Women Entrepreneurship Development: The Catalytic Role of NGOs

Sujata Mukherjee*

The rapidly changing economy has forced women to venture out as entrepreneurs. Although there are no concrete evidences of discrimination against women micro entrepreneurs, failure to provide collateral or guarantees reduces the likelihood of obtaining credit. Further, lack of marketing skills and technological know-how also act as impediments to the growth of their businesses. The present paper discusses the factors impeding the growth of women micro entrepreneurs and the catalytic role played by the Non-Governmental Organizations (NGOs) in creating appropriate entrepreneurial environment. The paper also discusses the supporting role in the process of entrepreneurship development among women.

Introduction
The rapidly changing socioeconomic scenario has led to the emergence of women entrepreneurs. The new generation of women-owned enterprises is actively seeking capital for their businesses, using modern technology to find and create a niche in both the domestic and export markets. While women-owned businesses have the potential and capability of contributing much more, it is essential to formulate strategies to invigorate, support and sustain their efforts in the right direction. Over the last decade, the role of Non-Governmental Organizations (NGOs) in development has been widely recognized. The NGOs play a catalytic role in mobilizing the local human and physical resources and creating appropriate entrepreneurial environment and generating new opportunities. This contribution to the microenterprise sector has led many state and central governments to seek the support of NGOs, to hasten the process of economic development. The three major phases in the entrepreneurial processcreating, nurturing and nourishingare the same for women and men. But, studies suggest that women business owners face hurdles of different magnitude and dimension, owing to social and cultural reasons, which men business owners do not face. This paper is an attempt to examine the factors impeding the growth and development of women microentrepreneurs and the role played by NGOs to support them to face and tackle the problems. The study is based on primary data collected from two districts of Maharashtra. It then proceeds to present the results. The results are substantiated with focus group discussions of entrepreneurs.
* Assistant Professor, Social Enterprise Cell, Shri Vile Parle Kelavani Mandal (SVKM)s, Narsee Monjee Institute of Management Studies (NMIMS) University, Mumbai 400056, India. E-mail: sujata.mukherjee@nmims.edu 21

Women EntrepreneurshipReserved. 2009 IUP. All Rights Development: The Catalytic Role of NGOs

Research Methodology
The methodology adopted in the present research is primarily empirical, focusing on analyzing the barriers/constraints faced by 125 women in the service, retail and manufacturing sectors, and the efforts of the NGOs to overcome these constraints. Structured and semi-structured (open-ended) interviews were conducted using an interview schedule developed for the study. The study listed 40 items as constraints identified by the entrepreneurs. These items were subjected to factor analysis by the principle component method, and normalized varimax rotations were computed. Factor analysis helped to arrive at 13 factors. The items under each factor were then identified, and some of the items were found to be overlapping. These items were further clubbed under each constraint. The interviews also helped to look at the supportive/catalytic role of the NGOs from the interviewees perspective. The qualitative method like focus group discussions were conducted and transcribed for analysis. Transcribed interviews were coded into categories of information. The outcome categories are presented with quotes from the entrepreneurs as well as other information that describes the NGOs role in sustaining entrepreneurship from the entrepreneurs perspective. In the present study, the data was collected from two NGOs1 providing support services to women microentrepreneurs. The districts of Mumbai and Pune in the State of Maharashtra were selected as the locale for the present study by using purposive sampling.2

Literature Review
The first part of the literature review provides a glimpse of the socioeconomic factors that hinder the growth of women entrepreneurs. The second part reviews the studies on the role of NGOs in entrepreneurship development. Due to the changing economic scenario, women from the low income group are venturing into microenterprise sector. Iyers (1991) qualitative study on women entrepreneurs from AWAKE3 highlighted that traditional upbringing hampers women enterpreneurs and creditworthiness of women was essentially linked to societys perception of womens ability as an entrepreneur. Rao (1991) attributes the inadequacy of entrepreneurship amongst rural and urban poor women to the absence of professional skills, congenial and appropriate entrepreneurial climate and an industrial base. Educational qualification or formal training inhibits women entrepreneurship (Hisrich and Brush, 1983). It also hampers their access to programs such as DWCRA,4 IRDP5 and TRYSEM6 (Rao, 1991). Rathore and Chhabra (1991)
1 2

3 4 5 6

One NGO from Mumbai and one NGO from Pune. Most of the industrial activity of the State is concentrated in three districts: Greater Mumbai, Pune and Thane. The two sampled districts of Mumbai and Pune provide nearly 70% of industrial and allied employment. The districts were selected, as it attracts lot of immigrants from the low-income category from other parts of the country in search of gainful employment. To add, the districts are also supported by the State Government through various state level institutes and some of the major national NGOs work in the two districts to promote entrepreneurship especially among the low-income section of society. AWAKE: Association of Women Entrepreneurs in Karnataka is an NGO established in December 1983. DWCRA: Development of Women and Children in Rural Areas. IRDP: Integrated Rural Development Programme. TRYSEM: Training of Rural Youth for Self-employment. The IUP Journal of Entrepreneurship Development, V ol. VI, N o. 2, 2009

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concluded that women entrepreneurs in both rural and urban areas needed training, finance and cooperation and encouragement from family, society and governmental organizations to enable them to enter the mainstream economy. Ramachandran (1993) concluded that women development agencies including NGOs have to be sensitive to the training needs of the target group and need to change the orientation of the people who are administering entrepreneurship development programs and policies. Jyothi and Prasad (1993) reveal that a majority of the entrepreneurs (mis)perceived training as a prerequisite for getting finance. Women entrepreneurs confront numerous problems like meager financial support, marketing, purchase of raw materials, competition from larger units, slackness in demand as major problems in promoting and running their enterprises (Sarngadharan and Resia, 1995). Bhatts (1995) case study on women-owned micro and small enterprises from SEWA7 reports that women change when they organize on the basis of work to join a union or form a cooperative. Begum and Srinivasan (2000) suggested the need for increasing awareness about the existing training programs which can motivate women to become self-employed and more knowledge input programs should be planned in the extension work of the community. Awasthis (n.d) study reveals that women-operated microbusinesses do not grow because of inadequate investment capital coupled with low level of skills which compel them to adopt low technology based production process; and the inadequacy of working capital, forces them to buy raw material in smaller quantities, making it costlier. All this affects their cost of production adversely and limits their ability to experiment or introduce new products and designs. Studies have also shown that women owned enterprises often lack prior business experience, particularly in managerial positions and do not network as effectively as men and thus, lose valuable opportunities for informal contacts with suppliers, customers, and providers of capital, thereby hindering their growth as entrepreneurs (Hisrich and Brush, 1984; Aldrich, 1989; Hisrich, 1989; Fabowale et al., 1995; and Greene et al., 1999). It has also been noted that most women-owned businesses are in the service and retail sectors, which are highly competitive and offer limited potential for growth and profit (Hisrich, 1989; Kalleberg and Leicht, 1991; and Loscocco et al., 1991). Goheer (2002) reveals that the primary source of funds for women entrepreneurs is their personal savings and low income women seldom have any personal savings and thus, only a very small percentage of women have access to the formal sources of credit. A United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) study revealed that all formal sources of credit seek tangible collateral for loans, and as women in South-East Asia hold no tangible assets or property, they are automatically sidelined. The scenario is bleaker for women from the low-income group. Belonging to this group means low or no personal savings. So the only source of finance for this category of women entrepreneurs is the NGO sector. Borrowing from NGOs help women to rescue their families from starvation and a lifetime of indebtedness to the moneylenders, besides ensuring some financial security. NGOs like SEWA, Working Womens Forum (WWF), the Mysore Resettlement and Development Agency (MYRADA) in India and many other NGOs have helped women entrepreneurs in the microenterprise sector gain access to credit and other
7

SEWA: Self-Employed Womens Association. 23

Women Entrepreneurship Development: The Catalytic Role of NGOs

support services. Studies by Getubig and Khalid (1991) and Elavia (1993) reveal the catalytic role played by NGOs in reaching women entrepreneurs in the microenterprise sector making credit and other support services available to them. NGOs are looked upon as empowering agents involved in social and economic development by providing women opportunities to set up their microenterprises by providing loans and other business development services for entrepreneurship development. (Akram, 1999; and Jalbert, 2000).

Findings and Analysis

Factors Impeding Growth and Role of NGOs
The barriers for women to become successful entrepreneurs are formidable especially for those involved in microenterprises. As Taylor (1980, p. 16) summed up the situation, Women are no different than men in their entrepreneurial drive and their desire for economic independence and personal self-fulfillment that business ownership can bring. However, there is a catch. It tends to be more difficult for women than for men to live out this drive. McNamara (1979) and Hisrich and OBrien (1981 and 1982) among others, suggest that venturing into entrepreneurship is a greater problem for women because of specific sociocultural, knowledge and financial barriers confronted by them. By and large, women entrepreneurs from the low-income group face the same problems as those commonly faced by all entrepreneurs, such as lack of capital, and insufficient entrepreneurial, managerial and technical training and experience. However, these problems are exacerbated by additional factors like underestimation of their economic roles, gender-role stereotyping, lack of confidence in their entrepreneurial and managerial capabilities, limited access to vocational training, particularly in the nontraditional sector, unfavorable attitudes and perceptions of bank personnel, limited access to information network and credit. For the present study, the factors impeding women entrepreneurs were analyzed using factorial analysis. The analysis grouped the factors that inhibit growth of women entrepreneurs in the microenterprise sector as: (a) Financial accessibility; (b) Technical assistance; (c) Marketing of the products; (d) Access to training; (e) Socio-psychological factors; and (f) Follow-up and guidance.

Financial Accessibility
Finance is the sine qua non for any enterprise. Yet, this was reported to be one of the main constraints coming in the way of entrepreneurs. The data on women accessibility to credit in South Asia shows that less than 10% of the women have access to commercial credits (Mahbub ul Haq Human Development Centre, 2000). Studies by Pellegrino and Reese (1982); Hisrich and Brush (1984); Neider (1987); and Carter and Cannon (1992), have found that women in small and microbusinesses found access to capital as one of the greatest areas of difficulty. Women have lesser opportunities than men to gain access to credit for various reasons including lack of collateral, banks unwilling to accept household assets as collateral and negative attitude of bank and financial institution officials to accept women, especially low-income group women, as entrepreneurs. The access to credit in the study was restricted to the entrepreneurs due to the following factors:
24 The IUP Journal of Entrepreneurship Development, V ol. VI, N o. 2, 2009

Approachability and Accessibility of Banks: Women business owners have more difficult time obtaining capital from external sources, in particular, working capital in the form of bank loans. Credit in the study was available to women entrepreneurs from banks under the PMRY8 scheme. Being microenterprise entrepreneurs, they mostly require a small amount of working capital ranging between Rs. 1,000 and 20,000 to start a service or retail business. As the loan process in commercial banks is lengthy and tedious, the bank officials do not show interest in processing such small loan. The entrepreneurs shared that they were apprehensive to approach banks as the loan amount was small and the documents required were very complicated added to which was the unsupportive attitude of banks for sanctioning the loan. The entrepreneurs shared that the bank staff did not communicate properly with them regarding the loan procedures and so they found it very difficult to submit the loan application. Further, their low level of education and knowledge, compounded the process. They added that majority of the bank staff would try to demotivate them and extended no support. The entrepreneurs shared that the bank procedures were very lengthy and required the submission of a lot of documents. A common refrain was, It takes a long time in getting the loan amount from the bank and there is a lot of harassment by the bank staff. One more entrepreneur disclosed, It was a very long procedure as it took three months to get the papers processed from the District Industries Centre to reach the bank. In the process, I lost the motivation to start the business. The accessibility to banks were at times a problem for the entrepreneurs as the banks were located at distant places making it difficult for them to travel due to their multiple roles and long working hours. Further, traveling and other miscellaneous costs9 of accessing credit being high also restricted their ability to access credit and the cash available with the entrepreneurs was not enough to help them meet the cost. One entrepreneur added I had to travel quite a distance from home 2-3 times a week to reach the bank. This was difficult as I had to get up early, complete my domestic chores and reach the bank on time, failing which, I would have to wait long. The entrepreneurs shared that as they had no savings and no assets which could be used as collateral against the loan, the banks were not very eager to sanction loans to them. A common concern shared was by most of the enterpreneurs was: I had to buy the raw materials to show the bank before the loan was disbursed, and for this, I had to borrow money from the moneylender. Choice of Business and Availability of Institutional Credit: Majority of the entrepreneurs (Figure 1) ventured out into the service sector.10 Venturing into the service sector is an indication of entrepreneurs taking business activities involving low capital investments. And most of the banks are reluctant to sanction loans for the service sector as the sector is high risk, low profit businesses. Added to this, their low education level (48% educated till class VIII), undermined their entrepreneurial ability. Low level of education resulted in entrepreneurs undertaking activities related to their existing skills (cooking, stitching, grinding and the like). The lack of professional skill also hindered their capability of approaching banks for financial assistance.
8 9 10

PMRY: Prime Ministers Rozgar Yojana: A Scheme for Urban Micro Entrepreneurs. Cost of xeroxing documents, snacks, etc. Service sector businesses: Tiffin service, PCO, Micro business centres (xerox, computer printing), Specialized stationery services (court stamp paper), Tailoring and Beauty parlor. 25

Women Entrepreneurship Development: The Catalytic Role of NGOs

Access to credit from banks is further hindered by lack of a business plan. Manufacturing Service The constraint is further compounded by 11.2% 50.4% factors like poor assets holdings, existence of unequal inheritance rights and poor access to community and social resources. A UNESCAP (n.d) study reports that gender-based discriminations, conventional thinking, sociocultural values, and no collateral, aggravate the problems of credit accessibility for women entrepreneurs. Coleman (2002) reveals that women business owners have more difficult time Trading obtaining capital from external sources 38.4% and in particular, working capital in the form of bank loans. The study by Fabowale et al. (1995) and Coleman and Carsky (1996b), also report that women small business owners expressed a relatively high level of dissatisfaction while dealing with banks.
Figure 1: Choice of Entrepreneurial Activity

NGO Intervention in Credit Availability: The NGOs played a catalytic role in supporting entrepreneurs to access credit. The study revealed that about 93% of the entrepreneurs received financial assistance from NGOs to start or expand their business. The loan/credit support was not only available as a start up capital, but was also available in phases which enabled them to sustain their businesses. Further, the process of making this credit line available to the entrepreneurs was user-friendly and was available with minimum documents to be submitted by the entrepreneurs (Figure 2).
Figure 2: Process of Sanction of Loan
I. Filling of VI. Follow-up and Handholding Application Form II. Submission of Documents Electricity Bill or Ration Card

Process of Sanctioning

III. Preliminary Feasibility Study V. Interview with the Entrepreneur(s) IV. Submission of Feasibility Report by Field Staff

The entrepreneurs shared that after the loan application is processed, the NGO carries out a preliminary feasibility study by visiting the entrepreneurs home not only to verify the documents submitted, but also to discuss about the loan and familiarize members of the family
26 The IUP Journal of Entrepreneurship Development, V ol. VI, N o. 2, 2009

with entrepreneurship so that they understand and support the entrepreneurial endeavor. Further, meeting with family members is a long-term strategy of the NGOs to promote entrepreneurial culture in the families, thereby, enabling them to be in harmony with each other, and with other groups in that society, and to pass the same to the next generation (NGO Internal documents). On submission of the feasibility report, the entrepreneurs are interviewed by the management to assess their aptitude towards loan repayment, depending on which the loan is sanctioned.11 A regular follow-up system and guidance process is followed by the NGOs to sustain motivation among entrepreneurs and also assure them to take care of business and family problems. This helps in the repayment of loan on time. As reported by the NGO staff, 99% of the entrepreneurs seldom default in repaying and if anyone defaults the group takes care of the defaulter and forces payment on time.12 Both the NGOs insisted on compulsory savings, whether directly or indirectly. The process of inculcating the habit of savings among entrepreneurs was meant to empower them financially as well as socially. The data also shows that financial independence among entrepreneurs brought about a change in the decision making and spending pattern in the families (Table 1).
Table 1: Type of Decision-Maker and Decision on Spending
Decision on Spending Decision Maker Spouse Self Joint Family/Friend Before 71 21 25 08 (56.8%) (21.6%) (20.0%) (06.4%) 13 55 48 09 After (10.4%) (40.0%) (38.4%) (07.2%) Change Increase/Decrease 46.4% + 23.2% + 18.0% Negligible Change

The data in Table 1 reveals that most of the decisions on spending for the household were made by the spouses (57%) before the entrepreneurs started their businesses, which decreased to 10% after the entrepreneurs started their businesses. We see a similar trend with regard to the other categories of decision makers. The data shows an increase (+23%) in independent
11

12

The first NGO collected postdated cheques at the time of disbursal of loan. The amount for each installment depended on the loan amount, and varied from Rs. 1,100 per month to Rs. 2,500 per month. The organization deposited one cheque each month, which was deducted from the entrepreneurs bank account. In cases where the cheque bounced, the respondent was contacted for needful action. The NGO had a system in which the entrepreneurs could inform the organization about their possible financial problems, in which case, the submission/encashment of the cheque was delayed. In the case of the second NGO, loan is sanctioned for an individual entrepreneur but the group is liable to ensure repayment on time. Any defaulter in the group amounts to the group losing opportunity for further loans unless the problem is rectified. Loan repayment is done on a monthly basis. The monthly installment amount was equated depending upon the loan amount and spread over a period of 20 months, and if there was a delay in repaying the installment within the stipulated time-period, the entrepreneurs had to pay the overdue interest amount. The strategy of the Linear Model of Group Development followed by one of the NGOs ensured that loans were repaid on time. This model stresses the process of development of solidarity groups in an orderly progressive movement, passing through the predictable stages of forming, storming, norming and performing (Garber, 1994). It is a process that involves conflict, empowerment and risk-taking. The loan sanctioned to a particular member in the group was on the basis of the group taking guarantee of repaying the installments on time. 27

Women Entrepreneurship Development: The Catalytic Role of NGOs

decision making by entrepreneurs with regard to their business activity. The entrepreneurs reported that starting and managing their business had also made a deep impact in changing their own mental attitude. This enabled the entrepreneurs to control conditions: I have gained confidence to deal with my activity on my own and look at benefits from every experience. The change in self-perception empowered entrepreneurs to change their lifestyle by taking better care of the household expenses without borrowing, providing better educational opportunities to their children and to a certain extent securing their future. The findings thus indicate that NGO intervention in making credit accessible to entrepreneurs helped to develop a positive self-esteem and empowered them to take independent decisions thereby, reducing dependence on their spouse/family members. Technical Constraint: Technical resource constraints were faced by entrepreneurs (11%) in the manufacturing sector.13 Limited or low technical knowledge about various improved techniques and designs were the major constraints in running the unit. Lack of technical training in upgrading their skills, hindered their ability to adopt newer technologies to improve their products. The other constraint was lack of information and knowledge to buy the right equipment or upgrade the equipment. Further, lack of knowledge with regard to appropriate technology usage to manufacture the products, little or no knowledge about what tools and equipment to buy to start the unit, resulted in the entrepreneur buying a wrong equipment or ending up with an equipment that they did not want to buy. The entrepreneurs also reported that lack of knowledge about various institutions, and the kind of support they extend to entrepreneurs starting a manufacturing unit, restricted their ability to select ventures which were profitable. They added that irrational selection of products or products selected as per the choice of the husband/ father/son in the family created problems for them and led to the collapse of the business enterprises for some. Entrepreneurs who ventured into manufacturing of products as per the choice of their husbands, did not have the skills to market the products. One of the entrepreneurs shared that initially, her husband helped her but later, he lost interest in her business and she was left to fend for herself. The entrepreneur further shared that she defaulted in paying the installment of her loan and did not know what to do. Though there is no dearth of institutional support for technology development, their access by the small and microentrepreneurs, especially women, is limited. Although there are 40 national laboratories well equipped and well staffed, their impact on industry in general, and the small industry sector in particular, has been extremely limited. The linkage of these laboratories to Small Industries Development Organization (SIDO) has been perfunctory. The National Research Development Corporation (NRDC), which was set up to lease the processes to the small and medium industry has not played a vital role in helping the small units to absorb the new technologies. It has been engaged more in the routine task of collection of royalties rather than serving as an instrument of development (Iyer, 1991).
13

Entrepreneurs were into manufacturing of iron chairs, bags (leather and synthetic rubber), conductors, fur toys. The IUP Journal of Entrepreneurship Development, V ol. VI, N o. 2, 2009

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Technology Support by NGOs

An important measure adopted to bring the entrepreneurs closer to technology by the NGOs in the study was through exposure to trade expositions and fairs, giving them some exposure to network and upgrade. One of the NGOs adopted the concept of mentoring14 to help these units to sustain and grow. Mentors were identified by the NGO based on the business activity. A mentor15 plays a vital role in the entrepreneurs business and thus, the NGO ensures that both are in constant touch. The mentors would volunteer their time and expertise to enable the entrepreneur to tackle the challenges of doing business and were role models for entrepreneurs to sustain their business endeavors. The methods of mentoring facilitated by the NGO were (a) One-to-one mentoring, where, one mentor was assigned to one entrepreneur; and (b) Group mentoring, where, long distances made one to one mentoring difficult. In group mentoring, a group of experts from various fields related to accounts, marketing, etc., visited the entrepreneurs once a month and assisted them in working out their business problems. Mentoring helped entrepreneurs during a crisis as they received support and advice on a regular basis. At times, it was difficult for the NGO to identify a suitable mentor due to (a) time constraints as the identified mentor(s) is busy with his/her own businesses, and (b) mentors were not from the same business undertaken by entrepreneurs, thus limiting the scope of mentoring.

Marketing of Products/Services
Marketing is vital for any enterprise to grow and survive. As per Meredith et al. (1982), to survive, all enterprises, whether big or small, must recognize their markets, attract sufficient resources, convert these resources into appropriate products or services and effectively distribute them to the consuming public Figure 3: Business Flow (Figure 3). The study shows that a majority of the entrepreneurs (94%) sold their products in the local market/locality and a small number (around 7%) to other agencies like wholesale dealers, food store outlets, and some to certain state government departments. Though the entrepreneurs sold their products in the local market, most of them did not have a permanent stall. This limited their opportunities to have a fixed client group as they kept changing their place of setting up their stalls. Further, the
14

Sells to: Consumers, Wholesalers and Retailers

Buys: Materials, Supplies and Equipments

Makes: Products and Services

15

Mentoring is based on the ancient Indian principle of Guru-Shishya parampara which envisaged a close relationship between the guru and shishya. Not only did the guru impart skills to the shishya, but also developed a sense of self-confidence and values. For details visit www.byst.online.org/mentors.htm Mentors from business, accounting, marketing, academics and so on are identified to help the entrepreneurs in tackling various facets of business management. 29

Women Entrepreneurship Development: The Catalytic Role of NGOs

price of the products was fixed by the wholesale dealer or the store outlet, and in such a situation, their power to bargain was much less than the bargaining power in the open market. This led the entrepreneurs to sell their products at a lower price; otherwise, their products would remain unsold due to reasons of bad quality or lack of variety in the product. Another reason could be their incapacity to expand the market by adding new products. Most microbusinesses cannot afford the research and development needed to put a new product on the market. As the marketing costs are usually high, entrepreneurs have to determine the necessary resources to be involved in both new product development and the marketing of new products constraining their capacity to earn profits and hindering their bargaining power. With regard to the services provided, majority of the entrepreneurs faced constraints in connection with limited outreach of the services, location of the service provider and the inability to advertise and promote their services. With regard to product positioning, the data on the selection of location revealed that almost all the entrepreneurs (94%) sold their products in the local market or locality and around 7% sold their products to other agencies like wholesale dealers, food store outlets, and state government departments. NGOs Role in Marketing: Availability of information plays a major role to comprehend the prevailing market dynamics and to take appropriate decisions with regard to the enterprise. The data in Table 2 indicates that entrepreneurs collected information from various sources to fix price and design promotional strategies for their product. In the case of microbusiness activities, introducing a wide range of new products or services was beyond the capacity of the entrepreneurs, but to exist in the market, they needed to be competitive with innovation in production or distribution, and focus their efforts on establishing customer demands not being satisfied in the market. Table 2 reveals that half of
Table 2: Sources of Information and Areas of Entrepreneurial Inputs
(Multiple Responses) Information Relating to Various Areas Husband/ Relatives/ of Enterprise Friends Family Management Marketing Raw Material 36 (28.8%) 33 (26.4%) Government Regulation/ Schemes Total 125 11 (8.8%) 14 (11.2%) 4 (3.2%) 9 (7.2%) Customers 10 (8.0%) 7 (5.6%) Other Entrepreneurs 2 (1.6%) 14 11.2%) Sources of Information Banks/ Govt. Organizations

NGOs

Self

NR*

3 (2.4%) 95 (76.0%)

63 (50.4%) 62 (49.6%) 2 (1.6%)

5 (4.0%)

2 (1.6%)

Note: * NR = No Response (% calculated out of the total respondents).

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The IUP Journal of Entrepreneurship Development, V ol. VI, N o. 2, 2009

the respondents (50%) gathered information about marketing, raw materials and growth of businesses themselves with guidance from mentors and expert16 support, provided by the NGOs with information relating to government regulations/schemes, and availability of finance. A majority (76%) of the entrepreneurs depended on the NGOs for the information. Considering that the availability of finance was one of the major impediments, this dependence on the NGOs was not surprising. The training inputs provided by the NGOs helped in enhancing the entrepreneurial personality, business management skills and marketing skills to deal with competition. The training inputs provided by the NGOs are broadly categorized in Figure 4.
Figure 4: Training Inputs
Skills in Accounting, Marketing, and Management

Inputs Guidance on Family Planning, Nutrition, Childcare and Leadership Training Technical Skills in Developing Own Business

Being entrepreneurial, involves combining the personal characteristics and financial means and resources within an environment to set up a business. Studies by Hisrich and Brush (1987), Shah (1987), Singh (1992), Dhillon (1998), Kaur and Bawa (1999), and Khajuria and Sinha (2000), stress that socio-psychological characteristics play an important role in the enhancement of entrepreneurial behavior. The training17 received by the entrepreneurs enhanced the independent orientation and business planning capabilities of the entrepreneurs. It increased their ability to find and evaluate opportunities, gather the necessary resources, and implement action to take advantage of opportunities. Further, the entrepreneurs exhibited leadership qualities in conducting most of their activities and took calculated risks. They believed in their ability to take decisions and deal with problems, but did not have adequate access to information and skills to plan for the growth of their business activities (Figure 5).
16

17

Trainings were organized by NGOs in the form of one-day sessions every month, on awareness building, leadership, accounting, cost-benefit analysis, market analysis, etc. Experts from the respective areas of specialization were invited to discuss and guide the entrepreneurs for effective management of their businesses. The trainings were either one-day sessions, which were conducted every month in groups, during monthly meetings or by organizing skill building workshops based on the need of the entrepreneurs. One of the NGO had a tie-up with the MCED (Maharashtra Centre for Entrepreneurship Development) and encouraged entrepreneurs to attend the EDP training for the growth and development of their businesses. 31

Women Entrepreneurship Development: The Catalytic Role of NGOs

Figure 5: Enhancement of Entrepreneurial Capabilities

77% Business Planning 98% Independent Orientation

88% Risk Taking Ability 79% Leadership Roles

90% Increased Decision Making Ability

Note: Percentage based on total respondent from each characteristic.

51% Tackling Competition

Socio-Psychological Constraints
The socio-psychological constraints discourage women to enter into business as this is often considered a nontraditional sector for them. The socio-psychological factors that hamper women to play their entrepreneurial role efficiently are shown in Figure 6.
Figure 6: Socio-Psychological Factors
Non-cooperative Attitude of Husband and Family Members Lack of Appreciation by the Family Lack of Motivation from Family and Society

5%

23%

14%

Lack of Networking

30%

Male Dominance

28% 0% 5% 10% 15% 20% 25% 30% 35%

Women have to combine entrepreneurial responsibilities with domestic chores hindering their entrepreneurial endeavors (Singh, 1992). Data revealed that the most common constraint
32 The IUP Journal of Entrepreneurship Development, V ol. VI, N o. 2, 2009

that created excessive mental tension was lack of networking ability. The growth of any business depends on marketing. Marketing means mobility and confidence in dealing with the external world, and as women have been discouraged from developing professional networks, it has resulted in business stagnation. Added to these is the lack of managerial and technical skills to run the business. Male dominance in the entrepreneurial arena, lack of appreciation and motivation from the family, added stress in running their businesses. The entrepreneurs shared that male bank officials thought it was a big risk to finance ventures run by women, and this hindered in accessing credit and marketing. They discouraged the entrepreneurs to start a business, as they believed that women in general are not good at business and so, the entrepreneurs had to cope with the hostile and unsympathetic attitude of bank officials. One of the entrepreneurs shared a remark from the bank officials, Why do you want to go through all the trouble of procuring a loan? Arent you better off staying at home? Faced with patronizing attitudes and noncooperation, many entrepreneurs were compelled to take male family members along with them to negotiate and act as financial guarantors, or the other option available was to abandon their loan request altogether.

NGO Support Through Follow-Up and Guidance

Follow-up is essential as it acts as a motivational force for the entrepreneurs to sustain their business activities, to deal with competition, and to repay loans. Follow-up and guidance support also enabled the entrepreneurs to deal with socio-psychological constraints. The main objective behind follow-up in the study was to sustain the motivation of the entrepreneurs. Entrepreneurs are uncertain at times whether they chose the right business activity, especially at a time of crisis or when there is a teething problem with the business. It is during such time that entrepreneurs drop out. Follow-up at this stage takes care of the dropouts and helps the entrepreneurs to survive and continue their business activities. The study shows that entrepreneurs required follow-up in four distinct areas (Figure 7).
Figure 7: Follow-up
Addressing Contingency Problems in Starting the Business

Business Proposal

Follow-up

Preparation and Filling Application Forms as per the Prescribed

Developing Action Plan vis--vis Loan Repayment Answering Queries Arising After Submission of the Forms

Format

Women Entrepreneurship Development: The Catalytic Role of NGOs

33

Follow-up acts as a feedback channel to measure the effectiveness of the training provided to the entrepreneur. The follow-up is done with a view to check the extent to which the objectives of training have been achieved. It is also an indication of the quality of training, and acts as a support mechanism for the entrepreneurs. The study shows that follow-up was in the form of regular meetings/mentoring, refresher trainings, or through informal get-togethers (Table 3).
Table 3: Follow-up Among Entrepreneurs
Follow-up Monthly Meetings Mentoring/Refresher Training Nothing at all Total Frequency 55 40 30 125 Response (%) 44.0 32.0 24.0 100.0

Table 3 shows that a majority of the entrepreneurs (76%) received follow-up but the entrepreneurs (24%) who did not receive any follow up revealed that lack of follow-up was a hindrance in the growth of their businesses, as they received no encouragement or motivation to deal with problems with the right attitude. The study shows that follow-up and guidance also helped the entrepreneurs to tackle problems of business leading to satisfaction with the business activity undertaken by them (Figure 8).
Figure 8: Satisfaction with Business
90 80 70 60 Percentage 50 40 30 20 10 0 Totally Satisfied Fairly Satisfied Neither Satisfied or Dissatisfied Level of Satisfaction Yes No Extremely Dissatisfied 12.2 26 50 50 87.8 74 66.6

33.3

34

The IUP Journal of Entrepreneurship Development, V ol. VI, N o. 2, 2009

The data in Figure 8 shows that 37% entrepreneurs who were fully satisfied with their businesses had received regular follow-up, compared to 19% of those who had not received any follow-up. According to the entrepreneurs, follow-up helped them to discuss their problems not only with the officials, but also with their peers. This created a feeling of oneness and confidence in dealing with problems, and helped in clearing doubts regarding their business dealings. Furthermore, it helped to develop business contacts, awareness about the market, broadening of the business knowledge base, and a process of feedback. It also acted as a motivational tool for entrepreneurs to repay their loan on time. NGO Support in Developing Networks: The entrepreneurship development process gained momentum by the inputs provided by NGOs. The entrepreneurs revealed that the support provided by the NGOs was mainly in the areas of finance, training, marketing and acquisition of market place in order to start and sustain their business. According to the entrepreneurs, the NGOs helped them in identifying the right sources of purchase of raw materials, identification of proper location/market area for sale of goods, obtaining finance with no collateral, and providing training and other technical assistance to set up the business. The NGOs further supported the entrepreneurs by coordinating with various banks, market guilds, wholesalers, and the like, enabling them to build up contacts and networks for sustenance of the business. The NGOs provided the entrepreneurs with assistance in networking, in the form of access to information through newsletters, promoting entrepreneurs participation in various exhibitions organized to enable them to display and sell their products to a wider range of customers. One of the NGOs also organized entrepreneurs meets, where the entrepreneurs not only got an opportunity to display and sell their products, but also to meet other entrepreneurs and discuss with them issues and problems related to business development. Networking was also done at a level where the NGOs directly liaisoned with other organizations for taking care of training and development. Counseling and guidance was also provided to solve family problems. Insurance, family counseling, health and legal support services were also provided to a certain extent by the NGOs.

Women Entrepreneurship: Scope for Advancement

For promoting entrepreneurship among women from the low-income group, rigorous efforts have to be made to formulate and launch a consortium of non-governmental and governmental organizations working for women entrepreneurs. Linkages within agencies also need to be reviewed to avoid clashes and overlapping of objectives in order to enhance efficiency and cover a large clientele. Based on the findings of this study, organizations, especially NGOs at the grassroots level, should approach entrepreneurship with a professional outlook by focusing on it as an alternative form of employment to tackle the existing underemployment and unemployment problem among women from the low-income group. Linkages at state and national level for generating information, technological development and research institutions need considerable strengthening for increasing the entrepreneurial performance. Access to credit was one of the main constraints coming in the way of entrepreneurs. The banking system was not sufficiently responsive to social banking needs and has obviously not been able to deal with barriers that hinder women from taking advantage of
Women Entrepreneurship Development: The Catalytic Role of NGOs 35

schemes or getting access to credit. Therefore, to improve access, special arrangements must be made for the availability of credit for women in the low-income group in view of their growing needs. Banks should have special counters for women to help them fill loan forms and other formalities which have to be fulfilled. Special stress should be placed on institutional credit mechanisms at different rates of interest for women in the low-income unorganized sector. More cooperative banks for women, and women development banks should be created at the state and central level. Marketing forms the crux of a business and it is important that before propagating the activity, the provision of a growing market should be made. An integrated approach should be formulated where women entrepreneurs are not only provided with credit, but also assured of adoption of appropriate technology, supportive services of supply and marketing, and appropriate infrastructure facilities. This could ensure that women not only venture into a small vegetable or flower shop, but also turn it into something more lucrative like being wholesale dealers or supplying to hotels and restaurants.

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