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Women Entrepreneur within the MSME Sector & Gujarat

and , September 5, 2023, 0 Comments

Entrepreneurship is generally related to creation, recognition and utilization of opportunities. As an important societal change agent the entrepreneurs create vision for both men and women in accomplishing their significant deeds. The women in India have presented their leadership capability to attain the highest echelons in every walk of life, like entrepreneurs, scientists, civil servants, airline pilots and others.

The state of Gujarat is encouraging their women entrepreneurs to pursue their dreams by identifying the various enabling factors, limiting factors and prospective factors. In this era of globalization and growing urbanization, women are dominated in every field than their male counterparts by acquiring more education. The women entrepreneurs have faced a lot of hardships to become financially independent and during the journey self-determination has raised their awareness to voice against discriminatory practices.

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According to experts, greater economic independence of women is promoting geo-political stability and world peace. The Indian women entrepreneurs have faced social constraints and family opposition to establish their own ventures and as such it can be defined in terms of achievement as well as accomplishment. In India women constitute almost 50% of India’s population and their mere contribution is only 5% of the private enterprises. On the basic criteria of educational background, professional expertise, entrepreneurial attitude and cultural background the success ratio of women entrepreneurship differs from state to state. By analysing the above criteria, the following can be stated as more progressive states in comparison to others- Maharashtra, Gujarat, Kerala, Punjab, Haryana, Rajasthan and Uttar Pradesh.

The people of Gujarat are business-minded and as such they spread their acumen in USA, Canada and many other Western horizons. During 1970 the Centre for Entrepreneurship Development (CED) was established in the state to refine their trading expertise for flourishing their business. In order to boost the women entrepreneurship skill within the state the CED started various programs to train the women in this domain. However, since independence the Government of Gujarat has adopted several steps for encouraging their women to take up entrepreneurial careers. In recent times the same trend is carried on by the government, both at the central and state level, to encourage the women entrepreneurs in making a significant contribution to the Indian economy. Throughout the country nearly three million micro, small and medium enterprises exist with full or partial female ownership. These women-owned enterprises collectively contribute 3.09% of industrial output and employ over 8 million people. Although approximately 78% women enterprises belong to the service sector, yet it has been observed that women entrepreneurship is largely skewed toward smaller sized firms.

Further, it is also observed that 98% women-owned businesses are micro-enterprises and as such the formal financing becomes a key issue for the growth of women-owned businesses. As all these formal financing sources pose a key barrier to women entrepreneurs, therefore 90% of their financial requirements are being met through informal sources. In 2012 total finance requirement of women-owned MSMEs was around INR 8.68 trillion (USD 158 billion). Within this segment small enterprises are in forefront for financial needs mainly due to unmet working capital and investment financial requirements. However, women-owned medium-scale enterprises acquire 0.01% of the total MSME sector with the financial requirements of around USD 4 billion, accounting for 2% of the total requirement. In 2012 total supply of formal finance to women-owned MSMEs was around INR 2.31 trillion (USD 42 billion), which resulted in a finance gap of INR 6.37 trillion or 73% of total demand.

From the statistical data of globalized banks, like Westpac in Australia, Wells Fargo in the United States and Royal Bank of Scotland, it is quite obvious for bridging funding gaps the financial institutions proactively want to engage with women entrepreneurs. As part of their overall SME strategies the financial institutions have created specific approaches for their women entrepreneurs which subsequently increased their number of women clients, both as entrepreneurs and consumers. Besides stronger repayment track records the women-owned businesses are acknowledged for recording 30 to 50% lower non-performing loans. Apart from greater potential for cross sales they are likely to access two or three more products as compared to their male counterparts. Hence, as a consumer segment they are more profitable for banking institutions. As such, financial institutions are willing to tap this profitable segment with products and services customized to the needs of women-owned MSMEs.

In India women entrepreneurs are largely concentrated around micro enterprises and as such almost 98% women enterprises are in this sector. Further, 90% of women-owned enterprises are in the informal sector. The following table will present the geographical location of women-owned MSMEs across India.women-entrepreneurship-gujarat-msme-marketexpress-in

The above geographical distribution of women-owned MSMEs can be defined from the radical shift in the role of women in Indian society. Before going to analyse the state of women entrepreneurs in Gujarat it is necessary to present the evolution phases of Indian women and the following chart will help in this regard.women-entrepreneurship-world-msme-marketexpress-in

The Gujarat – MSME Report, 2013 has documented the state of women entrepreneurship and according to this report the journey started with community enterprises. As at the inception it was a social program of community development and women empowerment, therefore it can be stated that the Community Development Program of 1950s and Women’s Co-operative Movement of 1960s were the fundamental for accumulating the women power to introduce the group economic activities. During the 1990s, these organizational initiatives by federal and state governments were acting as a tool for poverty reduction. With its State-sponsored poverty reduction mission, the government encouraged the women establishments to steadily merge with the larger stream of national microfinance movement. In spite of encouraging those women-owned MSME initiatives, it is difficult to track how many of such initiatives were added to the ecosystem of Indian business.
However, Gujarat ranks among the top three entrepreneurship friendly states in India. But most pessimistically the state carries the legacy of non-involvement of women in business. With the increased role of technology in the society, the business culture of Gujarat has started to change from the recent past. The Government of Gujarat has adopted various initiatives to encourage their women to start their own business as part of their movement in promoting economic independence and integrating gender as well as family entrepreneurship along with the rest of India. The state of Gujarat has acquired the position of uniqueness due to its vast culture and abundant entrepreneurship spirit enrooted within its business tradition. Further supported by their strategic geographical location, the government initiatives are concentrated on women entrepreneurship and the rise of ‘Vibrant’ state image has attracted the attention of business communities, nationally as well as internationally.

The Below Poverty Line women are managing the cooperative framework in Gujarat, like Anand District Milk Producers Union Limited (AMUL) and ‘Shri Mahila Griha Udyog Lijjat Papad’. The women empowerment in Gujarat has been started by AMUL and Shri Mahila Griha Udyog as in the latter case seven Gujarati women brought about equal opportunities in the women entrepreneurial segment. AMUL in this regard has been identified as the catalyst to accomplish the objective of Operation Flood (OF) or White Revolution of India and subsequently being able to create a nationwide milk grid in India. During the initial phase of Operation Flood training was provided to women in modern animal husbandry practices. The process gained momentum as special incentives were offered to women for improving their participation in governance of cooperatives (AMUL n.d.). All these efforts were concentrated around motivating enhanced partaking of women in this movement.

The positive side of this effort is reflected in the annual report (2001-2002) of the National Dairy Development Board (NDDB). During the period of 1986-2002, the number of women cooperative members increased from 0.62 million in 1986-87 to 2.47 million in 2001-02. By following the same outlook ‘Shri Mahila Griha Udyog Lijjat Papad’ established by seven Gujarati women in Mumbai during the period of 1959 and this initiative is based on four founding principles, namely collective ownership, self-reliance, cooperation and profit sharing. Several research studies have been conducted on the problems the women entrepreneurs faced during their journey to become self-reliant. It has been observed that during the initial phase the women entrepreneurs faced the financial accessibility problem along with effective management of their business ventures. Apart from these they suffered from lack of expertise in acquiring as well as dissemination of information for providing effective operational solutions. Although like other parts of India in Gujarat also women have been showing improved productivity, yet the insufficient technical knowledge still poses problems to women entrepreneurs. However, several ICT related government schemes have been introduced to assist the women entrepreneurs in improving their technical knowledge with climbing the value chain.

The struggle of women entrepreneurs in Gujarat is not different from women entrepreneurs in India who are representing a dynamic group of all new vigour. They have survived the demands at home, family oppositions, cultural inhibitions as well as lack of support, resources and opportunities. In spite of all these drawbacks, they are exploring the new vistas of economic participation with various push and pull factors. Self-determination, personal growth, learning and adventurous attitude as well as self-achievement can be defined as some of the pull factors. Whereas gender inequality, stressful working hours, poverty, insufficient family income, failure to manage work life balance along with threats and cases of harassment are some of the push factors. Nowadays women entrepreneurs are considered as an important source of economic growth due to creating jobs for themselves and others along with providing different solutions to society in terms of management, organization and business problems.