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Scope and Challenges of Women Participation in Small Scale Industries;

A study on rural and urban women Entrepreneurs of Maharashtra

Abstract: Optional

1. Introduction

In many developed economies, women are starting businesses at a faster rate than men and are
making significant contributions to job creation and economic growth. In many developing
countries, women are also making a significant economic contribution. It is estimated that there
are about 8 to 10 million formal SMEs with at least one women owner in developing countries.
These businesses are contributing to economic growth and poverty reduction. For example, a
survey of 1,228 women business owners in the Middle East North Africa (MENA) region found
that women are running well-established businesses that are generating revenues well over USD
$100,000 per annum, comparing favorably to the number of women-owned firms in the United
States generating similar amounts. Although the average growth rate of women businesses in
emerging markets is significantly lower than that of men, their growth potential is becoming
evident. In East Asia, for example, women-owned SMEs have shown a consistent growth
trajectory and in some countries are growing at a faster rate than businesses owned by men.

Women entrepreneurs make a significant contribution to the Indian economy. There are nearly
three million micro, small, and medium enterprises with full or partial female ownership.
Collectively, these women-owned enterprises contribute 3.09 percent of industrial output and
employ over 8 million people. Approximately, 78 percent of women enterprises belong to the
services sector. Women entrepreneurship is largely skewed towards smaller sized firms, as almost
98 percent of women-owned businesses are micro-enterprises. As with the broader MSME sector,
access to formal finance is a key barrier to the growth of women-owned businesses, leading to
over 90 percent of finance requirements being met through informal sources.

1.1 Women Entrepreneurship and Their Role in MSMEs
There is growing evidence all over the world that Micro, Small and Medium Enterprises (MSMEs)
play a significant role in the national economic development of any country. They provide majority
of new jobs and produce much of the creativity and innovation that fuels economic progress. The
extra growth over the past several years throughout the industrialized countries has been due to
the growth of MSMEs. In India, the Ministry of Micro, Small and Medium Enterprises (MSME)
is implementing the promotional schemes for the development of micro, small and medium
enterprises. The schemes and programmes generally focus on capacity building in states and
regions; nevertheless, there are a few schemes and programmes, which are individual beneficiary-
oriented. While there are no specific reservations for women, in the latter, there are some
concessions/incentives available under these programmes for the benefit of women entrepreneurs.
In respect of entrepreneurship/skill development training programmes. Under the National Awards
for Entrepreneurial Development (Quality products) and Trade Related Entrepreneurship
Assistance and Development (TREAD) programme for women, the necessary guidelines have
been issued and specific reservation provided for women. Similarly, fewer than two employment
generation programmes being implemented by the Ministry like Rural Employment Generation
programme (REGP) and prime Minister Rozgar Yojana (PMRY), some concessions have been
provided for women beneficiaries. Besides, the Coir Board is implementing the Mahila Coir
Yojana, which is a women oriented self-employment programme.

1.2 Need and Importance of Self Help Group

Self-help groups are necessary to overcome exploitation, create confidence for the economic self-
reliance of rural people, particularly among women who are mostly invisible in the social structure.
These groups enable them to come together for common objective and gain strength from each
other to deal with exploitation, which they are facing in several forms. A group become the basis
for action and change. It also helps buildings of relationship for mutual trust between the promoting
organization and the rural poor through constant contact and genuine efforts. Self help groups
plays an important role in differentiating between consumer credit and production credit, analyzing
the credit system for its implication and changes in economy, culture and social position of the
target groups, providing easy access to credit and facilitating group/organization for effective

control, ensuring repayments and continuity through group dynamics; setting visible norms for
interest rates, repayment schedules, gestation period, extension, writing of bad debts; and assisting
group members in getting access to the formal credit institutions. Thus, self-help group disburses
microcredit to the rural women for the purpose of making them enterprising women and
encouraging them to enter into entrepreneurial activities. Credit needs of the rural and urban poor
women are fulfilled totally through the SHGs. SHGs enhance equality of status of women as
participation, decision-makers and beneficiaries in the democratic, economic, social and cultural
spheres of life. The rural poor are in-capacitated due to various reasons such as; most of them are
socially backward, illiterate, with low motivation and poor economic base. Individually, a poor is
not weak in socio-economic term but also lacks access to the knowledge and information, which
are the most important components of today's development process.

2. Review of Literature

Amuthalaxmi P., Kamalanabhan T. J (2006) in their study was initiated with the objectives of
identify the individual characteristics, family environment and external variables that determine
women entrepreneurs and working in a below poverty line community. The study had shown
positive influence of the contribution of both women entrepreneur and working women to the
below poverty community development.
Anna, Chandler, Jansen and Mero (2000) proposed a model combining venture efficacy, career
expectations, and individual context as determinants of industry selection. Women in traditional
businesses had higher venture efficacy for opportunity recognition and higher career expectations
of life balance and security and placed more importance on the financial support received from
others. Non-traditional owners had higher venture efficacy for planning and higher career
expectations for money or wealth.
Antony Valsamma The study of the women entrepreneurs was undertaken with a view to
understand the nature and condition under which they are functioning and the problems and
challenges faced by them in course of their entrepreneurial pursuits. The study reveals that Textile
and tailoring, food processing, gift shop, stationary stores, are the conventional areas that are
dominated by women entrepreneurs. Secondly, they were found that banks are coming forward to
finance the business ventures for educated women.

Beena C. and Sushama B. (2007) focused their study on self-employed women in unarranged
sector. Objectives of their study were (1) To study the motivational factors responsible to start the
enterprise. (2) To study the association between motivational and their perception of success. It
was observed from interactions with these women that the financial return of these women was a
very strong motive not only to start but also to carry on with this enterprise over period of 5 years.
73 percent of the entrepreneurs mentioned that, they are very successful & they are planning to
expand their business.
C. Arvind and S. Renuka (2003) conducted the study to examine the profile of women
entrepreneur, motivation and facilitating work home role conflict faced by women entrepreneurs.
The researcher found that the important factors which motivated the women towards
entrepreneurship are self interest in that particular area of enterprise and inspiration from others
success. The facilitating factor that had an impact in maintaining the enterprise successfully were
self-experience, interest, family’s help and support.
Gundry and Welsch (2001) compared women-owned businesses that exhibited high levels of
growth with low or no growth businesses in order to understand the relationship between strategic
choices paths and the firms’ growth orientation. High-growth women entrepreneurs differed from
low growth women entrepreneurs along the following dimensions: selection of strategies that
focused on market expansion and new technologies, greater intensity of commitment to business
ownership, and willingness to incur greater opportunity costs for the success of their firms.
Holliday and Lether by (1993) conducted a study of how women integrate the business and social
lives. The researcher drew heavily on sociological theory to interpret women’s roles in small
businesses, particularly those roles related to authority.
Kole Swapna, Aryakumar (2005) develops an integrated approach towards promotion of women
entrepreneurship in the rural economy. The study reveals that to make rural women as strong as
economy drivers, government and non-government organizations have taken a number of
Singh Shailendra and Saxena S. C. (2000) in their work related to ‘Women entrepreneurs of
Eastern up challenges and strategies of empowerment’ have tried to enlist the challenges
experienced by these women entrepreneurs and have also suggested ways & means to empower
them to handle these challenges They found that women entrepreneur’s of eastern U.P. struggle
against many odds .

3. Research Gap
Based on the review of literature the study will attempt to capture some research gaps:
1. Participation of women of both rural and urban areas is taken as a parameter in assessing
economic development.
2. Women participation in MSMEs and SSI will be assessed.
3. Socio-economic status as well as the financial condition of rural and urban women
entrepreneur will be are assessed.
4. Role of SHG is given due importance.
5. Case study of few successful women entrepreneurs will be discussed.

4. Need for the Study:

The Government of Maharashtra has implemented all the welfare schemes framed by
Government of India as well as the State has been giving all the priority to the women as per the
Constitution of India. The Government has formulated thousands of women self-help groups and
providing them loan through Bank linkage with sufficient subsidy to make them financially sound
through different schemes such as Mission Shakti, WEP (women’s Economic Programme) and
swayamsiddha etc (by different Departments such as Department of Panchayati Raj and
Department of Women and Child Welfare); also providing seasonal training for their capacity
building, marketing support etc. MUDRA bank is also one recent attempt which has gone
illustrious in recent days. Still it has been observed that women are not able to reach to the
mainstream of the society. If compared to other states of India the women in Maharashtra lack
behind their status socially and economically. Be it a developed district or an underdeveloped one
women in Maharashtra find it difficult to overcome the challenges. However, the existing lacuna
in the formulation and execution of the policies has not changed the grass-root situations to a great
extent of women in rural Maharashtra. There has been multiple approach to make women
prominently visible in development scene of Maharashtra. Therefore, this study will attempt to
analyze the structure, performance and impact of microenterprises on the rural women in
Maharashtra. The problems associated with empowerment need to be outlined, and to suggest the
possibilities to remove major obstacles obstructing the empowerment of rural women of

5. Research Objective
The research makes an attempt to analyze women’s participation in entrepreneurial activities so as
to highlight the contribution of women entrepreneurs towards economic development. In the
process it further attempts to examine the facilitating factors as well as impediments that this class
face in running their units.
1. To assess the socio-economic status of rural as well as urban women.
2. To examine the challenges faced by the women of rural and urban areas in participation in
entrepreneurial activities.
3. To know the role played by SHGs in Women Entrepreneurship Development.
4. To publicize different government schemes related to advantages of women participation
in SHG or Entrepreneurship to the women (with the help of extension unit).

6. Proposed Research Methodology

Exploratory Research
Interviews are often used in exploratory research for data collection. The purpose of the research
interview is to explore the views, experiences, beliefs and motivations of individuals on specific
matters. Interviews help in gathering detailed insights about a specific issue from target
participants. The target industry for the study is small scale sector i.e. the firms having investment
in plant and machinery at an original cost not exceeding Rs.1 crore. The population of the study is
confined to the women entrepreneurs in selected district.
Data Collection

The study will be undertaking both primary and desk research. Primary data will be
enumerated from a field survey in the study region through questioner, interview and through
observations on the field. Secondary data will be collected from different reports published by
various Government and Non-Government sources that are authentic.

Sample Size

The study is expected to focus on the sample clusters. Mostly the study will follow cluster sampling
and area sampling. Since the members are expected to be large in number, they may and grouped
meaningfully to undertake random sampling accordingly. Sample size will be decided after having

concrete information on data set from primary survey. The list of SME owners is obtained through
the directories of MSME-Development Institute, selected districts of Maharashtra.
Data Analysis Techniques

The study will identify appropriate statistical tools for the analysis of data. Mostly the study
expects to undertake panel data analysis to undertake across group and over the time performance
analysis. This expected to undertake appropriate models to capture cluster heterogeneity and
possible issues of endogeneity in the studied sample. The study is expected to use statistical soft
wares like SPSS and STATA largely for econometric modelling.

7. Tentative Chapterization

Following is the scheme of tentative chapteriszation of the present study:

Chapter 1: Introduction and Problem Statement

Chapter 2: Review of Literature

Chapter 3: Research Methodology

Chapter 4: Sample Survey and Data Analysis

Chapter 5: Findings of the Study

Chapter 6: Conclusions, Suggestions and Recommendations

8. References

Amuthalaxmi P., Kamalanabhan T. J., (2006): ‘Women Entrepreneurs in Micro Enterprises:

An Empirical Study’ SEDME March 2006
Anna, Chandler, Jansen and Mero (2000): ‘Women Business Owners in Traditional and Non-
traditional Industries’. Journal of Business Venturing, Volume & Issue No. 15 (3), PP. 279-303.
Antony Valsamma, (2007): ‘Women Entrepreneurs on the Upbeat’ Southern Economist,
March 1, 2007.

Beena C. and Sushama B., (2003) ‘Women Entrepreneurs Managing Petty Business: A study
from Motivational Perspective.’ Southern Economist, May 15, 2003
C. Arvind and S. Renuka, (2001): ‘Women Entrepreneurs: An Exploratory Study’, SEDME,
Sept 2001
Gundry and Welch (2001): ‘The Ambitious Entrepreneur: High Growth Strategies of Women-
owned Enterprises’, Journal of Business Venturing, Vol. & Issue No 16 (5), PP. 453-470.
Holliday and Letherby (1993): ‘Happy Families or Poor Relations? Familial Analogies in the
Small Firm.’ International Small Business Journal, Volume and Issue Nos. 11 (2), pp. 54-63.
Kole Swapna, Aryakumar, (2005): ‘Facilitating Entrepreneurship amongst Rural Women
Issues and Challenges’, Asian Economic Review, Vol.47 No.3. Dec Issue 2005
Singh Shailendra and Saxena, (2000): ‘Women Entrepreneurs of Eastern up Challenges and
Strategies of Empowerment, Indian Journal of Industrial Relations Communication, Vol. 36, No.
1, July, 2000.
Tripathi, S. N. and Dass, C. R. ‘Tribal Women in India’, Tribal women in Traditional Crafts
and Cottage Industries.
Usha Umesh, (1999): ‘Women Entrepreneurs in the Informal Sector: A Study of Kerala,
Southern Economist, Dec15, 1999 pp 23.
Vel Birley (1989), ‘Female Entrepreneurs: Are they really any Different? Journal of Small
Business Management Volume and Issue Nos. 27 (1), PP. 32-37.