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International Journal of Accounting and Financial Management (IJAFM) Universal Research Group ISSN: 2322-2107 Vol.2. September 2012 53 Problems Faced by Female Entrepreneurs of Sindh Zulfiqar Hussain Pathan PhD Research Scholar (MU-ISTD) and Senior IT Assistant (MUET) Mehran University of Engineering and Technology, Jamshoro E-mail: zulfiqar.pathan@admin.muet.edu.pk Dr. Qazi Muhammad Moinuddin Assistant Professor and Secretary Mehran University Institute of Science, Technology and Development (MU-ISTD), Mehran University of Engineering and Technology, Jamshoro, Sindh, Pakistan E-mail: qaziabro@gmail.com Prof. Dr. Roshan Shah Rashidi Dean FOSTH, Co-Director Mehran University Institute of Science, Technology and Development (MU-ISTD), Mehran University of Engineering and Technology, Jamshoro, Sindh, Pakistan E-mail: pirrashdi@yahoo.com ABSTRACT The study was conducted to have an overview of the existing conditions, problems / barriers / hindrances of female entrepreneurs based in Sindh. It was also conducted to come up with recommendations / suggestions to address existing problems to promote gender friendly business environment. The analysis was based on primary data collection through structured questionnaire. The total sample size (29) twenty nine female entrepreneurs of 04 districts of Sind i.e are (Karachi, Hyderabad, Sukkur & Matiari). The study clearly indicates that lack of Technology; Social Capital, Low Government Support and Financing are the main barriers which highly affect to the growth of female entrepreneurs of Sindh. The other major problems included are, low education level, lack of managerial experience, low marketing skills. This study conveys the message that if the female entrepreneurs of Sindh are provided appropriate training, technical knowledge, local administrative support from public institutions, free collateral loans, social security, protection and encouragement from their families, flexible business environment etc they will enter in to the entrepreneurial occupation in a large number and will prove their worth to contribute to the economy of the country. Both the government and non government organizations have a major responsibility to promote entrepreneurship development for female. Without their interventions the advancement of female and female entrepreneurship can not be achieved. Keywords: Female Entrepreneurs, Barriers/ Problems mailto:zulfiqar.pathan@admin.muet.edu.pkmailto:qaziabro@gmail.commailto:qaziabro@gmail.commailto:qaziabro@gmail.comInternational Journal of Accounting and Financial Management (IJAFM) Universal Research Group ISSN: 2322-2107 Vol.2. September 2012 54 Introduction Nowadays female / female empowerment have been increasing so rapidly all over the world and female are starting their own business to get greater control over their personal lives. In Pakistan, female dont enjoy the same opportunities like men. The segregation of gender starts early and become a way of life. However, the economic necessities are forcing more and more female to engage in economic activities employment or entrepreneurship [Aisha et al, 2009]. Economic census of Pakistan finds female entrepreneurs in Pakistan are at the lowest level among the developing countries, it is estimated that female entrepreneurs presently comprises about 3% of the total 3.2 Million entrepreneurs in the country and an estimated 33% of female are in rural areas. These female are engaged in Garments, Boutiques, Parlors, Fashion Designing work and craft such as embroidery; tailoring carpets, shawl making, pottery ceramics and food processing having incredible skills and potential. The basic purpose of this paper is to identify the main problems which are affecting the female entrepreneurial activities in Sindh. For this purpose the secondary data has collected from literature as well as from internet and primary data has collected with the help of designed questionnaire. Conceptual framework / Business Environment of Female Entrepreneurs in Pakistan:- Female entrepreneurs do not operate in isolation. They work under the same macro, regulatory and institutional framework as their male counterparts in a free market mechanism in Pakistan. It is necessary to dig deeper to understand the gender biases embedded in society which limit females mobility, interactions, active economic participation and access to business development services. The business environment for female in Pakistan reflects the complex interplay of many factors, which fall into two basic categories. The first is made up of social, cultural and traditional elements. This aspect of the environment has taken shape over many centuries. The gender bias of this type of system is rigid and deep-rooted as it draws legitimacy from the perpetuation of a traditional mind-set, established rituals and a firm belief system. The second group of factors derives from the first group, taking the form of constitutional structures, policy documents, regulatory arrangements and institutional mechanisms. This category is contemporary rather than traditional, so it is cosmetically impartial. The traditional systems pose difficulties for female in general and entrepreneurs in particular in two ways. First, they are inherently discriminatory and second, they inhibit the equity-based composition of modern institutions and their fair working, as modern institutions are derived from traditional ones. Research Objectives: 1. To identify the nature of the constraints faced by female entrepreneurs. 2. To categorize different constraints, according to financial, social and human capital needs. 3. To examine the most critical constraint related with the female entrepreneurs Literature Review The factors which are discouraging the female are societal norms, low level of funding, lack of information, low skill acquisition, low level of education, lack of supporting networks, lack of managerial experience and low level of encouragement from spouses and families. These factors include: International Journal of Accounting and Financial Management (IJAFM) Universal Research Group ISSN: 2322-2107 Vol.2. September 2012 55 (a) Socio-cultural factor: A major point to note here is the fact that in Pakistan, many female during the socialization process were not given enough opportunity, freedom, and wherewithal to develop adequate and appropriate skills that can enable them to have entrepreneurial competency. This is essentially inherent in the much created gender-related limitations which has the tendency to relegate female/females to the background. (b) Low level of Funding: Poor finances and lack of adequate funds for starting enterprises are a serious problem to female entrepreneurs. Female generally are poor for lack of funds and as such do not have enough financial backing to start a good business or sustain an existing one. In this context, Carter (2000) identified four areas of financing that previous researchers have noted can pose particular problems for female that are disadvantaged in their ability to raise start-up finance: guarantees required for external finance may be beyond the scope of most females personal assets and credit track record, once a business is established, finance may be more difficult for female entrepreneurs to raise than for their male counterparts, because of the greater difficulties that female face in penetrating informal financial networks and the relationship between female entrepreneurs and bankers may suffer from sexual stereotyping and discrimination. As such, the majority of female business owners rely to a significant extent on self-generated finance during the start-up period of their business. (c) Lack/Poor Access to Market Information: Usually, there are not many educated female in Pakistan. The literacy level is still at the low rate in the country. As such, much of the market information that could have been beneficial and in essence enhance better productivity elude female. Most are ignorant of market trends concerning costing, pricing, etc. and consequently could not benefit maximally from readings of price movements and fluctuations. (d) Lack/Poor Technological Know-how: Low educational status of most female does not allow very many of them to have the opportunity of being technologically sound. Many technical skills that could up till now have assisted to ensure successful enterprise and appropriate production techniques and product diversification are not possessed by many female. For this reason, it is almost impossible for them to be relevant in the current technological changes and the globalization of production. (e) Poor Networking/Linkage: Female are not properly connected. Many as noted earlier are poor, uneducated, and unconnected. As such, good networking or linkage for support services even when available may be beyond the reach of female. (f) Mainstreaming into Arts-related courses/paucity of Female Entrepreneurs: During schooling, many girls were not encouraged into the sciences for reasons ranging from the perception of sciences as a males domain, teachers attitude, societal belief, and students lack of interest. As such, not many of Female Scientists could be produced. This consequently would in turn decrease the number of Female engaging in establishing business/enterprises as entrepreneurs. (g) Fear of losing out: In Pakistan, female are largely responsible for household keeps such as food, water, clothing, crafting and often times their childrens education. As such they are usually afraid to invest their hard earned and much needed income into businesses or enterprises for fear of failure. (h) Unfavorable conditions/policies: It is obvious that many of the conditions for obtaining loans do not necessarily favor female. The conditions are usually stricter for female. This indicates gender discrimination in possession of capital for establishing enterprises/businesses. Even when policies are formulated to disabuse these gender International Journal of Accounting and Financial Management (IJAFM) Universal Research Group ISSN: 2322-2107 Vol.2. September 2012 56 differences, the effect in practice is yet to be noticed. Female entrepreneurs are faced with strong barriers to enterprise development in the prevailing laws and regulations. It further noted that obtaining licenses, registering the business in their own name, and applying for loans were nightmares they had to live with. (i) lack of managerial Experience: In Pakistan female do not have quite enough managerial experience, due to that female takes wrong decisions and their enterprise has to suffer a lot of losses. This leads the enterprise unit towards crises. (j) Lack/Low level of encouragement from spouses: Men generally enjoy being the breadwinner of the household. Most of the time they would not want their wives to be economically buoyant and independent. As such, they are not likely to encourage their wives to start businesses/enterprises that may make them economically buoyant. Data Collection The sample data is collected randomly from different parts of Karachi, Hyderabad and District Matiari. Random sampling procedure was followed to select the sample. The total number of sample becomes twenty seven (27) for this study. This study is based on both primary and secondary data. The primary data has collected at the filed level through questionnaire survey, the information collected through questioner interview. The respondents were interviewed by using questionnaire at their homes, enterprises etc. This method is the most appropriate method for this proposed study. The secondary data was collected from literature review, internet and published articles. The summary of response rate of the questionnaire distribution is described in Table 1. Table 1. Description Number of questionnaire Total Questionnaire Bounced email Remaining Questionnaire Refuse to reply Net Questionnaire distribution First round return Second round return Through interviewed With the help of friend Number of discarded Number of usable Questionnaire Net rate of usable response 98 47 51 01 50 07 03 16 03 02 27 52.54% Data Analysis In order to analyze the collected data regression analysis has been carried out which is used to express the causal relationship between the credit constraint of female entrepreneurs of sindh regarding as dependent variable and factors that hinder the possibility of their activities. This analysis helps in developing a model which includes a dependent variable (female entrepreneurial activities) and several independent variables (Financing, Marketing, Networking, Social capital, Lack of Technology, Low level of education, Experience, Managerial constraints etc). International Journal of Accounting and Financial Management (IJAFM) Universal Research Group ISSN: 2322-2107 Vol.2. September 2012 57 Description of Model. The problems faced by female entrepreneurs may be caused by different internal and external strategic factors such as Financing, Marketing, Networking, Social capital, Lack of Technology, Low level of education, Experience, Managerial constraints etc. All these factors are included in the survey questionnaire to predict the most affecting the activities of female entrepreneurs. Table 2 Logistic regression diagnostic statistics Cases R2 GM R2 change GM change Full model 0.584 215.088 - - One case deleted 0.679 237.298 0.095 22.21 According to Tabachnick and Fidell (2006), with a large sample, it is not common to find a number of outlying residuals. If there are only few outliers existing, it may not be necessary to take any action. In this research, there is only one case that is found to have outstanding standard residual value, which is removed from data file before further analysis is conducted (Menard, 2009). Table 3 Full model of stepwise logistic regression Initial -2log likelihood (-2LL): 355.397 Variable B S.E Wald df Sig Exp (B) Experience Marketing Social capital Lack of Technology Low level of education Financing Managerial constraints Low Govt Support Constant .094 -.034 .257 .721 .126 -.191 .253 -.134 -6.030 .104 .059 .093 .167 .063 .074 .190 .149 3.162 .804 .455 7.585 18.553 3.965 6.631 1.775 6.654 3.636 1 1 1 1 1 1 1 1 1 .370 .570 .006 .000 .046 .010 .183 .010 0.027 1.098 .967 1.293 2.057 1.134 1.288 .826 .875 .021 As seen in the first step of the estimation process, independent variable of Lack of Technology is selected for the first entry. This corresponded to the highest value of Wald statistics, 18.553 when compared with other independent variables in base model. Although, the entry of independent variable Lack of Technology into the logistic regression model results in a reasonable model fit, examining the remaining independent variables in the base model indicates that several independent variable also have the high value of Wald statistics and met the threshold of .05 significance for inclusion in the model and therefore further model expansion should be continued. The -2LL value reduced dramatically from 355.397 in the null model to 200.098 in the single model with the inclusion of independent variable Experience. Following tables illustrates the change of key statistical factors in the model when the first independent variable of Lack of Technology is entered into the model, then second variable social capital, third variable government support and forth variable finance is entered in to the model International Journal of Accounting and Financial Management (IJAFM) Universal Research Group ISSN: 2322-2107 Vol.2. September 2012 58 International Journal of Accounting and Financial Management (IJAFM) Universal Research Group ISSN: 2322-2107 Vol.2. September 2012 59 Figure 1 Regression Model Conclusion The results of this study provide that there are significant relationships between the barriers faced by female entrepreneurs and such predictors as Lack of Technology, Social Capital, Government Support and Finance at 1% significant level. Therefore, it is concluded that out of the 8 independent variables, 4 variables namely Lack of Technology, Social Capital, Government Support and Finance are perceived by the female entrepreneurs of Sindh to have potential impact on the success of entrepreneurship. It is also interesting to compare the perceptions of female entrepreneurs in accessing their performance by looking at the results of the logistic regression model with these four independent variables. When the first two variables (lack of technology and social capital) entered into the model; it gives 86% probability of doing their business easier while entering all four variables in the model; it International Journal of Accounting and Financial Management (IJAFM) Universal Research Group ISSN: 2322-2107 Vol.2. September 2012 60 gives 93.5% probability of doing their business successful. Therefore, it can also be concluded that the factors lack of technology and social capital have important impact on the probability of successful female entrepreneurs. The factors government support and experience, nonetheless, have also contributed to the success of female entrepreneurs. These above findings are incorporated into a model, showing the successful as well as influential factors towards the success of female entrepreneurs operating in Sindh, depicted in figure 1. Recommendations All new Female entrepreneurs should be given a provision of tax exemption for at least five years. There is the urgent need to improve on the existing policies and legal framework in a manner that would practically reach a satisfactory level so as to encourage the female entrepreneurs. Female should be encouraged to study Science and Technology in schools and colleges / Universities. With this, they could gain access to know- how, technologies, appropriate and adequate skills, training to upgrade their technical capabilities, and their entrepreneurial skills. Create easy access for Female entrepreneurs to the local administrative support and public institutions. A comprehensive credit policy should be initiated under the supervision of the State Bank in order to access of Female entrepreneurs to Finance. This policy must keep a provision of collateral free loan, credit without interest or low rate of interest, loan for long time duration etc for Female entrepreneurs. Limitations of the Study:- To get response from female entrepreneurs for all questions was really a great challenge, as a Female entrepreneurs were found quite busy in their activities, so in the result some important information's were missed. The female entrepreneurs which are involved in large enterprises were not included in this study, therefore this report does not tell about their situations. Gender discriminations was also a great constraints to me, because being a male it is very difficult to ask their personnel life. REFERENCES 1. O.O. Kalesanwo , J.B. Bilesanmi-Awoderu, (2009), "Female Entrepreneurship In Science And Technology: Impetus For Female Participation In National Development In Nigeria" Volume,7 Number 3, pp-12-36. 2. Aisha Akram et al, (2009) Thesis on Problems faced by entrepreneur/self employed rural Female 3. Joseph F Hair, Barbara G, Tabachnik, (2009) Mixed ANOVA and multiple regression, Sage Publications. 4. Frear, D. (2007), Rural Female Entrepreneurs: A Demographic Survey in Rural Pennsylvania. The Jay S. Sidhu School of Business & Leadership, Wilkes University, USA. 5. Pooja Nayyar, Avinash Sharma, Jatinder Kishtwaria, Aruna Rana and Neena Vyas. (2009) "Causes and Constraints Faced by Female Entrepreneurs in Entrepreneurial Process" J. Soc. Sci., 14(2): 99-102. International Journal of Accounting and Financial Management (IJAFM) Universal Research Group ISSN: 2322-2107 Vol.2. September 2012 61 6. Shane, Scott (2003) "A General Theory of Entrepreneurship: the Individual-Opportunity Nexus", Edward Elgar. 7. Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 6. 8. Nabeel A. Goheer (2003)" Female entrepreneurs in Pakistan How to improve their bargaining power". 9. Minniti, M. and Bygrave, W.D. (2003), National Entrepreneurship Assessment, Executive Report. United States of America. 10. Petrin J (2002). Entrepreneurship as a economic force in rural development. Translate by Hamidreza Zarnegar. Journal of Jihad. . pp. 68-75. 11. Ahmadpour Dariani M (2001). Entrepreneurship: definitions, theories and patterns. Tehran: Pardis publication. 12. Burch John G (1986). Entrepreneurship, United States of America: John Wiley& sons. 13. Bosma, N., Praag, M.V. and Wit, G.D. (2000), Determinants of Successful Entrepreneurship. Research Report (Netherlands Ministry of Economic Affairs.www.eim.nl). 14. Verheul, I., Wennekers, S., Audretsch, D. and Thurik, R. (2000), An Eclectic Theory of Entrepreneurship: Policies, Institutions and Culture. 15. Tuladhar, J. (1996), Factors affecting Female entrepreneurship in small and cottage industries in Nepal: opportunities and constraints. Advanced Management Journal. Vol. 67. 16. Guthier, R. (1992), Entrepreneurship in Nepal: Some Observations on Entrepreneurial Characteristics and Other Findings. Paper presented at the International Conference on Internationalizing Entrepreneurship Education and Training. Dortmund, 23 - 26 June. 1992. Small Business Promotion Project. Kathmandu, Nepal. 17. Ranabhat, B. R. (1995), Female Entrepreneurs in Nepal: their profile, Problems and Prospects. Small Business Promotion Project. Kathmandu.

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