A comparative study of opportunities, growth and problems of women entrepreneurs.
Garga, Pawan ; Bagga, Rajesh
Introduction
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, new forms of organizations that lead to increased
productivity. In his studies relating to entrepreneurship Matlay (2006)
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) 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)
mentioned 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 male entrepreneurs. It is
important to differentiate entrepreneurs on the basis of gender if women
entrepreneurship is to be promoted (John, 2004).
Women entrepreneurship has come a long way in India. In urban
areas, more and more women are successfully running day care centres,
placement services, floriculture, beauty parlours and fashion boutiques.
Even in rural areas, self-help groups are empowering women to start
their own micro business. In her study Anju (1994) emphasized on value
orientation among women entrepreneurs. She argued that women
entrepreneurs had a preference for values like achievement,
independence, leadership effectiveness and conformity to social
obligations, which change the scale of success in favour of
entrepreneurs. Problems, however, are plenty for a female business
enthusiast who wishes to start her own unit. In general, whatever
problems men might face in setting up a small-scale unit are accentuated
in the case of women. 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. Rinkal et al.,
(2004) suggested that women of today are in several ways different from
the women of past years. During the present times, they seek social and
economic independence and are prepared to take risk for the same.
Mitchell (2004) 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) 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)
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.
The available literature on women entrepreneurship does not provide
sufficient insights and in-depth analysis of the various facets of women
in business and problems faced by them. This research paper is planned
to explore and analyse in detail the unknown facets of women
entrepreneurs in the states of Punjab, Haryana, Himachal Pradesh &
Union Territory of Chandigarh in India. The paper aims at finding out
the opportunities, growth and problems of women entrepreneurs as well as
their performances, obstructions and the future scenario for women in
business in this part of the country. The specific objectives of the
study can be summarized as:
(i) To study the opportunities available to women in business that
help in the development of women entrepreneurship.
(ii) To study/ explore areas where women entrepreneurship has made
substantial contribution and study potential areas where women
entrepreneurship can excel specially in the service sector including
emerging areas like BPO/IPO/KPO etc.
(iii) To study problematic areas and potential hurdles in the
development of women entrepreneurship.
Research Methodology
In this study, a convenience sample of 225 women entrepreneurs was
used to collect primary data. The population consisted of women
entrepreneurs from the four states of Punjab, Haryana, HP & Union
Territory of Chandigarh. Total area of the study comprised of 10
districts. It was decided to choose the top three districts in terms of
overall industrial development. Regarding Chandigarh, since there is
only one district, there was no need to apply any criteria for selection
of district. After identification of districts, addresses of women
entrepreneurs were collected from a number of sources viz. State
Financial Corporations (PFC, HFC and HPFC), various commercial banks and
District Industrial Centres. Finally, a total of 225 questionnaires were
collected with 75 each from Punjab & Haryana, 50 from HP & 25
from Chandigarh. Analysis of data was done with the help of Chi-Square
test for independence of attributes. One set of variables represent
states/UT to which the respondent belongs while the other set of
variables comprise of perceived and factual factors like weak areas,
opportunities provided, contribution of different financial agencies,
etc.
Data Analysis and Interpretation
Table 1 shows the perceptually weak areas for women entrepreneurs
in different states. The hypothesis to be tested is:
Ho: There is no significant difference in the perceptually weak
areas across different states It is clear from the table that the
calculated value of Chi Square is greater than the tabulated value;
hence, the null hypothesis is hereby rejected. There is a significant
difference in the perceptually weak areas regarding the ventures
established by them. While the women in Chandigarh and Himachal Pradesh
perceive controlling as a weak link in the management structure, the
women in Haryana suffer because of weak planning.
The data related to opportunities provided by service sector has
been summarized in Table 2. Except for Haryana, where manufacturing
sector has a major share in the overall industrial development, in all
other states, more than 90% respondents are quite optimistic about the
growing service sector and especially education. Infact, they want to be
a part of this and believe that women can be more successful in this
sector, as, it requires minimum investment and involves fewer hassles.
The contribution of different financial agencies has been shown in Table
3. The hypothesis framed is:
Ho: There is no significant difference in the contributions of
different financing agencies
Calculated chi square statistic is much higher than the tabulated
value; hence, null hypothesis may be rejected. The result clearly shows
that there is a significant difference in the contributions of different
financing agencies across different states. While in Punjab &
Chandigarh, it is a tie between public and private sector banks. In a
state like HP, it is the government loan, which is most popular among
women entrepreneurs. In Haryana, private banks have contributed the
maximum in financing ventures of women run business enterprises. The
observations are pretty contradictory to the general perception that
public banks are more liberal and contributory.
It is clear from the results that the government agencies have not
been able to approach the women entrepreneurs for providing them with
soft loans. In HP and Chandigarh, more than 50% women entrepreneurs have
been able to get loan facility from these agencies. However, in Punjab
and Haryana, the two states to which most of the respondents belong have
little access to such facilities. The data related to interest rates
charged has been summarized in Table 5 and the hypothesis framed is:
Ho: There is no significant difference in the interest rates being
charged by various financial agencies to women entrepreneurs across
different states
The chi square calculated value is much higher than the tabulated
value, hence, null hypothesis may be rejected. The result clearly shows
that there is a significant difference in the interest rates being
charged by different banks and financial agencies across different
states. While in Punjab and Haryana, banks and state agencies provide
most of the finance at rates ranging between 5-10%. In Chandigarh, rates
are comparatively higher as the range is between 10-15%. In HP, it is
the public sector banks and financial institutions which are providing
maximum finance to women entrepreneurs at subsidized rates.
The enterprise growth according to the profit has been shown in
Table 6 and the hypothesis framed is:
Ho: There is no significant difference in the growth rates according to profit across different states
The chi square calculated value is much lower than the tabulated
value; hence, null hypothesis may be accepted. The result clearly shows
that there is no significant difference in growth of women entrepreneurs
across different states. In almost all the states, majority of units
have a growth in profits ranging between 5-10%. Some have been really
successful in achieving a growth rate of 10-15%. While in Punjab &
Haryana, banks and state agencies provide most of the finance for a
period of 3-5 years. In Chandigarh, this period extends to 5-10 years.
The striking feature is that low period finance is not preferred in
Chandigarh while more than 25 % women entrepreneurs prefer it in rest of
the states.
The opinion regarding the suitability of different sectors has been
tabulated in Table 7 and the hypothesis framed is:
Ho: There is no significant difference in the opinions regarding
suitability of different sectors across different states
The chi square calculated value is much lower than the tabulated
value; hence, null hypothesis may be accepted. The result clearly shows
that there is no significant difference in the opinions of women
entrepreneurs across different states. While a radical shift in the
Indian economy occurred recently where service sector has left all
others behind, the women entrepreneurs also want to join this bandwagon.
That is clear from the table as in all the states, more than 60%
respondents have shown their preference for service sector. The striking
feature is that in HP almost 85% respondents have shown preference for
service sector.
The growth rate of women entrepreneurs in service sector has been
shown in Table 8 and the hypothesis framed is:
Ho: There is no significant difference in the opinions regarding
expected growth rate of women entrepreneurs in service sector across
different states
The chi square calculated value is lower than the tabulated value;
hence, null hypothesis may be accepted. The result clearly shows that
there is no significant difference in the opinions regarding growth rate
of women entrepreneurs in service sector across different states. Most
of them believe to have astronomical jump in their business, while
majority expects a growth rate of 25-50% on the whole. Next to it, a
good percentage of respondents expect a growth rate of more than 50% in
the coming years in service sector. However, the women in Chandigarh are
little conservative in estimating growth targets.
ITES has been the major sunrise industry for development of Indian
economy. Majority of women consider it as their next business venture
because they want to earn substantial earnings from this growing
industry. ITES not only earn profits but also automates the existing
industrial setup and is thus very important for growing economy. The
Table 9 shows the ITES as next explorable sector for women and a
comparison between the traditional sector and ITES has been shown in
Table 10. The service sector boom in Indian Economy has brought new
areas for industrial development. The women in business also want to
join this bandwagon. Shifting from traditional areas into new,
progressive and growth oriented service sector they will prefer to enter
in times to come. Hence they are ready to take a risk and face new
challenges. It is clear from the figures shown in Table 11 that women
entrepreneurs are equally enthusiastic about joining new sectors like
BPO. They have clearly expressed their willingness to shift into these
new areas so as to get maximum benefit from their entrepreneurial
skills. This is the view of majority of respondents across all states.
The modern Indian society is considered to be liberal and is encouraging
women entrepreneurs. However except for Punjab, respondents in all the
states, have considered society, parents and culture as major hindrances
in entry to new ventures. These are some of the factors which act as
hindrances but get neutralized in later stages.
Conclusion
Indian economy is growing rapidly due to growth in service sector.
This is one potential area, which is going to be targeted by women
entrepreneurs. Information Technology Enabled Services, BPO/KPO's
are the potential growth oriented areas, where women will strive to
excel. On the financial front all the public and private sector banks
have played a major role by sanctioning sufficient financial aid.
However in Himachal Pradesh the role of government in granting liberal
loans is creditable. Women entrepreneurs enjoy sufficient credit
availability for meeting their monetary needs. However the procedure to
get these loans sanctioned is difficult and cumbersome. In fact lack of
awareness about availability of such facilities is the cause behind
nonavailability. In spite of the fact that majority of respondents have
acknowledged profit making as the major objective of their enterprise,
women upliftment and empowerment are the by products. Financial
independence and independent decisionmaking are the hallmark of free and
liberal women in a society.
One distinguishing and noticeable feature of the growth of women
enterprises is their increasing inclination towards service sector.
Agriculture and manufacturing are taking a back seat. Possible reasons
may be requirements of high capital investment and hardships involved in
running an enterprise in these sectors. Along with that the sunrise
industries of Indian economy, i.e. Information Technology Enabled
Services, pharmacy, BPO/Education have much higher growth potential.
References
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"Towards Establishing Biographical and Business Background Profiles
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Pawan Garga (1) and Rajesh Bagga (2)
(1) Institute of Management Studies, Himachal Pradesh University,
Summer Hill, Shimla--171005, H.P., India
(2) Apeejay Institute of Management, Hoshiarpur Road, Rama Mandi,
Jalandhar--144007, Punjab, India
(1) E-mail: pkgarga@yahoo.co.in, (2) E-mail:
rajesh.bagga@rediffmail.com
Table 1: Perception Regarding Perceptually Weak Areas
STATE/UT Total
Punjab Haryana HP Chandigarh
Perceptually Planning 20 31 10 5 66
weak areas Organizing 18 22 7 7 54
Controlling 37 22 33 13 105
Total 75 75 50 25 225
Chi-Square Test
Calculated Value Degrees of Freedom Tabulated Value
Pearson
Chi-Square 18.330 6 12.592
Table 2: Perception Regarding the Opportunities Provided by Service
Sector
STATE/UT Total
Punjab Haryana HP Chandigarh
Opportunities Yes 71 48 48 23 190
provided by No 4 27 2 2 35
service sector
Total 75 75 50 25 225
Percentages STATE/UT
Punjab Haryana HP Chandigarh
Opportunities Yes 95 64 96 92
provided by No 5 36 4 8
service sector
Total 100 100 100 100
Table 3: Contribution of Different Financial Agencies
STATE/UT Total
Punjab Haryana HP Chandigarh
Contribution Public bank 27 25 9 8 69
of different Pvt. bank 27 32 12 8 82
financial Govt. loan 15 16 12 4 47
agencies Pvt. 6 2 14 5 27
Financial
Total 75 75 50 25 225
Chi-Square Test
Calculated Value Degrees of Freedom Tabulated Value
Pearson
Chi-Square 24.004 9 16.919
Table 4: Availing of Soft Loans from Govt. Under Various Schemes
STATE/UT Total
Punjab Haryana HP Chandigarh
Perception regarding Yes 21 23 26 14 84
availability of loans No 54 52 24 11 141
under schemes
Total 75 75 50 25 225
Percentages STATE/UT
Punjab Haryana HP Chandigarh
Perception regarding Yes 28 31 52 56
availability of loans No 72 69 48 44
under schemes
Total 100 100 100 100
Table 5: Interest Rate Charged by Financial Institutions and Banks
STATE/UT Total
Punjab Haryana HP Chandigarh
Interest rates 0-5% 11 15 3 29
charged by 5-10% 46 35 36 10 127
FI's/Banks 10-15% 15 25 8 13 61
15-20% 3 3 2 8
Total 75 75 50 25 225
Chi-Square Test
Calculated Value Degrees of Freedom Tabulated Value
Pearson
Chi-Square 28.515 9 16.919
Table 6: Growth of Enterprise According to Profit
STATE/UT Total
Punjab Haryana HP Chandigarh
Growth of 0-5% 16 16 6 4 42
enterprises 5-10% 38 31 21 13 103
according to 10-15% 15 21 17 7 60
profit 15% & above 6 7 6 1 20
Total 75 75 50 25 225
Chi-Square Test
Calculated Value Degrees of Freedom Tabulated Value
Pearson
Chi-Square 6.565 9 16.919
Table7: Opinion Regarding Suitability of Different Sectors across
Different States
STATE/UT Total
Punjab Haryana HP Chandigarh
Suitability Manufacturing 19 21 8 7 55
of sectors Service 56 50 42 16 164
Agriculture 4 2 6
Total 75 75 50 25 225
Chi-Square Test
Calculated Value Degrees of Freedom Tabulated Value
Pearson
Chi-Square 11.549 6 12.592
Table 8: Growth Rate of Women Entrepreneurs in Service Sector
STATE/UT Total
Punjab Haryana HP Chandigarh
Growth in 0-25 % 7 5 3 5 20
service sector 25-50 % 38 29 24 8 99
50-75 % 24 27 18 12 81
75-100 % 6 14 5 25
Total 75 75 50 25 225
Chi-Square Test
Calculated Value Degrees of Freedom Tabulated Value
Pearson
Chi-Square 15.291 9 16.919
Table 9: ITES as the Explorable Sector for Women
STATE/UT Total
Punjab Haryana H Chandigarh
ITES as explorable Yes 58 58 38 24 178
sector No 17 17 12 1 47
Total 75 75 50 25 225
Percentages STATE/UT
Punjab Haryana HP Chandigarh
ITES as explorable Yes 77 77 76 96
sector No 23 23 24 4
Total 100 100 100 100
Table 10: Suitability of Traditional Sector Vis a Vis BPO/LPO/KPO for
Women Entrepreneurship
STATE/UT Total
Punjab Haryana HP Chandigarh
Perception about/BPO/ Yes 13 36 8 14 71
LPO/KPO No 62 39 42 11 154
Total 75 75 50 25 225
Percentages STATE/UT
Punjab Haryana HP Chandigarh
Perception about/BPO/ Yes 17 48 16 56
LPO/KPO No 83 52 84 44
Total 100 100 100 100
Table11: Perception Regarding Shifting to Education and BPO/LPO/KPO
Industry
STATE/UT Total
Punjab Haryana HP Chandigarh
Perception regarding Yes 64 69 40 23 196
shifting to Education No 11 6 10 2 29
and BPO/LPO/KPO
Industry
Total 75 75 50 25 225
Percentages STATE/UT
Punjab Haryana HP Chandigarh
Perception regarding Yes 85 92 80 92
shifting to Education No 15 8 20 8
and BPO/LPO/KPO
Industry
Total 100 100 100 100
Table 12: Perception Regarding Society, Parents, Culture as Major
Hindrances
STATE/UT Total
Punjab Haryana HP Chandigarh
Hindrances Yes 37 57 32 15 141
with regard to No 38 18 18 10 84
society/parents/
culture
Total 75 75 50 25 225
Percentages STATE/UT
Punjab Haryana HP Chandigarh
Hindrances Yes 49 76 64 60
with regard to No 51 24 36 40
society/parents/
culture
Total 100 100 100 100
