No. 95 (July-August 1996) 27

project work designed to give handson experience of assessing themarketability of a commodity or aservice. EDI Ahmedabad appears to berunning a programme on these lines inGujarat which could be replicatedelsewhere. While making thiscompulsory for girls at the high schoollevel, however, care must be taken toensure quality and the syllabus shouldbe reviewed continuously on the basisof the feedback received usingprofessional inputs.

To release women from theconstraints on mobility that societyimposes on them throughout theirlives, high school girls should be

Entrepreneurship bydefinition implies being in

control of one’s life andactivities

Getting Women into Business

Renuka Viswanathan

EMPIRICAL evidence showsthat women contributesignificantly to the running of

family businesses mostly in the formof unpaid effort and skills. The valueof this effort is underestimated bothby the families that take it for grantedand in academic studies. On the otherhand, many of the enterprises definedas being run by women (that is,enterprises in which women hold thecontrolling share) are in fact run in theirnames by men who control operationsand decision making. Programmesmeant to reach women entrepreneurscan succeed only if they take note ofthis paradox as well as of the familialand social conditioning that reducesthe confidence, independence andmobility of women.

Programmes for encouragingentrepreneurship among women aredoomed to fail or at best to succeedpartially when taken up in isolation.This is because entrepreneurship bydefinition implies being in control ofone’s life and activities. It is preciselythis independence that society hasdenied to women all along.

Promoting entrepreneurship forwomen will require an even greaterreversal of traditional attitudes thanthe mere creation of jobs for womenwould. This does not mean that weshould wait for societal change to takeplace first. But it does imply that theprogramme should go beyondsubsidies and credit allocation toattitudinal changes, group formation,training and other support services.

Training in entrepreneurialattitudes should start at the highschool level through well-designedcourses which build confidencethrough behavioral games. Thisexercise would illustrate practicalapplication of the academic knowledgebeing imparted regarding management(financial, legal, etc.) of an enterprise.This curriculum should include simple

compulsorily taught to cycle. There isproof that increased mobilitycontributes immensely to raisingconfidence levels. An additionalmeasure that may increase mobility andconfidence is to compulsorily traingirls also in the methods andtechniques of self defence.

Training in SkillsSkill development is being done in

women’s polytechnics and industrialtraining institutes. Under variousschemes like the World Banksponsored programme to upgradepolytechnics, separate institutes havebeen set up for women. From theinception these should have 100percent quality hostel facilities withadequate security arrangements, asthis is a major cause for pooroccupancy and parental disinclinationto send their daughters to such

28 MANUSHI

institutes. Under no pretext shouldinstitutes set up exclusively for womenbe converted to men’s institutes. Thecourse design should keep in mind thespecial needs of women, such as theirpreference to work from their homes,which would enable them to also fulfilltheir household responsibilities. Thisshould not, however, result inmechanically restricting them to lowtechnology linked skills traditionallybelieved to be suitable for women.Several hi-tech functions withsubstantial value addition and goodprofitability could also be undertakenwithin homes and the courses shouldbe imaginatively and innovativelydesigned.

The common practice of selectingoccupations for women on the basisthat women are only supplementaryincome providers and, therefore, donot require a full day’s wage for a fullday’s work has resulted in their large-scale exploitation. Activities in whichwomen are trained should focus ontheir marketability and profitability, andnot be routinely restricted to makingpickles and garments. A high powerand professionally involved committeemust constantly review the coursesand the curriculum on the basis ofevaluation studies and marketdevelopments. In addition to skilldevelopment, these institutes shouldalso provide practical managementinputs.

A major hurdle for trained womenis the initiation into independentprofessional work. Families routinelyprovide financial and emotionalsupport for sons that they would neverextend to daughters. Parents anddaughters together need to beconvinced that the skills learned in thepolytechnics could provide them withprofitable occupations. In women’sinstitutes, therefore, there is a strongcase for introducing an additional yearof training when the pupils who have

been taught skills are put to work intraining-cum-production workshops,whose produce is sold and incomeearned.

Appropriate training is still the keyto a successful programme to developentrepreneurship among women.There are funds available from severalsources; finding effective trainers is

the greater problem. NGOs likeRUDSET in Karnataka have succeededin achieving reasonably high successlevels, but others includinggovernmental bodies have still notreached these levels. Continuousmonitoring and improvement oftraining programmes should eventuallyspread the cult of entrepreneurshipamong young women.

Any programme for womenentrepreneurs is vulnerable to abusesby individuals who are not entitled tothe benefits. These individuals couldexploit the programme by using thetruly deserving beneficiaries as frontsfor their personal interests. Thispractice cannot be curbed byexhortation or control; womenbeneficiaries must themselves be

A Credit Scheme for WomenNon availability of credit has been a serious obstacle thwarting the

attempts of poor women to achieve economic self-reliance. In an attempt toaddress this problem, particularly for women working in the unorganisedsector, the Rashtriya Mahila Kosh (RMK) was established by the Governmentof India in 1993. Working through a network of NGOs, RMK gives loansof up to Rs 5,000 to women engaged in income generating activities, atinterest rates from 8 percent to 12 percent.

The assumption thatwomen, being only

supplementary incomeproviders of a family, need

not be paid a full day’swage for a full day’s workhas resulted in their large-

scale exploitation

Increased mobility contributes immensely to raising confidence levels

No. 95 (July-August 1996) 29

induced to claim greater decision-making authority in family businesses,whether run in their names or not. Thiscan only come from greater confidenceinduced by greater knowledge andexperience of dealing with the externalworld and from moving with othersuccessful women entrepreneurs.

All this can be achieved in atraining environment, especially one inwhich the woman is distanced from thenormal restrictive family environmentand is taught to recognise her ownpsychological needs and express them.To encourage more passive womenentrepreneurs whose menfolk runbusinesses in their names, and toactively involve the women in theirbusinesses, we must aim at coveringall the women who claim to run‘women’s enterprises’ in trainingprogrammes. Repeated exposure towomen who are successfullymanaging enterprises might encouragesome women who are passive now toinvolve themselves to a greater extentin the entreprises to which they havelent their name.

The availability of finance andother facilities like industrial sheds andland for women entrepreneurs is oftenconstrained by restrictions that do notaccount for practical realities. Fundingis not often available for activities inwhich women are predominantlyinvolved. The field of marketingprovides an example. Women of allincome levels are engaged in marketingactivity from vegetable vending to thesale of more sophisticated items. Thereis no effective institutional channel tomake money available for this activity.

A look at the various schemesavailable reveals that under theIntegrated Rural DevelopmentProgramme (IRDP), finance is notdenied for setting up a shop, and thePrime Minister’s Rozgar Yojana(PMRY) extends assistance for tradingactivity including simple trade finance.

Blockprinter, Ahmedabad

IRDP is confined to rural areas andPMRY covers urban areas. Bothschemes are limited to persons withvery low income levels.

The greatest constraint is thatavailability of funds is very low sincethe schemes operate solely throughbanks which are extremely reluctant toextend trade-related finance to smallcustomers because of the risks andoperational costs. State financecorporations and financinginstitutions are not permitted bystatute to extend purely trade relatedfinance not linked to asset creation.

Women’s development corporations,however, are fully aware of thesignificant presence of women in thisarea but have only a catalytic role infinancing. They must necessarily workthrough normal channels if they haveto gain access to open-endedfinancing.

Some schemes have tried to getaround this problem by offeringworking capital assistance if it issupported by group formation throughNGOs, banks or government. This,however, is limited to very low incomegroups. That is, a woman or any small

Sue Darlow

30 MANUSHI

business has no access toinstitutionalised trade finance andmust operate only through veryexpensive informal channels. Yet it isperfectly possible to extend the usualinstitutional interest rates to this areaby taking suitable collateral (after all,the alternative is for loanees to payexorbitant rates to privatemoneylenders) or by progressivelybuilding up collateral from earningsover time and by initiallyworking in regional clusters tofacilitate operations. The effortcould yield growth in accountsand deposits and otherbusinesses too. Any move tomake banks and institutionsenter this area is likely tobenefit women more than men.

The teaching professionconstitutes a large componentof the service sector, and em-ploys large numbers of women.Yet funding is not extended byfinancial institutions or banksfor setting up, equipping orrunning teaching institutions.Educational institutions can bejustified on purely commercialgrounds since they have todaybecome crucial determinants incompanies deciding to locatethemselves in particular places.Software personnel are notori-ously unenthusiastic aboutworking in cities where highquality school level educa-tional facilities are not available.It thus makes both economic and so-cial sense to emphasise funding for cre-ating good schools.

Priority to WomenInfrastructure to set up industries

is provided in the form of industrialplots and sheds by state run agencies.Apart from allotting units to womenentrepreneurs on priority basis, it is

areas which are poorly connected.There is a case for allotment of spaceon a temporary basis in multistoreyedcomplexes to enable such persons totry out their projects. But as suchspace is in great demand, it must beavailable only for genuine, seriouscases. It would also require strictenforcement of a periodic rotation ofits beneficiaries.

As regards allotting sheds or landon priority basis or atconcessional rates, in the caseof women, the scope formisuse is much higher than inthe case of any otherdisadvantaged group. For thisreason, we must be cautiousabout making specialallotments especially in highlysought after areas. If such ascheme is inevitable,precautionary measuresshould be built in screeningcommittees to evaluatewhether the beneficiary isindeed going to be in fullcharge of the enterprise. (Menshould under nocircumstances be permitted toappear or represent womenbefore the committee). Trainingin running an enterprise inquality approved institutionsshould be insisted upon as aprecondition for such priorityallottees. (Let us hope thisdoes not encourage themushrooming of traininginstitutions for women

entrepreneurs as a profitable sidelineby unqualified and uncommittedpersons). The same conditions couldbe applied to judge eligibility for specialinvestment subsidies or margin moneyfacilities being extended for women.

Financing DifficultiesCredit is available for women

through a plethora of schemes but

desirable to provide amenitiesparticularly required by them inindustrial areas.

Easy mobility and closeness tohomes and child care facilities aresought by both women entrepreneursand workers. Regular internal busservices are essential in industrialareas. Common creches run with theinvolvement of NGOs and industrialarea associations must be compulsorily

provided as a part of commonamenities, since the legal requirementof each unit to provide such facilitiesis circumvented by keeping the numberof women employees below theprescribed limit.

In large cities where land priceshave shot up, fledgling womenentrepreneurs find it difficult tocommute long distances to outlying

Plastic factory owner, Bangalore

No. 95 (July-August 1996) 31

there are still bottlenecks and gaps.The multiplicity of schemes is notadequately listed nor is therenetworking among agencies. As aresult, clients approaching oneinstitution are not made aware of thebest option for their requirements. Aclosely integrated data bank into whichall concerned agencies are plugged isa real need. The Karnataka Women’sCorporation has plans to set up aresource centre, which apart fromacting as a data bank, will also providecounselling and prepare research andevaluation studies.

Group financing is being extendedthrough banks operating withNABARD refinance, under the IRDPand the training and production centreprogramme implemented mainlythrough Mahila Samajs of theKarnataka Women’s DevelopmentCorporation. They concentrate ongroup formation and extend workingcapital grants to groups to encouragethem to break the exorbitant debtburdens already in existence within thecommunity for the beneficiaries. At thesecond stage, the beneficiaries moveinto individual or group activity withbank loans extended on groupguarantees. Group formation hasproved remarkably successful inempowering women and introducingthem to income generating activity,animators and introducing them toincome generating activity throughbank loans. Such schemes needintensive monitoring and effort at themicro-level and are difficult to replicate.

A widely utilised scheme was theSmall Industries Development Bank ofIndia (SIDBI)’s Mahila Udyam Nidhiwhich covers projects up to Rs 10 lakhand provides 15 percent margin moneyand a service charge of 1 percent (thepromoters’ contribution is only 10percent). This has been supplanted bythe liberalised National Equity Fund

scheme which covers entrepreneurs,where the margin money componenthas been fixed at 25 percent. A lowerpromoter’s contribution is not desirableas it will reduce the entrepreneur’scommitment to the success of theenterprise. In any case, for loans up toRs 50,000, no promoter’s contributionsis being insisted upon.

For larger loans, no margin moneyassistance is generally available andwomen entrepreneurs have to follownorms applicable to others, that is toprovide between 17 and 25 percent ofthe cost of fixed assets out of ownresources. There is a case for settingup a fund for the purpose sinceirrespective of the name in which familyassets are held (surprisingly, quite abit of family property is held in the nameof women) women do not enjoy theauthority to pledge, dispose of or

otherwise encumber these assets, andfamilies are notoriously wary of usingthem to support enterprises for thewomen in the family. But selection ofbeneficiaries should be rigorouslydone with all the precautions listedabove to prevent the scheme frombeing hijacked by enterprisescontrolled by men.

The same situation applies in thecase of collateral. There is a justifiedwidespread demand for a waiver orreduction of collateral for womenentrepreneurs because of the abovedifficulties. This has two implications.A generalised system of exemption ofcollateral for women entrepreneurs willdefinitely result in a proliferation of“women’s” enterprises to takeadvantage of the facility. And bankerswill find the open-ended benefit riskyand tend to restrict financing underthis scheme. This would becounterproductive for our purpose.One practice, though not verysatisfactory, that has been introducedin the Karnataka State FinancialCorporation is again a screeningapproach through a committee ofrepresentatives from concernedagencies to ensure that the beneficiary

A woman entrepreneur specialising in auto lighting

Financial institutions tendto depend on male

members accompanyingwomen entrepreneurs for

finalising projects proposedby women

32 MANUSHI

is indeed capable of running theproject and is genuinely in need ofrelaxation of this condition. But largercoverage is possible only with thebacking of a special fund created forthe purpose, as done by Women’sWorld Banking for example.

In the area of guarantees, severalhumiliating habits have becomeingrained in financial institutions andbanks. They tend to depend on malemembers accompanying womenentrepreneurs for finalising projectsproposed by women and almostinvariably insist on guarantees frommales in the family.

These degrading proceduresshould be scrapped and guaranteessought for any entrepreneur, male orfemale, only where the entrepreneur onrecord is totally unfamiliar with theproject (in which case the guaranteeof the person with expertise may betaken) or has inadequate net worth.

The second condition will notnecessarily affect women alone sinceit is my experience that assets are oftenheld in the names of women. Repeatedgender sensitisation programmesshould be held to train financiers totreat women with dignity and respectas persons in their own right.

Confidence in MarketingA major area of difficulty for women

entrepreneurs is marketing. Severalinitiatives have been put in place toremedy this defect. At the initial stageswomen prefer to be locked intoprogrammes which ensure almost totalmarketing support, since they seldomhave the time or the confidence to seekout and develop markets. Even whenthey are otherwise in control of anenterprise, they often depend on malesof the family in this area. Marketingmeans mobility and confidence in

dealing with the external world, bothof which women have beendiscouraged from developing by socialconditioning. Women’s developmentcorporations try to hold frequentexhibitions and set up marketingoutlets to provide space for the displayof products made by women. SomeNGOs have marketing vans. However,such arrangements are not adequatelypublicised and quality control isinadequate with no arrangement foradaptation to market requirements orconsumer tastes.

The long term strategy should inany case be to inculcate marketingskills in women entrepreneurs toenable them to produce for the market.This means that a market survey toselect the product should be made partof all training and advice given toexpose enterprises to markets andmake them responsive to them.Professional marketing expertise isessential to identify marketingchannels for the products made bywomen entrepreneurs. Industrialestates could also provide marketingoutlets for the display and sale ofproducts made by women.

Unfamiliarity with the externalworld and lack of ease in movingaround in it greatly hamper womenwhen it comes to dealing with amultiplicity of agencies in setting upor running a business. It is here that,despite professional competence andtraining, women are forced to turn tomen for assistance.

An experiment that was tried out inthe Karnataka State FinancialCorporation has received positivefeedback. A Women Entrepreneur’sGuidance Cell set up to handle thevarious problems of womenentrepreneurs working directly undertop management has proved a focal

point for monitoring and assistingprojects run by women.

Similar cells in the DistrictIndustries Centres and Single WindowAgencies could be extremely useful inassisting women. But they must on noaccount degenerate into routinedepartments and should be staffedwith the most committed trainedpersonnel and given continuing andtotal support by the head of the office.

A final area of concern in the caseof women entrepreneurs is stagnationin their growth. This is due to variousreasons like the demands of householdduties, mobility problems and the needto expand space and staff. It is alsooften due to psychological causes likelack of self-confidence and fear ofsuccess (women who succeed oftenface hostility and resentment withintheir family circles). The necessarymanagerial and technical skills are alsolacking, which is a barrier to the growthof women’s businesses. Training andcounselling on a large scale of existingsuccessful women entrepreneurs whoseem to have plateaued is a necessity.Surprisingly, very little attention isbeing paid to this requirement by anyagency, governmental or voluntary.Counselling through the aid ofcommitted NGOs, psychologists,managerial experts and technicalpersonnel could result in thedevelopment of appropriate strategiesand enable growth.

Renuka Vishwanathan is an IASofficer specialising in finance. Shewrites on women’s issues andtranslates stories from Malayalam andTamil.123456789012345678901234567890121234567890123412345678901234567890123456789012123456789012341234567890123456789012345678901212345678901234123456789012345678901234567890121234567890123412345678901234567890123456789012123456789012341234567890123456789012345678901212345678901234123456789012345678901234567890121234567890123412345678901234567890123456789012123456789012341234567890123456789012345678901212345678901234123456789012345678901234567890121234567890123412345678901234567890123456789012123456789012341234567890123456789012345678901212345678901234