ISSN No-2031-5063
Vol.1,Issue.I/July 11pp.1-4
Research Paper - Commerce
ROLE OF MICRO FINANCES IN WOMEN ENTREPRENURSHIP
Dr.V.S. Mangnale
Director:- Institute of Business Management, Kamalapur Tal: - Sangola, District Solapur 413307 Abstrac:-Women are the nuclei of a nation. They are the real builder and molder of a Nation's Destiny. The position and status of women in any society is an index of its civilization and progress. Women entrepreneurship development is an essential part of human resource development. The development of women entrepreneurship is low in India, especially in the rural areas. Entrepreneurship amongst women has been a recent concern. Women have become aware of their existence their rights and their work situation. The emergence of women entrepreneurs and their contribution to the national economy is quite visible in India. Women are generally perceived as home makers with little to do with economy or commerce. But this picture is changing. In Modern India, more and more women are taking up entrepreneurial activity especially in medium and small scale enterprises. Even as women are receiving education, they face the prospect of unemployment. In this background, self employment is regarded as a cure to generate income .The Planning commission as well as 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. You can tell the condition of a nation by looking at the status of its women Jawaharlal Nehru. The Self Help Groups (SHGs) have paved the way for economic independence of rural women. The members of SHGs are involved in Micro Entrepreneurships. Through that, they are becoming economically independent and providing employment opportunities to others. This article deals with women entrepreneurship through micro finances and the advantages of entrepreneurship among the rural women. Entrepreneurship has long been recognized as the key to economic growth. The role of entrepreneurs, especially the small scale entrepreneurs who successfully exploit the industrial and commercial opportunities on a small scale can not be under estimated. Small scale enterprises help in enhancing economic growth because they have better chance to carry out innovations, new means of production, new markets, new materials, and new forms of organizations that lead to increased productivity. In his studies relating to entrepreneurship Matlay (2006)1 posited that conceptual and contextual convergence is of paramount importance to the ongoing debate of whether entrepreneurs are born or made and to issues surrounding entrepreneurship education and its impact on entrepreneurial activities. Schutte (1995)2 suggested that the male entrepreneurs have been extensively studied and the focus has now shifted to the study of female entrepreneurs. Hisrich and Brush (1984) 3mentioned that most of what is known about entrepreneurs, their background, motivation for starting a business and business problems faced by them are based on studies of
Miss. J.V. Chavan ,Miss. V.A. Gaikwad
Lecturer, Department of commerce & management, Sangola College, Sangola, District Solapur-413307. male entrepreneurs. It is important to differentiate entrepreneurs on the basis of gender if women entrepreneurship is to be promoted (John, 2004)4.Women entrepreneurship has come a long way in India. In urban areas, more and more women are successfully running day care centers, placement services, floriculture, beauty parlors and fashion boutiques. Even in rural areas, self-help groups are empowering women to start their own micro business. In certain businesses that are traditionally male dominated, women are looked at with suspicion on their seriousness of managing the business with a long-term perspective. Renal et al., (2004)5 suggested that women of today are in several ways different from the women of past years. 1.Matlay, Harry (2006), "Researching Entrepreneurship and Education", Emerald Group Publishing Ltd., Vol. 48 (8/ 9), pp. 704-718. 2.Schutte, J. L., Boshoff A. B. and Bennett, H. F. (1995), "Towards Establishing Biographical and Business Background Profiles of Entrepreneurs from Two Ethnic and Gender Groups", Journal of Industrial Psychology, Vol. 21 (3), pp. 82-89. 3.Hisrich, R. D., Brush, C. (1984), "The Women Entrepreneur: Management Skills and Business Problems", Journal of Small Business Management, Vol. 22 (1), pp. 3037. 4.John, J. (2004), "Development of India: Gender Dimensions", Labour and Development, Vol. 10 (1), pp. 113125. 5.Rinkal, Divya and Sneha. (2004), "Women Entrepreneurs-Critical Issues." Proceedings of the 11th Summer Camp on "Entrepreneurial Stimulation for Children from May 2-7, 2004. During the present times, they seek social and economic independence and are prepared to take risk for the same. Mitchell (2004)6 found that women entrepreneurs tend to be motivated by the need to provide security to their families and by their family circumstances. Women entrepreneurs are motivated by the need to be independent, economically and otherwise. Entrepreneurship allows women to combine caring for their family with bringing in the money needed for day-to-day survival. This trend has also been visible in several Asian countries including Indonesia and Singapore. In the opinion of Watson (2003)7 there are quite a number of potential systematic differences between male and female owners, that might explain why female-owned businesses appear to under perform than male-owned businesses. The prominent factors are age of female owned business, family commitments, lesser access to capital, different education levels, prior experience of business and attitude towards risk. According to Jesselyn (2004)8 developing countries should also tap the potential of women entrepreneurs. Women are generally more serious entrepreneurs in developing countries, even though their businesses are small. They repay loans more reliably than men, and use their earnings for the benefit of families and for reinvestment.
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Women entrepreneurship development is an essential part of human resource development. The development of women entrepreneurship is very low in India, especially in rural areas. Women have become aware of their existence their rights and their work situation. The progress is more visible among upper class families in urban areas. Entrepreneurship amongst women has been a recent concern. This paper focuses on women entrepreneurship. The paper talks about the status of women entrepreneurs and the issues, problems and challenges faced by them when they ventured out to carve their own niche in the competitive world of business environment. Entrepreneur stop is an innovative and dynamic process, whereby, a new enterprise is created. It is an important segment of economic growth. Entrepreneur is a catalytic agent of change, which generates employment opportunities for others. Entrepreneurship amongst women is a recent phenomenon. When an enterprise is established and controlled by women, it not only boosts economic growth, but also has many desirable outcomes. Jawahar Lal Nehru has remarked "when a women moves forward, the family moves, the village moves and the nation moves." Women entrepreneurship as defined by Government of India, the women entrepreneur is an entrepreneur, who runs an enterprise owned and controlled by her and having minimum financial interest up to 51 percent of capital and giving at least 51 percent of the employment to women." 6.Mitchell, B. C. (2004), "Motives Of Entrepreneurs: A Case Study Of South Africa", The Journal of Entrepreneurship, Vol. 13 (2), pp. 167-183. 7.Watson, John (2003), "Failure Rates for FemaleControlled Businesses: Are They Any Different", Journal of Small Business Management, Vol. 41 (3), pp. 262-77. 8.Jesselyn, Mary (2004), "The Formal Institutional Framework of Entrepreneurship in the Philippines: Lessons for Developing Countries", the Journal of Entrepreneurship, Vol. 13 (2), pp. 185-203. Women have innate flair for entrepreneurship. They are endured with intuition that helps them make right choices even in a situation where experience and logic fails. They are the natural net-workers and relationship builders, forging powerful bonds and nurturing relationship with clients and employees alike. In nutshell, they are as competent as their male counterparts if not better. Growth of women entrepreneurs can be a vehicle of their socio-economic empowerment. Socio-economic empowerment is a situation when women have control over her life and resources. A women entrepreneur can retain her income and use it at her own discretion at household level. Financial independence leads to social empowerment. Women entrepreneurs can play powerful role in confidence building and creating awareness in other women to promote self-reliance. On the other hand, women entrepreneurs have to face more problems than men entrepreneurs. In most of the cases, women do not have access to productive resources. Their risk taking ability is less. They have to devote time to the family and maintain a balance between their family responsibility and business.In India, though women have played a key role in the society, their society. Origin and Concept of SHGs The origin of SHGs is from the brainchild of Grameen Bank of Bangladesh, which was founded by Mohammed Yunus. SHGs were started and formed in 1975. In India NABARD is initiated in 1986-87. But the real effort was taken after 1991-92 from the linkage of SHGs with the banks. A SHG is a small economically homogeneous
affinity group of the rural poor voluntarily coming together to save small amount regularly, which are deposited in a common fund to meet members emergency needs and to provide collateral free loans decided by the group. (Abhaskumar Jha 2000)9. They have been recognized as useful tool to help the poor and as an alternative mechanism to meet the urgent credit needs of poor through thrift (V. M. Rao 2002)10 SHG is a media for the development of saving habit among the women. SHGs enhance the equality of status of women as participants, decision-makers and beneficiaries in the democratic, economic, social and cultural spheres of life. (Ritu Jain 2003)11. The basic principles of the SHGs are group approach, mutual trust, organization of small and manageable groups, group cohesiveness, sprit of thrift, demand based lending, collateral free, women friendly loan, peer group pressure in repayment, skill training capacity building and empowerment (N.Lalitha)12. 1.Abhaskumar Jha (2004), Lending to the Poor: Designs for Credit, EPW, Vol. XXXV, No.8 and 9. 2. Rao, V.M. (2003), Women Self Help Groups, Profiles from Andhra Pradesh and Karnataka, Kurukshetra, Vol. 50, N0.6, pp. 26-32 3. Ritu Jain, (2003), Socio-Economics Impact Through Self Help Groups, Yojana, Vol. 7, No.7, pp.11-12 4. Lalitha, N. Women Thrift and Credit Groups- Breaking the Barriers at the Gross Roots, Peninsular Economist, Vol. XII No. 2, pp. 188-195 Functions of SHGs Create a common fund by the members through their regular savings. Flexible working system and pool the resources in a democratic way. Periodical meeting. The decision making through group meeting. The loan amount is small and reasonable. So that easy to repay in time. The rate of interest is affordable, varying group to group and loan to loan. However it is little higher than he banks but lower than the money lenders. From the previous studies related to SHGs, it is clearly understood that the SHGs are tool to promote rural savings and gainful employment. Through this the rural poverty is reduced considerably. Therefore women members are economically independent and their Contribution to household income is also increased. The present study is also focusing the economic improvement of women after them joining SHGs. Micro finance Micro finance is a broad term that includes deposits, loans, payment services and Insurances to poor. The concept of micro finance and micro credit are used interchangeably. But micro credit does not include savings; hence micro finance is more appropriate term (Manimekalai, 2004)13. The concept is understood as providing poor families with very small loans to help them engage in productive activities or grow their tiny businesses. A success indicator of micro finance lies in a ' credit-plus' approach, where the focus has not only been on providing credit, but to integrate it with other development activities. Today micro finance is very much in the agenda of public policy and it has been increasingly used as a vehicle for reaching the otherwise unreachable poor in the country. The micro finance has been emerging as a significant instrument to address the problem of lack of access to credit
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for the poor and also indirectly attacking the poverty and unemployment. The credit goes to the pioneer attempt made by Prof.Mohammed Yunus in Bangladesh who introduced the concept of micro credit for the first time among the poor women in late seventies under the Grameen Bank and later got momentum in almost every corners of the world. The experiences of the specialized bank such as Bank Raknat Indonesia(BRI) of Indonesia, and Bank of Agriculture and Agriculture co-operatives(BAAC) of Thailand, Grameen Bank of Bangladesh, NABARD India in the field of micro finance have conclusively proved that banking with poor can be viable and sustainable. Rastriya Mahila Kosh (RMK) is the most significant intervention launched in 1993 with the objective of meeting the credit needs of the poor asset less women, involving Self Help Groups (SHG).Economic empowerment results in women's ability to influence or make decision, increased self confidence, better status and role in household etc. Micro finance is necessary to overcome exploitation, create confidence for economic self reliance of the rural poor, particularly among rural women who are mostly invisible in the social structure. 1.Manimekalai, N., 2004, Impact of various forms of micro financing on women. Dept. of Women and Child Development, Ministry of Human Resource Development, Govt.of India. Microfinance programmes are currently being promoted as a key strategy for simultaneously addressing both poverty alleviation and women's empowerment. Where financial service provision leads to the setting up or expansion of micro-enterprises there are a range of potential impacts including: * Increasing women's income levels and control over income leading to greater levels of economic independence. * Access to networks and markets giving wider experience of the world outside the home, access to information and possibilities for development of other social and political roles. * Enhancing perceptions of women's contribution to household income and family welfare, increasing women's participation in household decisions about expenditure and other issues and leading to greater expenditure on women's welfare. * More general improvements in attitudes to women's role in the household and community. This paper puts forward how micro finance has received extensive recognition as a strategy for economic empowerment of women. This paper seeks to examine the impact of Micro finance with respect to poverty alleviation and socioeconomic empowerment of rural women. An effort is also made to suggest the ways to increase women empowerment. This paper seeks to examine the impact of Micro finance with respect to poverty alleviation and socioeconomic empowerment of rural women. An effort is also made to suggest the ways to increase women empowermentWomen must be directed to solve their own problems in their own ways. Our Indian women are as capable of doing as any in the world. - Swamy Vivekananda 1.1 Concept of Entrepreneur- The word ' entrepreneur' derives from the French word "Entreprendre" (to undertake) .in the early 16thCentury it was applied to persons engaged in military expeditions, and extend to cover construction and civil engineering activities in the 17th century, but during the 18th century , the word
'entrepreneur' was used to refer to economic activities. Many authors have defined 'entrepreneur' differently. Generally, an entrepreneur is a person who combines capital and labour for production. According to Cantillion "entrepreneur is the agent who buys means of production at certain prices, in order to sell at prices that are certain at the moment at which he commits himself to his cost". According to P.F Drucker he is one who Always (1) searches for change (2) responds to it (3) exploits it as an opportunity." 1.2 Concept of women Entrepreneur Enterprise-" A small scale industrial unit or industry related service or business enterprise, managed by one or more women entrepreneurs in a concern, in which they will individually or jointly have a share capital of not less than 51% as shareholders of the private limited company, members of co-operative society". 1.3 Role of Women as an Entrepreneur 1) Imaginative: It refers to the imaginative approach or original ideas with competitive market. Well-planned approach is needed to examine the existing situation and to identify the entrepreneurial opportunities. It further implies that women entrepreneurs have association with knowledgeable people and contracting the right organization offering support and services. 2) Attribute to Work Hard: Enterprising women have further ability to work hard. The imaginative ideas have to come to a fair play. Hard work is needed to build up an enterprise. 3) Persistence: Women entrepreneurs must have an intention to fulfill their dreams. They have to make a dream transferred into an idea enterprise; Studies show that successful women work hard. 4) Ability and desire to take risk the desire refers to the willingness to take risk and ability to the proficiency in planning making forecast estimates and calculations. 5) Profit Earning Capacity: She should have a capacity to get maximum return out of invested capital. A Woman entrepreneur has also to perform all the functions involved in establishing an enterprise. These include idea generation, and screening, determination of objectives, project preparation, product analysis, determination of forms of business organization, completion of formal activities, raising funds, procuring men machine materials and operations of business. 1.4 Categories of Women Entrepreneurs Women in organized & unorganized sector Women in traditional & modern industries Women in urban & rural areas Women in large scale and small scale industries. Single women and joint venture. Objectives: 1.To study the socio-economic profile of SHG women in rural micro enterprises. 2.To identify the factors enabling rural women to become entrepreneurs through SHG and to examine the nature of their economic activities. 3.To compare the changes in income, expenditure and savings of members joining self help group. 4.To understand the problems faced by the rural micro entrepreneurs in running the enterprises. Scope and Limitation of the Study:The scope of study is related with women of self help groups in Sangola Tahshil in Solapur district in
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Maharashtra. The scope of the research shall be in reliance with the methods and instruments of research used in this study. Special attention has been given to carry out the research in a manner such that it contributes to the overall study of problems of rural women entrepreneurs. Limitation of the Study:Time is major limitation for research work. 1.Only self help groups women considered for study purpose. 2.Few women of help groups are involved in entrepreneurship activity. Research Design and Methodology Development of Tool: The interview schedule was developed by the investigator that was based on the review of literature related to the study. Data Collection: The tool was developed in Marathi for easy understanding. After finalizing the tool the investigator personally contacted all the respondents and collected the information. A) Primary Data:First hand information collected by the researcher is called primary data. The procedure for collecting primary data as follows. a) Sample size Total 100 sample respondents collected from women of self help groups in Sangola Taluka in Solapur District. b) Sampling Technique: Simple random sampling technique is applied for selecting the respondents from self help groups. The following sources are applied for collecting the information's from respondents such as well structured questionnaire, interview method, observation method. B) Secondary Data:The second hands information collected by researcher is called secondary data. The secondary data is collected from the following published and unpublished sources. Sources for collecting secondary data are Research Reports, Thesis, Books, Journals, Periodicals, committee reports, Websites. Analysis of Data: The information gathered from rural women entrepreneur women are tabulated and analyzed by using, frequency and percentage. Data Analysis and Interpretation Table No.1 Education Level of Women of self help groups .
Education Level Illiterates Below S.S.C S.S.C H.S.C Graduate Post Graduate Total No. of Women 17 29 25 15 10 04 100 % 17 29 25 15 10 04 100
It is observed that in Table No.2 the 24% women of self help groups are farming workers and 05% women are doing other type of works. Only 08% women are self employed. The majority of 51% women are housewife and 08 % women are doing services in different areas. Table No.3 Equipments using by Women at home
Equipments Radio T.V. Tape Refrigerator Gas Cooker Mixer Machine Bicycle Motor cycle Car Other No. of Women 60 46 22 20 40 74 60 35 72 38 04 ------------% 60 46 22 20 40 74 60 35 72 38 04
It is observed that in Table No.3 the 74% women of self help groups are using pressure cooker and 60% women using Radio and Mixer. 46% women are using TV and 40% using Gas along with only 20% women using Refrigerator. 72% women are using bicycles and 38% women using motor cycles and only 04 % women are using car at home. This table indicates that a majority woman belongs to lower class family. Table No.4 Family Expenses of Women
Expenses Food Education Illness Home Construction Repairing of home Festival Traveling Marriage of Son/Daughter Other Expenses No. of Women 65 39 15 05 06 20 10 20 05 % 65 39 15 05 06 20 10 20 05
It is observed that in Table No.4 the 65% women of self help groups did their expenses on foods and 39% expenses on education. 15% women did their expenses on illness and 5% on home constructions. 20% expenses did for celebrating Festival and 10% on traveling. Table No.5 Savings per Month of Women
Savings 50 Rs. 100 Rs. 150 Rs. 200 Rs. 250 Rs. 300 Rs. Total No. of Women 24 45 13 16 --02 100 % 24 45 13 16 --02 100
It is observed that in Table No.1 total 17% women of self help groups are illiterates and 29% women are below SSC. 25% women complete their education up to SSC and 15% up to HSC. 10% women are the Graduate and only 4% women are post graduate. Near about total 70% women are taken education below the HSC. Table No.2 Current Business of Women
Current Business Farming workers Other laborer Self employment Service Housewife Other works Total No. of Women 24 05 08 08 51 04 100 % 24 05 08 08 51 04 100
It is observed that in Table No.5 the 24% women of self help groups are savings only 50Rs. per month and 45% women save 100 Rs. Per month. Only 13% and 16% women are doing their savings 150rs. And 200 Rs .respectively per months. Near about 2% save 300 Rs. Per months. There is no any response found on the savings 250 Rs. With the help of this table it shows that near about 60% women are poor on the per month saving matter. Table No.6 How Women Contribute their Savings
Options Self Earning From Husbands Earning Saving from home expenses Total No. of Women 20 50 30 100 % 20 50 30 100
It is observed that in Table No.6 the 20% women of self help groups contribute savings from self earnings and 30% women are contributing savings from their home expenses. The majority 50% women contribute their savings
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from husband's earnings. With the help of this table it shows that near about 50% women are not doings savings independently. Table No.7 Reasons for Taking Loans
Reasons Home Building Wedding of Son/Daughter Repayment of Loan Business Farming Others Total No. of Women 08 08 10 16 02 02 46 % 08 08 10 16 02 02 46
It is observed that in Table No.7, only 8% women of self help groups are taking loans for home buildings respectively. 08% women are taken the loans for the purpose of wedding of Son/Daughter and 16% women are taking loans for business purpose. Only 02% and 02% women taking loans for others and farming. Table No. 8 How women attract towards SHG
Reasons Saving Purposes Self employment Economic stability To see other women For unity of women Starting and Development of business No. of Women 30 42 40 20 10 16 % 30 42 40 20 10 16
lead to inability in earning sufficient incomes. The reasons as reported by the sample were lack of experience and inconvenience in procuring raw material. Lack of Awareness about Governmental Programmers: Government gives great support for entrepreneurial development especially in rural areas. It also runs special programmes and schemes for women. The support from government comes by way of financial, technical support, and assistance in procuring raw material, establishment of entrepreneurial unit and in other ways like subsidies, concessions and tax rebates. Financial Problems: The financial problems in the rural entrepreneurship were yet another major problem area. The various financial problems, which are faced by entrepreneurial women and feared about by non entrepreneurial women. The major problem reported by both the categories was lack of awareness about the procedure of receiving finance. Conclusions:Women are not into business for survival but to satisfy their inner urge of creativity and to prove their capabilities. It is evident from the study that women are ready to face the challenges associated with setting up of business. Society is very much receptive to the concept of women entrepreneur, so is the family. Papad, pickles are the things of the past, now with new and innovative business, women entrepreneurs are fast becoming a force to reckon with in the business world. Maximum women have entered into business in thirties and most of them are married. Computer, IT related and consultancy services are upcoming areas, so most popular amongst younger women. It is the pull factors i. e. their urge to be self-dependent, supplement family income, achieve social status, satisfy their creative urge have motivated them to be entrepreneurs, more than the push factors like non-availability of job, dissatisfaction in job, etc. Education, training and skill have played an important role in their being into business. Role of government agencies in the growth of women entrepreneur is negligible. Women education is contributing to a great extent to the social transformation. The future will see more women venturing into areas traditionally dominated by men.
It is observed that in Table No.8 only 30% attract towards SHGs for saving purpose and 42% for their become identity. 40% women attract for economic stability. 20% women attract to see other women and 10% for unity of women. 16% women attracts for starting and development of business. Table No. 9. Economic Growth through Self Help Group
Answer Yes No No. of Women 75 25 100 % 75 25 100
It is observed that Table No.9 the 75% women of self help groups make their economic development through Self Help Groups and 25% women are not feel any type of economic growth of family. Table No.10 Areas in which women Developed
Areas Mentally satisfied Home building Business Economic growth Free from family responsibility No. of women 26 09 20 51 30 % 26 09 20 51 30
It is observed that in Table No.10 Due to participation in self help groups 26% women feel mentally satisfied and 9% women build their home with the help of self groups. 20% women developed in businesses and 51% women are economically developed due to SHGs. 30% women get free from their family responsibilities due to self help groups. Major problems faced by Women Entrepreneurs: Problems of Rural Women Entrepreneurs: An entrepreneur may face variety of problems in the environment, which can be classified into social problems, entrepreneurial problems, financial problems and problems related to environmental support. An entrepreneur may be attacked by any single problem or there may be an interactive and cumulative effect of number of problems. Entrepreneurial Problems: Entrepreneurial problems may
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