrepreneurs. Thus there exists a marketunfortunate discriminating against Women possibility tobecome Women Entrepreneurs and their possibility tobecome successful Women Entrepreneurs. This marketunfortunate needs to be addressed by policy makers sothat the economic potential of this group can be fullyutilized. While without a doubt the economic impact ofwomen is substantial, we still demand a reliable picturedescribing in detail that specific impact. The studysuggest that combination of pull and push motives andeffective mentoring, personal characteristics such as riskof failure, educational level, creativity, innovativeness,

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of the role of Women Entrepreneurs in the economy.Using a frame of reference such as that developed inthe report could be valuable for the analysis of thisinformation. Kumar (2008) found that various supportingagencies had not been percolated down to praxis levelin the real sense. Need to intensify the efforts to increasethe level of awareness of various sources of financeavailable to women entrepreneurs.

It is observed that women entrepreneur networksare major sources of knowledge about womenentrepreneur and they are increasingly recognized as avaluable tool for its development and promotion. Policymakers must foster the networking of associations andencourage co-operation and partnerships amongnational and international networks and assist WomenEntrepreneurial endeavors by women in the economy.Peter and Alison (2006) emphasized on the challengedfaced by women entrepreneurs related to conflictbetween work and home life and networks.

The challenge of world class competition and theattempts at globalization and liberalization hastremendously modified the business environment of firmsin India. In contributing to the working of any firm inIndia, be as a policy maker or as a mortal doing businesswith a firm in India or as a marketing practitioner or asan academician, it is important to comprehend howpractically the firms have taken measures to combat theonslaught of these challenges. Nan and Maria (2007)found that women tend to perceive themselves and theentrepreneurial environment in a less favorable light thanmen across all countries in the sample and regardless ofentrepreneurial motivation.

What new turns have been prefabricated in the actualworking system of Women Entrepreneur? In otherwords, an understanding of the exact nature of theparadigm shifts in small and medium enterprises.Meanwhile, the association of women entrepreneur’sdeficiencies in organizing nature, construction systemand operating mechanism needs further perfection torealize its social service function. That is, from the pointof view of an individual firm in India, how the challengeof the shifting economic environment been perceivedand what new efforts have been adopted towardsmanaging these challenges?

From the above passages, it is worthwhile tomention the major suggestions contributed by theresearchers from the wide-ranging study about WomenEntrepreneur were summarized below:

Increase the capability of women to participate inthe have force by ensuring the availability of inexpensivechild care and equal treatment in the work place. Moregenerally, improving the position of women in societyand promoting women entrepreneurship generally willhave benefits in terms of women entrepreneur. Listen tothe voice of women entrepreneurs. The creation ofgovernment offices of women business ownership is oneway to assist this. Such offices could have programmedresponsibilities such as providing women businesscenters, organizing information seminars and meetingsand/or providing web-based information to thosewanting to begin and grow a business. Incorporate aWomen Entrepreneurial dimension in the formation ofall SME-related policies. This can be done by ensuringthat the impact on Women Entrepreneur is taken intostatement at the design stage. Promote the developmentof women entrepreneur networks. These are majorsources of knowledge about women entrepreneur andvaluable tools for its development and promotion. Co-operation and partnerships between national andinternational networks can assist women entrepreneurialendeavors by women in a global economy. Periodicallyevaluate the impact of any SME-related policies on thesuccess of women-owned businesses and the extent towhich such businesses take advantage of them. Theneutral should be to refer ways to improve theeffectiveness of those that should be retained. Goodpractices that are identified in this way should bedisseminated and shared internationally. Improve theexistent and analytical underpinnings of ourunderstanding of the role of Women Entrepreneurs inthe economy. This requires strengthening the statisticalbasis for carrying out gender-related cross-countrycomparative analyses and longitudinal studies of theimpact of important developments and policies,especially over time. Women Entrepreneur is dependenton both demand side (political and institutionalframework, family policy and market sources) andsupply side factors (the availability of suitable individuals

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to occupy Women Entrepreneurial roles). WomenEntrepreneur depends on both the situation of womenin society and the role of Women Entrepreneurship inthat same society. Both the factors that affect the gendersystem and the factors that affect WomenEntrepreneurship in society are involved. In addition, astatistically significant tendency for businesses ownedby women to be characterized by lower rates of salesgrowth than those owned by men was also identified.These differences between patterns of small businessownership between men and women allow alternativeexplanations of what might at first seem to be anapparent gender bias (Riding, 1990).

Unique Traits of Women to BecomeEntrepreneursButtner and Moore (1997) found that loan accountmanagers associated the traits usually identified withsuccessful small business owners more closely with malebusiness owners than with women owners.Subsequently, they attempted to discover whether ornot sex stereotypes actually influence loan rejections.Their results indicated that neither gender of applicant,type of loan account manager, or presentation formatof application played a role. Findings indicate that thewomen’s most important entrepreneurial motivationswere the desire for challenge and self- determinationand the desire to balance family and workresponsibilities.

• They are endured with intuition that helps themmake right choices even in a situation whereexperience and logic fails.

• They are the natural net-workers and relationshipbuilders, forging powerful bonds and nurturingrelationship with clients and employees alike.

• In nutshell, they are as competent as their malecounterparts if not better.

Objectives of the StudyThe study has been conducted with the followingobjectives:

• To portray a profile of women entrepreneurs inIndian context;

• To study the reasons for being in business i. e.motivational factors;

• To study the attitude of family and society towardswomen entrepreneurs;

• To study the problems faced by womenentrepreneurs.

Research MethodologyThe study was conducted in India. We adoptedconvenient sampling technique was adopted for theselection of study area. A sample of 60 womenrespondents (10 each from one zone and 20 from India)was taken on the basis of criterion that they should berunning their enterprise independently or in PartnershipEnterprises taken up for the study were boutiques,beauty parlours, coaching centre, P.C.O’s, generalstores.

Random sampling technique was adopted for theselection of study area. A sample of 60 womenrespondents (10 each from one zone and 20 from NCR)was taken on the basis of criterion that they should berunning their enterprise independently and not inpartnership. Enterprises taken up for the study wereboutiques, beauty parlours, handloom units, nursinghomes, P.C.O’s, general stores and carpet making units.Well structured and pretested interview schedule wasused for collecting primary data by survey method.Tabular analysis techniques employed was chi-squaretest.

Women entrepreneurship is a recent phenomenonand in the process have to face various problems.Therefore, this study was conducted on sixty womenentrepreneurs selected through random technique fromfour zones in India (Ghaziabad, Noida as one zone inNCR & Gurgaon as another). Nursing homes,boutiques, handloom units, beauty parlours carpetmaking units and general stores were the enterprisesselected for study. The objectives of the endeavor wereto ascertain the financial, marketing and productionconstraints faced by women in their enterprises;assessment of their health status, work place facilitiesand to develop guidelines for becoming a successfulentrepreneur. Poor location of unit, tough competitionfrom larger and established units, lack of transport

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facility, lack of rest and sleep and non-availability ofraw material were the significant problems faced byentrepreneurs. The factors causable to these problemswere; difficulty in affording own vehicle, not beingpopular, heavy schedule of work and long working hours.Common entrepreneurial problems can be dealt byformulating self help mutually aided groups. Supportmechanism such as institutional credit need to bestrengthened to keep entrepreneurs aware about loaningschemes/credit facilities for further expansion.

Data AnalysisThis study was conducted using qualitative data (whichwas prioritized) using rating scales in accordance withthe present context of women entrepreneur in India.According to the research we found that 55% of thewomen entrepreneur was in the age group of 26 yearsto 40 years. The women entrepreneurs are involved inBoutique, Beauty parlour, Interior decoration,Consultancy and so on. The major factors motivatingwomen entrepreneurs to start up their own businessinclude self achievement, profit and money making,confidence in the products and services offered. Themajor problems that come in the way of womenentrepreneurs are: Financial problem, combining familyand work life, and domestic competition and others.Also it was found that Women entrepreneurs are readyto spend around half of their personal savings and evenready to borrow money from family and friends.

Women Entrepreneurs in GlobalEconomyAs technology speeds up lives and the new millenniumis now upon us, it is useful to take time to reflect onwhat will surely be one of the driving forces of the globaleconomy of the 21st century. Women are an emergingeconomic force that policymakers cannot afford toignore.

The world’s modern economy, and in factdemocracy, depends on the participation of both sexes.Wouldn’t it be ideal to envision as normal a globalinternational order based on democracy, free enterprise,and binternational law? Since no such system has everexisted, this system looks utopian, if not naive. However,

governments and institutions promoting democraticvalues make a real difference in women’s businessorganizations in newly emerging market democracies.

In the global economy of the 21st century,international trade will be akey source of economicgrowth and development. Recent surveys conducted inseveral countries by the National Foundation of WomenBusiness Owners (NFWBO) indicate that women-owned firms involved in the global marketplace havegreater revenues, are more optimistic about theirbusiness prospects and are more focused on businessexpansion than women-owned firms that aredomestically oriented. Obviously, expanding intointernational trade can pay off for women-owned firms.However, it is not clear that smaller enterprises arebenefiting from this potential as much as larger firm.Women’s business associations can and should ensurethat their members—large and small—are equipped toreap the rewards of expanding into the internationalarena. Women must learn how to play the internationaltrade game, and a global network of women’s businessassociations can help them do that. Informationtechnology can help identify markets, provide industryinformation and spotlight trends about what the role ofwomen in national economies can be. More informationabout women-owned business enterprises is sorelyneeded to force policymakers to realize that womenare an economic force to be reckoned with.

Why Women Start BusinessesThe present study suggests that women in India starttheir own businesses from a desire for self-determinationand for career challenge and that they expect thecorresponding respect, recognition, and self-esteem thatboth self-determination and challenge provide. Primarily,entrepreneurship is a survival instinct that motivateswomen to start a business. Around the world, dismaleconomic conditions, high unemployment rates, anddivorce catapult women into entrepreneurial activities.Desperate to put food on the table for their children,women are defying societal norms in order to survive.

Entrepreneurship is a highly personal, subjectiveprocess. Becoming an entrepreneur is an evolution ofencountering, assessing, and reacting to a series of

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experiences, situations, and events produced by political,economical, social, and cultural change. These diversecircumstances prompt individual entrepreneurs to modifytheir personal living conditions. Women who own andoperate a business are not a homogeneous group.Cultural and social patterns prescribe whether a womancan become an entrepreneur within her society or not.Some constraints are obvious; others are disguised inpatriarchal heritage within cultures that preclude femaleentrepreneurship. As Jehan Sadat said referring tobusiness ownership, there are those who yet realize thatthey too can enter the race. But in spite of manyobstacles, women somehow find a way to engage inentrepreneurial activities. When the issue ofentrepreneurship is at stake, the question should not bea matter of “can she” or “why does she” but “how shedoes” and “where can she go for help”.

For the woman entrepreneur, the process of startingand operating a new enterprise can be tremendouslydifficult in both the formal and informal sector becauseshe often lacks the skills, education, and societal supportsystem to facilitate her efforts.

Females Contributions To Global MarketWomen business owners bring many assets to the globalmarket. Female entrepreneurs have demonstrated theability to build and maintain:

• Long-term relationships and networks.• To communicate effectively.• To organize efficiently.• To be fiscally conservative.• To be aware of the needs oftheir environment and• To promote sensitivity to cultural differences.

Women’s enterprises are qualitatively different frommen’s. Studies indicate that women business ownerscreate a clear culture of their own. Female enterprisestend to center on the delivery of services responding totraditionally unsatisfied needs. Author Sally Helgesencommented that women managers liberally seekinformation, exchange ideas with others, and letinformation crystallize before making a final decision.Women entrepreneurs show a tremendous willingness

to seek business guidance and education to compensatefor perceived weaknesses.

Barriers Faced By Women DoingInternational BusinessObstacles that women face in international businessinclude limited international business experience,inadequate business education, and lack of access tointernational networks. Challenges common to allenterprises include securing funding, developingmarketing and management skills, and devising suitablebusiness strategies to thrive in globalized social andeconomic environments. Other impediments for womenare societal, cultural, and religious attitudes. In revitalizingeconomies they may also face intractable infrastructureproblems. In reviewing the NFWBO 1998 surveysfrom Argentina, Mexico, Brazil, Ireland, Russia, andLatin-and Iber-American countries, the uppermostbusiness concerns are making profits, hiring and keepingqualified employees, acquiring state-of-the arttechnology, complying with government laws andpolicies, obtaining business management training,securing adequate credit, and improving the overall stateof the economy. These obstacles parallel concerns ofwomen business owners in the US, Canada, and Britain.Other researchers in developing and transitionaleconomies point out the problems of genderdiscrimination under patriarchal traditions, double-shiftsyndrome, and corruption.

Credit BarriersThe importance of access to credit is identified as amajor barrier to entry into self-employment throughoutthe world. Women setting up microenterprises, SMEs,or formal large-scale businesses all encounter varyingdegrees of difficulty in obtaining capital, collateral, andfair lending terms. In fact, according to a study by PeggyClark and Amy Kays, 41% of entrepreneurs report thatlack of money is the greatest obstacle to starting abusiness, and 47% cite lack of capital as the greatestbarrier to business growth.

Women in particular tend to seek small personalloans because, in general, they tend to start small firms.

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The banking world has thus far shown little interest insmall loans or microcredits, given the relatively highhandling costs, with the result that institutionalizedbanking practices remain, for the most part, rigidlyopposed to microcredit concepts.

Technology, Education, TrainingCreating educational tactics for improving technical skillsis fundamental for entrepreneurial growth. Technology,education, and training issues are tightly interwoven andcan prevent women entrepreneurs reaching theirprofitability potential.

Training is the essential component for producingan able corps of entrepreneurs who not only survivebut thrive and contribute to the local, and ultimately, theglobal economy. Skill-based training, technical training,technology training, and delivery of management skillsare necessary to strengthen not only entrepreneurs, butalso associations. Technical assistance, in other words,is especially valuable in developing and transitionaleconomies where business and managerial skills are oftencompletely lacking.

According to a survey of Russian womenentrepreneurs, women business owners strongly desiretraining, management, and technical assistance. In fact,the survey noted that 59% specifically asked for trainingin finance, marketing, and related business topics.Women worldwide recognize that they cannot growwithout the right tools.

Double Shift, Double BurdenThe combination of two jobs, one at work and one athome, is difficult for a woman in any country, but it isdoubly taxing for a woman in a developing or transitionaleconomy where poverty and lack of infrastructure canmake the most basic tasks harder and more time-consuming. Yet, what choice do women have? Goscilosaid society “exhorted women to be both producersand reproducers. As a consequence, they [bear] thedouble load of full-time work and all domesticresponsibilities.” 6 In many ways the “double shift, doubleburden” stems from patriarchal traditions that are stillfollowed in the majority of the world’s countries. Yet,change is happening as countries modernize andintegrate with the global economy.

ConclusionsWomen entrepreneurs faced constraints in aspects offinancial, marketing production, work place facility andhealth problems. Financial problems faced were non-availability of long-term finance, regular and frequentneed of working capital. Poor location of shop and lackof transport facility were major marketing problems.Production problems included the problem of non-availability of raw material. Women entrepreneurs alsofaced problem of improper water and space facility.Guidelines framed as a solution to these problems canhelp women entrepreneurs to deal with these problemseffectively.

References

1. Jean Lee, (1996) “The motivation of women entrepreneurs in Singapore”, Women In Management Review,Vol. 11 Iss: 2, pp.18 – 29

2. Incentives and Female Entrepreneurial Activity: Evidence from Panel Firm Level Data.Full Text AvailableBy: Apergis, Nicholas; Pekka-Economou, Victoria. International Advances in Economic Research,Nov2010, Vol. 16 Issue 4, p371-387

3. Langowitz, Nan; Minniti, Maria (2007) The Entrepreneurial Propensity of Women. Entrepreneurship:Theory & Practice, Vol. 31 Issue 3, p341-364.

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4. Kumar A. (2008) Awareness of supporting agencies among women entrepreneurs in small businesses.The Icfai University Journal of Entrepreneurship Development, Vol. V, No. 4.

5. Rosa, Peter; Dawson, Alison (2006) Gender and the commercialization of university science: academicfounders of spinout companies. Entrepreneurship & Regional Development, Vol. 18 Issue 4, p341-366.

6. Allan, L. Riding and Catherine, S. Swift (1990) Women business owners and terms of credit: Someempirical findings of the Canadian experience, Journal of Business VenturingVolume 5, Issue 5, Pages 327-340.

7. Buttner, E. Holly; Moore, Dorothy P. (1997) Women’s Organizational Exodus to Entrepreneurship: Self-Reported Motivations and Correlates with Success. Journal of Small Business Management, Vol. 35Issue 1, p34-46.

8. Ahlawat, T. (1999) Impact of Financial Assistance Schemes on Economic Empowerment of Women.M.Sc. Thesis CCS Haryana Agricultural University, Hisar Kamulun, N. and A. Kumar. 1992.

9. “Entrepreneurship Development in Orissa: Some Issues.” Yojna, 16(2): 18-19 Kapoor, K. 1998.Entrepreneurial Behaviour: A Study of Selected Women Entrepreneurs. M.Sc. Thesis, Punjab AgriculturalUniversity, Ludhiana Reddi, P.N. 1991.