problems faced by female entrepreneurs of sindhuniversalrg.org/fulltext/462 5.pdf · mehran...

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: [email protected]

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


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


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:[email protected]






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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 don’t 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 female’s 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:



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(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 female’s 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 male’s 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 children’s 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



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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).



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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



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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



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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.

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