CHAPTER – I

INTRODUCTION

Entrepreneurship plays an imperative role in the growth of any society.

Development of entrepreneurship culture and qualitative business development

services are the major requirements for industrials growth. Entrepreneurship

emerges from an individual’s creative spirit into long-term business ownership,

employment creation, capital formation and economic security. Entrepreneurial

skills are essential for industrialization and for alleviation of mass unemployment

and poverty.

1.1 Women Entrepreneurship

Today, women in advanced market economics own more than 25 per cent

of all businesses and women-owned businesses in Africa, Asia, Eastern Europe

and Latin America are growing rapidly. In some regions of the world,

transformation to market economy, women entrepreneurs is a growing trend.

However, in India, the actual participation of women on income generating

activities is quite unsatisfactory, only eight per cent of the small scale

manufacturing units are owned and operated by women (Sumangala Naik, 2003).

Women entrepreneurship is the process where women organize all the

factors of production, undertake risks and provide employment to others. The

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definition of women entrepreneurship has never been differentiated on the basis of

sex and hence could be extended to women entrepreneurs without any restriction.

According to Medha Dubhashi Vinze, (1987) a women entrepreneur is a

person who is an enterprising with an eye for opportunities and an uncanny vision,

commercial acumen, with tremendous perseverance and above all a person who is

willing to face risks with the unknown because of the adventurous spirit she

possesses.

Empowering women is a challenge. Micro enterprises in rural area can help

to meet these challenges. Micro-enterprises not only enhance national

productivity, generate employment but also help to develop economic

independence, personal and social capabilities among women. Economic

empowerment of women by micro entrepreneurship led to the empowerment of

women in many things such as socio-economic opportunity, property rights,

political representation, social equality, personal right, family development,

market development, community development and at last the nation development.

1.1.1 Women Entrepreneurship in World

Entrepreneurship development among women can be considered a possible

approach to economic empowerment of women. Human resources and technology

are the two important factors of growth in new economic order. To activate these

two factors require entrepreneurship development in a big way in an economy.

Entrepreneurship and economic development have been found as positively

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correlated variables in various research studies conducted in different nations. The

growth of developed economics may be attributed to a large extent to the growth

of their entrepreneurship. Further, the growth of women entrepreneurship has been

relatively high in developed nations as compared to developing countries.

Women-owned enterprises represented nearly 40 per cent of the business firms in

the United States employing nearly 27.5 million people. It has been seen that

women out numbered men by two times, particularly when it comes to starting

new businesses in China during recent years. At present, there are over five

million women entrepreneurs constituting one fourth of all the entrepreneurs in

China. In Latin America, women constitute 15 to 20 per cent of all employers,

concentrated largely in the commercial and service sectors (Reyazuddin, 2010).

1.1.2 Women Entrepreneurship in India

Since ages India has been men-dominated country. But, time is changing

now. Women in India have outraged the fact that since hundreds of years they had

been following the orders of men. They now know their rights and duties and with

the spreading awareness amongst the women they are now no less than the men.

They are walking with men at the same pace in each and every field.

Following this latest trend, women are no less and backward any more.

Many women have established their own economy i.e., entrepreneurial empire and

are now ruling their world as they wished to. The hidden entrepreneurial potentials

of women have gradually been changing with the growing sensitivity to the role

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and economic status in the society. Skill, knowledge and adaptability in business

are the main reasons for women to emerge into business ventures.

"Women Entrepreneur" is a person who accepts challenging role to meet

her personal needs and become economically independent. A strong desire to do

something positive is an inbuilt quality of entrepreneurial women, who is capable

of contributing values in both family and social life. This is great news. But, a part

of women in some parts of the country still do not know their power. They don't

know that they can break the domination over men and move on, walk on and

fight for their freedom. They can live like princess in their own Disney world.

1.1.3 Women Entrepreneurship in Tamil Nadu

Traditionally, Tamil Nadu is one of the well-developed states in terms of

industrial development. In the post-liberalisation era, Tamil Nadu has emerged as

one of the front-runners, by attracting a large number of investment proposals. It

has been ranked as the third largest economy in India. But the Government’s

efforts come only from 1970 onwards for the promotion of self-employment

among women.

In Tamil Nadu each city has its own set of products that are manufactured

by women entrepreneurs using indigenous skills. Most of these products are made

with locally available materials and the skills available in production are seldom

found in other cities. Through traditional activities like production and sale of

domestic items such as garments have been taken up by women since long

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entrepreneurship on the modern lines has been found in industry and trade and

service concerns only for the last one decade or so.

The modern Tamil Nadu women is different from the housewife of past, to

whom selling or running a business carried a stigma which she found difficult to

shake off. Women entrepreneurs in Tamil Nadu possess organizational abilities,

marketing skills, entrepreneurial skills and efficiency and novel ideas. Many

women have vaulted the barriers of conditioning and reaped the rewards of a

globalizing economy. According to Lakshmi V. Venkatesan (2004), Founder

Trustee of Bharatiya Yuva Shakthi (BYST), “women in Tamil Nadu are the best

entrepreneurs in the country; they have shown that they could make excellent

entrepreneurs if they get support by way of finance and guidance”.

The government has implemented various schemes to Youth, Self-Help

Groups, Minorities and Weaker sections of the community. One such novel

scheme introduced by the former Chief Minister of Tamil Nadu in the name of

five lakh (Ramesh Kumar, 2011) Women Entrepreneurship Development

Programme is worth mentioning here. The objectives of Women Entrepreneurship

Development Programme (WEDP) under this scheme are to promote economic

activities among the SHG members through skill training, Women

Entrepreneurship Development, credit linkage and market support. Under the

scheme, every year one lakh self-help group women have availed Women

Entrepreneurship Development Programme through TCDW, DRDA and SHPI for

setting up of micro enterprises.

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1.1.4 Women Entrepreneurship Promotional Activities in Tirunelveli

District

In Tirunelveli District, Tamil Nadu Corporation for Development of

Women (TNCDW) was started in 1999 which aims at the socio-economic

empowerment of women. As per prelude, the corporation in implementing the

Mahalir Thittam among poor women to promote saving habits, nurture

entrepreneurial skills and aptitudes, promote exposure to banking transactions and

to free them from the clutches to local moneylenders.

Training is a very important component of the nurturing and strengthening

of the SHGs. In the pre-formation stage training is required to put the SHGs on the

right track. Training is also required in the stabilization stage to make the group

viable enough to work independently. Micro enterprises require some

entrepreneurial skills some of these can be acquired through training progarammes

like EDP. Government and NGOs have to motivate women to undergo these

training programmes so as to develop their entrepreneurial skills and capacities.

Specific trainings in manufacturing and service sector are available for the

prospective women micro entrepreneurs in Governmental as well as in NGOs.

In Tirunelveli District, Tamil Nadu Corporation for Development of

Women (TNCDW) has been implementing women entrepreneurship development

programmes to Self-Help Groups under the Mahalir Thittam. The following table

shows the year-wise distribution of SHGs women participants in various training

programmes, Tirunelveli District.

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Table: 1.1 - Year-wise Distribution of SHGs Women Participants in

various Training Programmes, Tirunelvli District

8

One of the important motivations of promoting the self help group is to

promote the women entrepreneurship in the urban-rural areas. So the government

and NGO offer many training programmes for developing their SHG women

entrepreneurship skills. The above table showed the number of self help groups

members who got training under various training programmes during the period

2001- 2010. It clearly shows the declining trends of training participants. The

major reason for that is the government has declined their fund for providing this

kind of training programme. In 2001-02 5,685 self help groups members got the

entrepreneurs’ training. In the year 2004-05 large number of SHG members got

the entrepreneurs’ training. Nearly 6,191 people got the training, among which

1,918 members belong to Hanuman River Project. These people were from

Shenkottai, Thenkasi and Kadaiyanallur. Because during that period government

acquired the land from the above mentioned area for constructing the dam. So they

provide special training programme to those SHG’s members and gave

explanation about that project. In the year 2007-08 lowest SHG members i.e., 412

got the training. Under different kind of training programmes many members

were trained through the Entrepreneurship Development programme (EDP).

27,533 members were trained through that programme. Next to the EDP, large

members (4,572) got Vocational Training Programme (VTP) and (3,920) Skill

Training. Only 24 SHG’s members got trained through vocational skill training

programme.

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1.2 SHGs, the Source of Women Entrepreneurs

The Origin of Self-Help Group can be traced from Grameen Bank of

Bangladesh, which was founded by Mohamed Yunus who got noble prize award

for peace. SHGs were started and formed in 1975 (Gunasekaran, 2010). In India,

NABARD initiated SHGs groups in 1986-87.

A self help group is a small voluntary association of poor people preferably

from the same socio-economic background. They come together for the purpose of

saving their common problems through self help. The number of members in one

SHG does not exceed 20. The groups have been recommended to be informal to

keep them away from bureaucracy, corruption, unnecessary administrative

expenditure and profit motive. The size is limited to 20 because any group larger

than this would need to be registered under the Indian legal system (Surender and

Manoj Kumar, 2010). These groups are expected to foster true democratic culture

where the entire members participate actively by taking part in the debate and

decision – making process, which is possible only in small groups. Groups are

expected to be homogeneous so that the members do not have conflicting interest

and all the members can participate freely without any fear. The following are the

main aims of SHGs (Dhiren Vandra, 2010).

1. To provide saving mechanism and develop cost effective credit delivery

system at gross root levels to poor who have no access to the formal

financial institutions.

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2. To equip the members with basic skills and knowledge required for

understanding and operationalising transactions the groups through

capacity building programmes.

3. To provide forum for members for discussing their socio-economic

problems.

4. To develop decision making capacity and leadership qualities among

members.

5. To generate awareness among the members about the ongoing development

programmes into the area.

6. To enable its members to become self dependent and self reliant.

7. It is offered for creating self-employment for income generating activities.

In one line, SHGs can be stated as, “a plan by the people, of the people and

for the people” reflecting real people, participating in the developmental process at

micro level (Khare, 2007).

In Tamil Nadu, The SHG approach was started in a small way in

Dharmapuri District in the year 1989 with the assistance of International fund for

Agricultural Development. Later the scheme was extended to the east while Salem

and South Arcot district in the year 1991-92 and further extended to Madurai and

Ramanathapuram in the year 1992-93.

Self Help Groups (SHGs) are a viable alternative to achieve the objectives

of rural empowerment (Lakshm, 2010). SHG plays a pivotal role in social

transformation and social economic betterment of rural women. Unlike, a city

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level, where scope for employment is abundant, Tamil Nadu is a drought prone

area where people cannot depend purely on agriculture all through the year.

Moreover, Tamil Nadu is based on its agro-economic climate conditions. Thus

non-farm activities like handicrafts, rope making, embroidery, catering services,

repair shops, soft drink stalls etc., give immense scope for women to earn their

livelihood when they do not have income through agricultural activities. Banks in

association with NGOs give training to SHG members in all these activities. The

government of Tamil Nadu encourages the SHG activities and marketing of their

products.

A woman as an entrepreneur is economically more powerful than as a mere

worker because ownership not only confers control over assets and liabilities but

also gives her the freedom to take decisions. Through entrepreneurship

development a woman will not only generate income for other women in the

locality, but also will have a multiplier effect in the generation of income and

poverty alleviation.

1.2.1 SHGs in Tirunelveli District

Over the past 10 years, nearly one million SHGs have been formed in India.

The SHGs have been increased with almost 80 per cent (Gunasekaran, 2010) in

South India especially in Tamil Nadu and Kerala. There has been an exponential

growth in the number of SHGs from the year 2005. The enrolment rate of women

in the SHGs is increasing due to so many reasons. Most of the members joined in

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SHGs to improve their socio-economic conditions, and employment opportunities

etc., the basic reason for the emergence of SHGs are to make women to be

independent. Next, NGOs involve themselves to create awareness about the SHGs

among the women over the past 10 years. 18,985 SHGs have been formed in

Tirunelveli District. The following table shows that the year-wise SHGs formed in

Tirunelveli District during 1999-2010.

Table: 1.2 – Year-wise Groups Formed: Details in Tirunelveli District

Year Groups Members

1999-00 821 14,391

2000-01 2,147 37,797

2001-02 1,598 30,532

2002-03 951 17,645

2003-04 1,971 35,078

2004-05 1,330 23,150

2005-06 5,050 86,054

2006-07 820 13,574

2007-08 1,397 409

2008-09 900 13,487

2009-10 2,000 28,057

Total 18,985 3,00,174

AAGR 11.11 9.82

Source: Tamil Nadu Corporation for Women Development, Tirunelveli District.

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The Table 1.2 shows the information for the past ten years about the self

help group formed in Tirunelveli district. In the year 2000-01, 2,147 self help

groups were formed. In the year 2005-06 maximum number of groups i.e., 5,050

self help groups were formed. During the period of 2009-10, 2000 groups were

formed. During the last ten years totally 18,985 groups were formed in Tirunelveli

district. The number of people joined in the self help groups also increased. In the

year 2000-01, 37,797 people joined in self help group, in the year 2005-06 greatest

number of people joined in the self help group, in that year 86,054 people joined.

During the past ten years 3,00,174 people joined self help groups in Tirunelveli

district. The annual average growth rate of SHGs, and members are 11.11 per cent,

9.82 per cent and respectively.

The table 1.3 gives the block wise SHGs formed Details in Tirunelveli

District (2010). Palayamkottai block having higher self help groups. During the

past ten years, the number of SHG of this block was 2,941, next to Palayamkottai.

Ambasamudram and Vallioor block show the higher number of SHGs. The

number of SHG was 1,612 and 1,347. Kuruvikulam block shows the lowest

number of SHGs; the SHG was only 441 blocks showed. The total number of self

help groups in the past ten year in Tirunelveli was 18,985.

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Table: 1.3 – Block-wise SHG’s Formed Details in Tirunelveli District

(2010) Sl.No

Name of the Block

No. of SHGs No. of Members

1 Alangulam 1,014 15,987

2 Ambasamudram 1,612 25,589

3 Cheranmahadevi 1,015 15,747

4 Kadayanallur 734 11,835

5 Kadayam 818 12,564

6 Kalakad 834 13,214

7 Keelapavoor 825 12,886

8 Kuruvikulam 441 7,156

9 Melaneelithanallur 445 6,764

10 Manur 833 13,302

11 Nanguneri 673 10,404

12 Palayamkottai 2,941 45,923

13 Pappakudi 1,065 16,138

14 Radhapuram 1,210 20,228

15 Shencottai 768 11,828

16 Sankarankovil 747 12,386

17 Tenkasi 914 14,062

18 Valliyoor 1,347 22,058

19 Vasudevanallur 749 12,003

Total 18,985 3,00,174

Source: Tamil Nadu Corporation for Women Development, Tirunelveli District.

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1.3 Models of SHG

There are three models to provide micro loans to the SHGs from external

sources. They are as follows.

Model I: SHGs Formed and Financed by Banks

SHG formed directly by banks under this model, the banks themselves act

as SHPIs in forming and nurturing groups, opening their savings accounts and

providing them with banks credit.

Figure: 1.1 - Model I - SHGs Formed and Financed by Banks

Forming and Nurturing

Savings

Credit linked to Savings

Members

Model II: SHGs Formed by NGO and Directly Financed by Banks

In this model NGO would organize the poor in to SHGs, under take training

for awareness building, entrepreneurship and skill training, help in arranging

inputs, extension and marketing, introduce saving and internal lending, help in

maintenance of accounts and link them with the banks for credit requirements.

Banks directly provide loans to SHGs with recommendations of the NGO. In this

model NGO act as facilitator.

Bank

SHG

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Figure: 1.2 - Model II - SHGs Formed by NGO and Directly Financed

by Banks

Forming, Nurturing

Monitoring

Credit linked to Savings

Savings

Members

Model III: SHGs Financed by Banks Using NGOs as Financial

Intermediaries

In this case, besides acting as facilitator, the NGO also works as financial

intermediary. Here the loan is given to NGOs by the bank for lending the

SHGs/individuals. In this linkage model NGO would be legally responsible for

repayment, and would bear the risk of non-payment. Involvement of NGOs in

micro-credit system would have positive influence as they are grass-root agencies,

with good information about borrowers. Thus, adverse selections and productions

of recovery could be avoided. At the same time NGOs would be in a position to

help rural/urban poor, particularly women to bring them above poverty line and

create rural/urban employment.

NGOs, Federation

of SHGs

BANK

SHGs

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Figure: 1.3 - Model III - SHGs Financed by Banks Using NGOs as

Financial Intermediaries

Forming, Nurturing,

Monitoring

Wholesale Credit

Credit

Savings SHG

Members

This SHG- NGO-Bank integration is very much essential to credit delivery

for self-employment and other business activities which could be as effective

vaccine against poverty. The ultimate goal of this linkage programme is not just

promotion of SHGs but the focus is poverty eradication through income

generation.

1.3.1 SHGs – Bank linkage in India

The micro finance program in India emerged in the 1970’s to provide poor

with access to credit. It has become responsible to fulfill the small financial needs

of the core poor of the society. This program has broken the centuries old social

NGO, Federation

of SHGs

BANK

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customs of seclusion of people and highly successful in bringing them to the near

main stream. To support that micro finance can be an important tool to fight

poverty; the Unitated Nations declared 2005 to be the international year of micro

credit. Poverty alleviation is considered to be socially desirable goal in any

developing country. The inclusive micro finance policy where in the core poor

have can easy access where the poor could access savings, credit, insurance and

other services is making the core poor to come art of strong clutches of poverty

hold.

In India, (Laxman B. Bahir, 2010) Andra Pradesh, Uttar Pradesh, Tamil

Nadu and Karnataka lead the country in SHGs. these four states accounted for

two-thirds of the SHG credit linkages with Andhra Pradesh alone accounting for

40 per cent. Of these four states, only Uttar Pradesh had a higher poverty ratio

(31.15%) than the national average of 26.1%. Some of the factors identified for the

outstanding performance of Andhra Pradesh in the SHG-bank linkage program

were the following: (a) Forty percent of the SHGs that were credit linked under

Development of Women and Children in Rural Areas (DWCRA) were

concentrated in Andhra Pradesh alone. (b) 2700 groups were promoted in that

state under a special project sponsored by United Nations Development Program

called South Asia Poverty Alleviation Program. (c) The credit movement in the

south led to the evolution of community based development finance institutions,

which were composed of SHGs promoted by NGOs or by district rural

development agencies. (d) District collectors, NABARD district development

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managers, and lead bank managers profoundly supported the SHG-bank linkage

program in the state. (e) Leading NGOs in the microfinance sector in India, like

Mysore Resettlement and Development Agency (MYRADA), Society for Helping

Awaking Rural Poor through Education (SHARE) and Bharatiya Samruddhi

Investments Consulting Services Ltd. (BASIX), were also working in Andhra

Pradesh. Among all the states of India, the Human Development Index is lowest in

Uttar Pradesh. Credit links here were facilitated by Uttar Pradesh Land

Development Corporation, which is implementing a World Bank–aided Land

Development Program with the component of organizing the rural poor as SHGs.

The other two states, Karnataka and Tamil Nadu, in south India were

supported by large sized NGOs like MYRADA and SHARE. As these NGOs had

greater creditability it enabled them to leverage bank finance easily. Moreover, as

the microfinance movement had “originated” in South India, the awareness and

acceptability of the program was relatively higher. Kerala, Maharashtra, Orissa,

West Bengal, Gujarat, Madhya Pradesh, Rajasthan, and Bihar together had 23.6%

of SHG linkages while the remaining states and union territories had only 1.47%.

Rajasthan, Meghalaya, Orissa, Bihar, West Bengal, Madhya Pradesh, and Gujarat

have been identified by NABARD for having higher potential of increasing SHG

outreach. In general the lower credit linkages in some of these states can be

explained by a lack of concentrated efforts by banks; the inability of banks to

identify NGOs with savings and credit groups; a lack of motivation among

bankers; a lack of large sized NGOs with previous background working with

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SHGs; and the unsuitability of the approach to the region Thus the SHGs - Bank

linkage program has surely emerged as a dominant micro- finance dispensation

model in India.

1.3.2 SHGs – Bank linkage in Tamil Nadu

Tamil Nadu has become the third largest state after Andhra Pradesh and

Uttar Pradesh in the self-help group (SHG)-bank linkage programme launched by

the National Bank for Agriculture and Rural Development (NABARD).

In the state, 209,197 (Narasimhan, 2012) SHGs were credit linked with a

financial assistance of `2,791.65 crore in 2009-10, taking the cumulative number

of SHGs credit linked to 852,791 (including repeat doses) with a bank loan of

`9,394.70 crore. NABARD said that a pilot project on SHG-Post Office linkage

was successful and that additional revolving fund assistance (RFA) of `2 crore has

been sanctioned to the department of Posts for lending to SHGs. Most banks were

lending to Microfinance Institutions (MFIs) for expanding their SHG portfolio,

since MFIs provide faster financial access to the SHG clientele with cheaper

delivery costs. NABARD estimates that more than 1,500 NGOs are involved in

SHG-bank linkage programme. The programme should now focus on its

sustainability by encouraging promotion of micro enterprises and activity-based

groups and SHG federations among mature SHGs.

It recommends special training programmes for skill development/skill

upgradation for SHGs to equip them to set up micro enterprises. This would help

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correct the regional imbalance or uneven growth in various districts and to ensure

comprehensive coverage of the entire rural poor under the SHG fold, it said. In

areas where bank linkage is weak or non-existent, it said bulk lending or RFA to

MFIs or NGOs was being considered and RFA to the tune of `424.60 lakh

(cumulative) has been sanctioned to 10 agencies in Tamil Nadu so far. The amount

released and outstanding as of October 2009 was `4.23 crore and `2.32 crore

respectively. Table1.4 given below shows the details of credit availed by SHGs in

Tamil Nadu

Table: 1.4 - Progress of SHGs-Bank Linkage in Tamil Nadu

Sl.No Year Bank loan(`. crore)

1 Upto 2001 120.30

2 2001-02 97.91

3 2002-03 184.65

4 2003-04 271.32

5 2004-05 490.62

6 2005-06 600.44

7 2006-07 593.45

8 2007-08 804.70

9 2008-09 2,174.57

10 2009-10 2,791.65

Total 8,129.61

Source: WWW.tamilnaduwomen.org

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Tamil Nadu is one of the important states which progressively supported

the self help groups’ activity by providing huge amount of loan. Except the year of

2006-07, the loan provided for the self help groups increased over the period of

time. Up to 2001 self help groups get only `120.30 crores. It has increased over

the period of time. In 2005-2006 it was `600.44 crores it falls slightly on 2006-07

the amount was `593.45 and it increased `.2791.65 crores in 2009-2010.

1.3.3 SHGs-Bank Linkage in Tirunelveli District

The SHG-Bank linkage programmes was introduced in 1992 as a

mechanism to provide the poor in rural areas, at their doorstep easy and self

managed access to formal financial services. Self Help Groups have got financial

support from various financial institutions such as Nationalized Banks,

Commercial Banks, Private Banks, and so on. NABARD is one of the nationalized

banks, which has given special importance to promoting Self-Help Groups

activities.

Credit plays very important role in the lives of the poor in a developing

economy. The majority of the poor population is left with an inadequate resource

base for production. In the rural areas activities like weaving, handlooms, fiber

cutting etc. is undertaken through these activities. Standard of living increase and

it generates the employment opportunities.

Micro-Finance is a financial service of small quantity, provided by

entrepreneurs, particularly SHG women entrepreneurs, from low income

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households. These loans are generally offered without any collateral. Micro

Finance is a provision of thrift, credit and other financial services and products of

very small amount to the poor in rural/urban, As a result, micro entrepreneurship

is gradually growing to importance among the jobless, particularly among the

educated and uneducated urban and rural women. As on 31st March 2010,

(TNCDW, Tirunelveli District) NABARD’s loan of `24,243.30 Lakhs more

availed of by 20293 SHGs from banking system in Tirunelveli District.

Table: 1.5 - Progress of SHGs-Bank Linkage in Tirunelveli District

Sl.No Year No. of SHGs Loan Disbursed

(`in lakhs)

1 2000-01 309 53.03

2 2001-02 824 176.10

3 2002-03 829 348.65

4 2003-04 2,132 1528.98

5 2004-05 671 1,584.82

6 2005-06 4,182 3,807.00

7 2006-07 1,201 1,245.30

8 2007-08 1,884 1,306.29

9 2008-09 4,349 7,713.94

10 2009-10 3,847 6,471.90

Total 20,293 24,243.30

AAGR 88.41 122.45

Source: Tamilnadu Corporation for Development of Women Ltd., Tirunelveli

District.

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The above table clearly shows, in Tirunelveli NABARD’s loan distributed

among the Self-Help Groups have increased over the period of time. In the year

2000-01 only 309 Self-Help Groups got the financial support from the NABARD.

It increased 2,132 Self-help groups in 2003-04 and 4,349 groups in 2008-09. It

also illustrates that, the amount of loan distributed among the Self-Help Groups

also increased over the period of time. In the year 2000-01 the amount of loan was

`53.03 lakhs. It increased to `1,584.82 lakhs in 2004-05 and `7,713.94 lakhs in

2008-09. The number of benefited Self-Help Groups and the volume of loan

distribution among the groups are subjected to fluctuation over the period of time.

The annual average growth rate of Self Help Group formation is 88.41

during the study period. The annual average growth rate of bank loan disbursed is

122.45 per cent during the study period.

1.4 NGOs, Intermediaries of Women Entrepreneurship

NGOs have emerged as a key player in the field of micro credit. They have

played the role of intermediary in various dimensions. NGOs have been active in

starting and participating in SHG women entrepreneurs. This includes creating

awareness of the importance of micro-credit within the community, as well as

various national and international donor agencies. They have developed resources

and tools for communities and micro-credit organizations to monitor progress and

identify good practices. They have also created opportunities to learn about the

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principles and practice of micro-credit. This includes publications, workshops,

seminars and training programs.

1.4.1 Origin of Non-Governmental Organization

The concept of NGO (Lekore, 2007) came into use in 1945 following the

establishment of the United Nations Organizations which recognized the need to

give a consultative role to organizations which were classified as neither

government nor member states. NGOs take different forms and play different roles

in different continents, with the NGO sector being most developed in Latin

America and parts of Asia. The roots of NGOs are different according to the

geographical and historical context. They have recently been regarded as part of

the “third sector” or not-for-profit organizations. Although there is contestation of

the definition of an NGO, it is widely accepted that these are organizations which

pursue activities to relieve the suffering, promote interests of the poor, protect the

environment, provide basic social services, and undertake community

development. They should have some following features.

1. NGO should be privately set up sufficiently autonomous in its activity that

is independent of direct governmental control.

2. It cannot be considered a political party with an aim of attaining political

power.

3. NGO should support development which demonstrates its public character.

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According to the estimates of the working groups of NGOs, there are about

30, 000 NGOs in India (Sattanathan, 2005). A rapid growth took place in the

1990s. With the SHG linkages programme introduced in 1989, the NGO sector has

been recognized as a crucial partner recognizing the strengths of the NGOs in

organizing the community and the potential in saving and credit programmes.

The concept of NGO and social welfare are not new India has a glorious

tradition of voluntary organizations. In the pre-independence days, Rabindranath

Tagore in his santiniketan experiments showed how rural development could be

brought about by integration of education and culture. Gandhiji in his Wardha

experiment showed how village industries could bring about the development of

the poorest sections of the people in this country.

After independence too, there was a lot of talk about the role of NGOs and

people’s participation when we started our planning process in the early 50s. The

British Government in India spent minimum resources on social welfare

programmes and voluntary agencies played an important role in developing

programmes for the poor, the destitute, women and children.

1.4.2 NGOs Functions and Advantages

In the last decade, Non-Governmental Organizations (Hedayat Allah

Nikkhah et al., 2010) have gained increased attention among scholars and

practitioners of development. They have become increasingly important agents of

the development process in the countries of the south, in all of their main areas of

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work such as humanitarian relief, long-term development, policy formation and

political advocacy. On the other hand, there is a current view that NGOs constitute

a viable alternative to government as channels of development assistance,

particularly in developing countries, some of the NGOs functions and advantages.

1. They are good at reaching and mobilizing the poor and remote

communities.

2. They help empower poor people to gain control of their lives, and they

work with and strengthen local institutions.

3. They carry out projects at lower costs and more efficiently than the

government agencies.

4. They promote sustainable development.

1.4.3 Role of NGOs in SHG Activities

For more and more participatory role of women and their economic

empowerment women groups - Self Help Groups (SHG) and women Cooperatives

need to be organized in rural areas for production activities, like procurement of

raw materials, their processing, storage, quality control and marketing of finished

products, Department of Women and Children Development and Central Social

Welfare Board assist voluntary organization is encouraged by the Government to

set up production unites creating more employment (Rakesh Prasad, 2007).

Homogeneous groups of 12 to 20 women can form SHG for economic

activities. By making profits and getting loans from the banks, they can link

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themselves through NGOs, and achieve success, SEWA movements in

Ahmadabad (Gujarat) helped in mobilizing self-employed women and providing

support services. DWARCA programme in Periyar District (Tamil Nadu) has

lifted women out of poverty and men-folk are proud of their women having bank

accounts. VARDAN, a New Delhi based NGO is assisting poor farmers and

women of weaker section in Bihar, by providing training in High yielding seed

multiplication, food processing, home crafts and tailoring, etc., Thus SHGs and

NGOs both together can play a vital role in income and employments generating

activities in various agro based industries (Rakesh Prasad, 2007).

1.4.4 NGOs in Tirunelveli District

In Tirunelveli District, 21 NGOs got registered in Tirunelveli District under

TNCWD and are engaged in forming SHGs in all the 19 blocks of the district.

Apart from the above mentioned 21 NGOs about 50 more NGOs which do not

come under the fold of the TNCDW are involved in forming and assisting SHGs.

The district offers immense potential for forming SHGs due to its backwardness.

All the blocks in the district are covered by the NGOs and formation of SHGs is

continuing. Table 1.6 given below shows the details of NGOs in Tirunelveli

district.

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Table: 1.6 – NGO-wise Groups Formed Details in Tirunelveli District

SI.No

Name of the NGO

No. of

SHGs

No. of

Members

1 ARASAN 80 1104

2 ART 704 11150

3 ATSDS 39 604

4 AUSSI 527 8242

5 CAFARD 152 2391

6 CAST 525 8352

7 CODE 959 16496

8 CPE 551 8440

9 GSSS 562 8628

10 IOP 238 3761

11 JPT 695 10458

12 Malarchi 1565 25433

13 RED 57 841

14 RIP 630 10051

15 RRO 1768 27101

16 RVS 494 7922

17 SCAD 1202 18949

18 SISTER 59 740

19 TSSS 1252 19764

20 VIVEK 43 571

21 VMSSS 99 1474

Total 12201

192472

Source: Tamil Nadu Corporation for Women Development, Tirunelveli District.

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There are many NGOs originally started with varying activities. The

researcher has selected four NGOs namely SCAD, AUSSI, CAST, Jana priya

Trust. In the study area, these four NGOs are mainly facilitating in promoting

SHGs women entrepreneurs through entrepreneurship development programme

which is reported by TNCDW. Their activities are mainly:-

a) Awareness generating and motivation of SHGs member.

b) Ensuring prompt repayment of internal loans to build credit worth ness for

external credit.

c) Up gradation of skills of SHG members through relevant training.

d) Improving skill in financial management.

e) Encouraging SHGs to involve in income generating activities and

f) Planning and achieving sustainability of SHGs

Women are encouraged to start micro enterprises that enable them to

develop skill and confidence to earn an income. This is done through self help

groups (SHGs) where women are given training for a variety of income generating

schemes. The SHG enterprises include food processing, garments making, fiber

products and cows, goat rearing etc., NGOs play vital role in upgrading their

skills, product quality, processing bank loans, and finding a market for the

products.

In Tirunelveli District, SHGs have helped women entrepreneurs to earn

income ranging from `1000 to `1500 per month from the economic activities.

Most of the women have opened savings accounts and are able to contribute to the

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household with regular livelihood support. Increase in family income, has resulted

in better standard of living for the whole family. Women have earned respect in

the community and now have a greater say in the family affairs and in community.

1.5 Government Programmes for the Development of Women

Entrepreneurship

The Centre and State governments in India have sponsored various

employment generation and poverty alleviation programmes for development of

entrepreneurship among youth, especially women (Kamala Kanan, 2005). Some of

them are as follows:

a) Prime Minister’s Rozgar Yojana (PMRY)

The PMRY was launched on 2nd

October 1993 with the objective of

providing employment opportunities to educated unemployed youth through

setting up of small-scale enterprises in rural and urban areas. The loans under the

scheme are available to all educated unemployed youth between 18-45 years, for

women who have passed 8th

standard examination for undertaking all

economically viable activities including agriculture and allied activities. This

scheme also provides for preference to weaker sections and women.

b) Swaranjayanti Gram Swarozgar Yojana (SGSY)

SGSY which was initiated in April 1, 1999, is a credit cum subsidy

programme. It aims at establishing a large number of micro enterprises in rural

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areas. The beneficiary families may be individuals or groups (SHGs). In order to

give an impetus to the group, a revolving fund of `25, 000 is provided from banks.

In addition, for individuals subsidy is also provided at 30 per cent of the project

cost subject to a maximum of `7,500. In respect of SCs/STs and disabled persons

subsidy is 50 per cent of the project cost subject to a maximum of `10,000. For

groups of swarozgars the subsidy is 50 per cent of the scheme cost, subject to per

capita subsidy of `10,000 or a total of `1, 25,000 whichever is less. Within the

target groups, special safeguards have been provided to vulnerable sections by

way of reserving 50 per cent benefits for scheduled castes/scheduled tribes and 40

per cent for women and three per cent for disabled persons. It is envisaged that 50

per cent of the groups formed in each block should be exclusively for women.

c) Rural Employment Generation Programme (REGP)

The Government through Khadi and Village Industries commission is

implementing this programme for the promotion and development of agro and

rural industries. Under this scheme, (.Kamalakanan and Namasivayam, 2005) the

KVIC provides margin money assistance at the rate of 25 per cent of the project

cost up to `1 lakhs and for the projects above `10 lakhs and up to `20 lakhs, rate

of margin money is 25 per cent of `1 lakhs plus 10 per cent on remaining cost of

the project. In the case of SC/ST/OBC/ women/physically handicapped and other

special category, the margin money grant is 30 per cent of the project cost upto

`10 lakhs and for projects above `10 lakhs and upto `25 lakh, it is 30 per cent of

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`10 lakhs plus 10 per cent of the remaining cost of the project. Under this scheme

the beneficiary’s contribution is 10 per cent of the project cost. In the case of

SC/ST and other weaker sections, beneficiary’s contribution is five per cent of the

project cost.

d) District Rural Industrial Project (DRIP)

The National Bank for Agriculture and Rural Development is implementing

this programme. The main objective of the project is to generate sustainable

employment opportunities through co-ordinate efforts in financing rural nonfarm

enterprises, creation of essential infrastructure and also enabling promotional

agencies to take up entrepreneurial development, technology up gradation, raw

material supply, marketing assistance and other common service with an area

covering the entire district. The emphases in the project are on provision of timely

and adequate credit support.

e) Support to Training and Employment Programme (STEP) for

Women

It aims at increasing self reliance and autonomy of women by enhancing

their productivity and enabling them to take up income generation activities.

Specific objectives of the STEP are:

i) to mobilize women in small viable groups.

ii) to provide training for skill upgradation.

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iii) to enable groups of women to take up employment-cum-income-

generation programme and

iv) to provide support service for further improving training and

employment conditions of women.

f) Rashtriya Mahila Kosh (RMK)

It was set up in 1993 to provide credit to poor women in the informal sector

for income generation activities through non-government organizations and

institutions, engaged in thrift and credit promotion.

1.6 Statement of the Problem

Unemployment and lop-sided development are the growing problems in

India. To reduce their magnitude, the Government of India encourages the people

to engage in self-employment through various development programmes. Among

these programmes, the most familiar ones are Self Help Groups, micro-credit, etc.

A number of studies have been attempted to evaluate the various development

programmes but only few studies have given an overall view about the role of

SHGs in promoting women entrepreneurship development.

Women’s role in the productive sector has always been dictated by the

economic advancements of the time. Development in the productive sectors over

the decades isolated and cornered women, in one way or the other. The industrial

revolution, thus, brought about a drastic change in the economic life of women.

The pride of place which they enjoyed in the traditional society suffered a setback.

35

They became mere wage earners in the new factory system. Further, to suit the

self motives of the authorities, they were internationally relegated to the role of

‘house wife’ and ‘mother’. SHGs have proved to be an effective tool or instrument

in India to address the problem of unemployment on the one hand and also to

empower women on the other.

In the SHG programme, women are brought together, made to involve in

saving scheme and prompted to create internal resources to meet emergency or

business needs and thus help to do away with money lenders and also promoting

entrepreneurship. While doing so, it focuses on the economic empowerment

leading to social and political empowerment.

It aims in analyzing the socio-economic condition of SHG trained women

entrepreneurs through NGOs. In order to develop the entrepreneurial skills and to

expose the scope of entrepreneurial activities in urban-rural area, an in-depth

study is highly essential. This has provided the motivation for the researcher to

make an in-depth study on the various aspects of the micro-enterprises wined by

women.

Hence, the present study intends to focus on the role of Self Help Groups in

promoting women entrepreneurship in Tirunelveli District and also various skills

gained by women entrepreneurship development training programme and gives

some suggestions for developing the women entrepreneurial skills and also to pave

the way for other women to start new ventures.

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1.7 Problem Setting

Keeping in view the experience of developed nations the Government of

India too initiated various policy measures during the post liberalization period for

the development of entrepreneurship. There has been a special focus on women

through these measures to improve their participation in entrepreneurial related

activities. The government of India has set up a large number of institutions to

provide financial and other support for the growth of entrepreneurship among

women. Post-reform period has also witnessed substantial increase in the

participation of NGOs in entrepreneurship development related activities. As per

one estimate about 9.5 per cent women entrepreneurs are engaged in small

business at present. However, this proportion is quite low as compared to

developed nations. There is a vast scope in the country to improve on this front

within the changed socio-economic scenario, when literacy level among women

has risen. Women are entering into technical education. Their participation in

entrepreneurial activities, however, has not increased with the rate it should have.

An attempt has been made in the present study to assess the various skills gained

by trained SHG women entrepreneurs in entrepreneurship development training

programme conducted by SHGs through NGOs.

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1.8 Chapterisztion of the thesis

The study has been structured into the following chapters;

CHAPTER I - INTRODUCTION

This chapter introduces the concept of women entrepreneurship at different

levels and SHG as the source of women entrepreneurship along with NGOs as the

Intermediaries of women entrepreneurship, statement of the problem and

chapterization of the thesis.

CHAPTER II – CONCEPTS AND REVIEW OF RELATED LITERATURE

This chapter shows various concepts used in the study and a precise review

of the previous related studies.

CHAPTER III – METHODOLOGY

This chapter covers the scope of the study, objectives, hypotheses,

methodology, and limitations of the thesis.

CHAPTER IV - PROFILE OF THE STUDY AREA

This chapter explains the study areas, the demographic features,

infrastructure and others in India, Tamil Nadu and Tirunelveli.

CHAPTER V – ANALYSIS AND DISCUSSION

This chapter deals the socio- economic condition of SHG trained women

entrepreneurs, and evaluate the skills gained through women entrepreneurship

development programme, details of SHG trained women’s entrepreneurial

activities and the economic factors influencing SHG women entrepreneurs in

Tirunelveli district.

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CHAPTER VI – SUMMARY OF FINDINGS, SUGGESTIONS AND

CONCLUSION

Hence the summary of work done, findings of the study, Suggestions, and

conclusion are drawn according to the objectives of the study.