A

Project Study Report

On

Contemporary Issues

Titled

‘Emergin concept of women enterpreneurs’

PARTIAL FULFILLMENT OF TWO YEARS FULL TIME COURSE IN

“MASTER OF BUSINESS ADMINISTRATION”

OF RAJASTHAN TECHNICAL UNIVERSITY, KOTA

Batch(2010-2012)

SUBMITTED TO: SUBMITTED BY:

FMS, MAIET JAIPUR Priyanka Sharma

MBA 1st YEAR

Faculty of management studies

Maharishi Arvind institute of engineering & technology, Jaipur

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Acknowledgement

I express my sincere thanks to my project guide, Mrs.Suman Pareek - Lecturer, Department of

Faculty of management studies ,Maharishi Arvind institute of engineering & technology

for guiding me right form the inception till the successful completion of the project. I sincerely

acknowledge him for extending his valuable guidance, support for literature, critical reviews of

project and the report and above all the moral support he/she/they had provided to me with all

stages of this project.

I would also like to thank the supporting staff of Department of Management Studies, Maharishi

Arvind institute of engineering & technology, for their help and cooperation throughout our

project.

Priyanka Sharma

MBA 1st YEAR

2

PREFACE

Management education required close co –operation between business &institution. Theory

and practical are two inseparable parts of any type of education and are essential for management

study. Practice makes a man perfect .A student gets theoretical knowledge from classroom and

gets practical knowledge from industrial training, When these two aspects of theoretical

knowledge and practical experience together then a student is full equipped to secure his best. In

conducting the project study in an industry, student gets exposed and has knowledge of real

situation in the work field and gains experience from them. The object of the summer the

training cum project is to provide an opportunity to experience the practical aspect of

management in any organization .It provides a chance to get the feel of the organization and its

function.

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CONTENTS

1. INTRODUCTION

2. PUSH-PULL FACTORS AND WOMAN IN BUSINESS

3-METHODOLOGY

4.IMPEDIMENTS FOR WOMEN ENTREPRENEURSHIP DEVELOPMENT

5.WOMEN’S ENTREPRENEURSHIP: ISSUES AND POLICIES

6.CONCLUSION

7.Bibliography

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INTRODUCTION

It is a general belief in many cultures that the role of women is to build and maintain the homely

affairs like task of fetching water, cooking and rearing children. Since the turn of the century, the

status of women in India has been changing due to growing industrialization, urbanisation,

spatial mobility and social legislation. With the spread of education and awareness, women have

shifted from kitchen to higher level of professional activities.

Entrepreneurship has been a male-dominated phenomenon from the very early age, but time has

changed the situation and brought women as today's most memorable and inspirational

entrepreneurs. In almost all the developed countries in the world women are putting their steps at

par with the men in the field of business. Except some Islamic countries of the world the law of

the country has been made in favour of the development of women entrepreneurship.

This presentation is designed in four different sections. The first one which is continuing under

the head 'introduction' depicts a general view of women entrepreneurship and the organisation of

the article. The next section deals with the modern avenues of the women entrepreneurs. The

third section involves the study of new Central Government scheme for the women entrepreneurs

and the last section contains the conclusion of the study.

MODERN AVENUES OF THE WOMEN ENTREPRENEURS

The efforts of Udyogini an NGO may be cited here as an example for development and training

of women entrepreneurs. Udyogini was set up to co-ordinate and facilitate management training

for grassroots women's groups for the World Bank Institute-funded Women's Enterprise

Management Training Outreach Program (WEMTOP). This was a three-year participatory action

learning project aimed at strengthening the capacity of intermediary NGOs to deliver

management training to poor women micro entrepreneurs in 1992. The training program

consisted of Grassroots Management Training (GMT) carried out for women producers and the

Training of Enterprise Support Teams (TEST) for the trainers of GMT. The trainings were

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carried out through NGOs who were responsible for group formation and bringing together the

women. NGO staff was trained as trainers or Enterprise Support Teams (ESTs).

The project was based on a package completion approach. It was recognized that training alone

would not be sufficient for promotion of enterprises. A number of other linkages - forward and

backward - would be necessary. However it was thought that the field based NGOs will provide

these other linkages. During the WEMTOP phase, Udyogini worked with 21 Voluntary

Organizations (NGOs) in three states of Orissa, Bihar, and Rajasthan. A total of 130 trainers and

1,077 producer women were trained.

It was exciting that Udyogini was able to train so many women and NGOs that worked with

women. But more was needed—especially as the markets were getting more complex. To remain

strategic and inform its training programs for others, Udyogini needed to work directly at the

grassroots to understand what it takes to take women all the way through from 'mobilization to

market'. So, in 2002, Udyogini began direct implementation at the grassroots. It selected sectors

of the economy in which women were concentrated and in which depth and scale were required

to be demonstrated to make a difference. It selected regions that offered a resource base – skills

or natural resources that were required to be harnessed for enterprise and to empower women. It

selected locations that were challenging and where women were not being supported for micro

enterprise work in any significant measure by government or NGOs.

Udyogini has come a considerable distance since its inception and has acquired critical

knowledge of gender and micro enterprise promotion at the grassroots both through its support

work with partner NGOs and its programs in the field.

SCHEME FOR WOMEN ENTREPRENEURSHIP

In order to alleviate the problems faced by women entrepreneurs, Government of India launched

the scheme Trade Related Entrepreneurship Assistance and Development of Women

(TREAD) in 1998. The scheme envisages development of micro/tiny women enterprises in the

country both in the urban and rural areas. The main objective of the scheme is to empower

women through development of their entrepreneurial skills by eliminating constraints faced by

them in their sphere of trade. A revised scheme of TREAD was launched in May, 2004. It is to

be implemented by Small Industries Development Organisation. It also provides for market

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development and financial loans through NGOs, which are also provided grants for capacity

building. This assistance is to be provided for self-employment ventures by women for pursuing

any kind of non-farm activity.

The non-profit Vital Voices Global Partnership grew out of the U.S. government’s successful

Vital Voices Democracy Initiative. As Vital Voices continues the work of advancing women’s

economic, political and social status around the world, we speak to its CEO and President, Alyse

Nelson, on providing skills, networking and other support to women around the world.

Entrepreneur (E): What was the idea behind starting Vital Voices?

Alyse Nelson (AN): Vital Voices started as a U.S. government initiative in 1997 to look at the

condition of women around the world. We want to bring the voice of women to the decision-

making table, and inculcate the idea of leadership in them. Vital Voices has been continuously

focusing on three major areas—political participation, human rights and economic

empowerment.

Hillary Rodham Clinton, former U.S. first lady, was the founder and we became a non-

governmental bipartisan organization in 2000. By bipartisan, I mean that our organization has no

political party affiliation though we came out of one political party. In terms of administration,

we are completely independent.

When we became a non-profit organization, we felt that there was a real need to support

emerging women leaders through three key means. We first try to connect women leaders and

then build their capacity. Often, the women we work with are very successful and have

tremendous impact on their societies, though they do not have fancy academic degrees under

their belts. We help them by tweaking things a little bit in the areas of marketing, strategy

planning and communications to ensure effective results and help them better identify their

goals. We do give a few grants but for the most part, we invest in people’s human and social

capital, their hard skills and network.

We find that when we are building leaders, if we give them grants then the moment that grant is

over, they have to find another grant. Our concept is “rather than giving a woman a fish, we

teach her how to fish.” Vital Voices has trained and supported 8,000 women in 127 countries till

date.

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E: What do your programs strive to achieve?

AN: We create a long-term investment for the women we support. We support her in building

her connections, capacity and credibility. We believe strongly that we have the right focus. We

have seen again and again that when we invest in emerging women leaders, who may not be the

CEO of a company or the president of her country, these women definitely have the potential to

become someone special some day. Many of these women are social entrepreneurs, forging new

grounds in their countries.

E: Vital Voices does not have offices in the countries it operates in; doesn’t that hamper

your work?

AN: Though we don’t have offices in all the countries we work in, often enthusiastic women

entrepreneurs contact us directly. Many of them learn about us via our alumni members. We

have a very loyal network of alumni who are our best advocates. They have been the head-

hunters in finding the next generation of emerging leaders.

E: What has been your learning from working in India?

AN: We came to India through the NGO SEWA. My key learning has been that while women

are an extraordinary economic, political and social force here, there are many violent acts

committed against them. There are some women who are respected and hold important positions

while women’s human rights are still being violated. This is not unique to just India. However,

the gap could be a little larger here as you do have so many women in leadership positions in the

country.

E: Which is the most critical area where women entrepreneurs need attention?

AN: One of the most critical areas is mentoring, which is an important tool in grooming talent.

Imagine this: You are a woman living in Kolkata and have a small business.

You have never traveled out of India and your network is just your immediate community. All of

a sudden you are mentored by a senior woman executive working in a MNC in U.S.A. or may be

one of the Fortune 500 women like Beth Brooke, the Global Chairperson for Ernst and Young.

Beth enjoys a global network and can ask favors from a huge chain of people. If she mentors the

woman from Kolkata, her world would expand a hundred fold.

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E: What are the qualities a women entrepreneur must have to make the cut for Vital

Voices?

AN: We need a woman with great potential, who shows leadership skills, has the ability to go

beyond the point where she’s standing now and is willing to bring others along with her. After

working here for 15 years, it’s really easy for me to identify which woman will go far if we

mentor her.

As we work in more than 127 countries, our model is not to reinvent. There are women in each

of these countries who are making a real change to their environment and our model is to find

those women and invest in them.

E: Why doesn’t Vital Voices actively take part in financing?

AN: We are not looking at getting more involved in the funding part. First of all, we believe that

we don’t build leaders by giving them money but by making long-term investments that are

never going to change. If you help a woman find her leadership qualities and develop those, then

you can never take that away from her. That is a much greater investment than just funding.

E: What are the major pitfalls that women entrepreneurs face in India?

AN: The major constraint woman entrepreneurs face in India, and elsewhere in the world, is

limited access to capital. Hillary Clinton once said that some of the greatest innovations die at

bank parking lots.

Also, in many other countries women don’t have the right to property, and some of the legal

issues and violence against women also act as barriers. If women do not have equal rights,

support and protection, then their growth will be restricted.

These factors are absolutely necessary to turn women into successful entrepreneurs. Last but not

the least, education plays a very crucial role and there is a huge need to focus on women’s

education.

E: What are your goals and expectations from India?

AN: We would like to bring one of our successful programs to India called the Businesswoman

Network Initiative. It connects businesswomen to mentors, corporate ambassadors and trainers.

To create marketing opportunities, we are trying to develop a special program to support

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business leaders in India by 2011. We definitely realize that special attention has to be given to

India.

©Entrepreneur November 2010 by Entrepreneur Media, Inc. All rights reserved.

The scheme has three components;

(a) To provide assistance to women entrepreneurs through NGOs for non farm entrepreneurial

activity.

(b) To build up capacity of Entrepreneurship Development Institutions like National Institute for

Small Industry Extension & Training (NISIET), Small Industries Service Institutes (SISI), State

level EDIs, etc., by providing financial support in the form of Government of India grant.

(c)  To create entrepreneurship development training facility through NGOs by providing

financial support for conducting training programmes.

MENTORING WOMEN ENTREPRENEURS IN EMERGING MARKETS: LEVERAGING

RELATIONSHIPS, BUILDING CONFIDENCE,

AND CREATING WEALTH

The presence of women around the world driving small and entrepreneurial organizations

has had a tremendous impact on employment and on business environments worldwide (Dianna

Project, 2005). The size and growth of this phenomenon has attracted significant attention from

academics, practitioners and policymakers. By 2003 women were clearly recognized as a driving

force in the US economy, whether measured by the number of businesses owned, the revenues

generated or the number of people employed (Brush et al., 2006). Other countries around the

world report similar numbers emphasizing the importance of these women and the businesses

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they start in a variety of geographies (Diana Project, 2005). Nearly one-third of all the businesses

in the formal economy are women-owned, and women entrepreneurs are expected to be playing

an even larger role in informal sectors (NFWBO, 1999). The presence of women around the

world driving small and entrepreneurial organizations has had a tremendous impact on

employment and on business environments worldwide (Minniti et al., 2005). However, it is still

the gap in the research and dissemination of information about female entrepreneurship. What

country, venture and personal factors influence the growth experiences of women-led

businesses?

While there are a number of studies, identifying women SME success factors have been

carried out in advanced countries (Anna et al., 1999; Chaganti and Parasuraman, 1997; Lerner

and Almor, 2002), economic research on entrepreneurship in transition economies is less

developed and only a few studies have used a rigorous scientific approach (Tkachev and

Kolvereid, 1999). The lack of information on female entrepreneurs is especially apparent.

According to Ylinempåå and Chechurina (2000), Russian women have limited options to achieve

a leading position in industry, politics or other spheres of social production. Those limitations

serve as “push” factors for women to enter the entrepreneurial sector, where starting new,

smaller firms serves the double purpose of both generating additional family income, and

creating an arena for self-fulfilment. Results from cross-cultural studies indicate that women

from Eastern and Central European countries go into business ownership as a means of escaping

unemployment (Lisowska, 1998; Ben-Yoseph and Gundry, 1998). In the movement from a

centralized to a market economy, these women entrepreneurs must adapt and acquire knowledge

and information rapidly. Even as the number of women entrepreneurs worldwide is growing

steadily, the ability to survive and grow will require continual learning on the part of the woman

entrepreneur and her organization.

Research has shown that entrepreneurial learning is critical to the survival and growth

of entrepreneurial businesses, and, as Sullivan (2000) argues, mentors bring added value

interventions that make a difference in the long-term success of these businesses. Mentors may

provide the support entrepreneurs need when it matters most. Mentoring has been studied

largely in the context of the large corporation, and within the framework of career

development, training, and performance. There has not been a significant amount of research

conducted on the role of mentors in the development and growth of entrepreneurial

businesses. Studies have often looked at mentoring and networking together, although these

11

processes may be distinct from one another in the degree of formality, and the frequency and

type of interactions that distinguish mentors and protégés from activities that involve

participation in professional networks.

While contemporary research has shown that women entrepreneurs recognize the

precursors of growth and the importance of activities such as information seeking and planning

to their strategic leadership role, our study seeks to extend previous research by investigating

the influence of mentors on perceptions of entrepreneurial self-efficacy and its relationship to

the performance of women-led firm. Thus, we are investigating the direct and indirect role of

mentors in helping women entrepreneurs in emerging markets to achieve superior

performance.

With their need for knowledge and information about business development and

growth, mentors may be attractive resources to these women. We know that entrepreneurs

learn from a variety of incidents and experiences. Of interest is whether a sample of

entrepreneurs who are new entrants to a market economy can benefit from the presence of

mentors, and develop the confidence they need to make appropriate and effective

entrepreneurial decisions.

CONTEXT OF THE STUDY

The history of modern entrepreneurship in Russia began just over ten years ago, when in

1987 entrepreneurship was legally allowed. Until this, private enterprises were prohibited in the

Soviet Union. By the end of Gorbachev’s presidency of the Soviet Union in 1991, most forms of

private business had become legal (Tkachev and Kolvereid, 1999). Already in 2000, over

891,000 entrepreneurs operated in Russia (Russian SME Resource Centre). Over 25% of the

population of Russia is occupied today in SMEs, which account for 12-15% of GDP of the

country.

During the first years of development towards a market economy, the emerging

entrepreneurial sector in Russia by and large may be characterized by what Ageev et al (1995)

labelled as “speculative” or even “predatory” entrepreneurship. The dominant mode of

entrepreneurship was focusing on creating value and making profit from trade and financial

operations, exploiting weaknesses in the state legislation and taxation system, and even utilizing

illegal or unethical measures (Bezgodov, 1999). However, over the passing decade the situation

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has changed and contemporary entrepreneurship in Russia is oriented towards longitudinal value

and job creation (Ylinenpåå and Chechurina, 2000).

Little is known about entrepreneurship in Russia. Based on the albeit scant previous

research in this area, it is possible to begin to draw a “portrait” of the typical entrepreneur. The

average age of Russian entrepreneurs is between 30-50 years (Turen, 1993). Usually about 70-

80% of entrepreneurs from the samples have high levels of education (Babaeva, 1998). It should

be in kept in mind that almost all research on entrepreneurs previously done in Russia are taken

from the sociological point of view and data are gathered from urban areas. The number of

women among entrepreneurs is between 10% (Turen et al., 1992) and 30%, which is the lowest

share of women among all social groups of the population except the military (Bezgodov, 1999).

Characteristics of entrepreneurs working in small trade marketplaces are different. They are

mostly women (70%), and a huge part of them are either pensioners or students (Babaeva, 1998).

This social group is actually not investigated at all. Some of those marketplace workers are

registered as sole proprietorships, while others are not. In the present study over 90%

respondents are registered as sole proprietorships, which allows us to open the “black box” of

this phenomenon.

Based on previous research it is possible to conclude that most entrepreneurs perceive

external environment as highly unfriendly. High taxes, an inconsistent legislation system, high

dependence of economic life upon political turbulence, and inflation were mentioned as factors

prohibiting business in Russia (Iakovleva, 2001, Ylinenpåå and Chechurina, 2000). Lack of start-

up capital and prevailing business laws and the tax system are particularly challenging for

women’s entrepreneurship in Russia. Other barriers that greatly limit entrepreneurship

development that were mentioned by Russian female entrepreneurs in the Ylinenpåå and

Chachurina study included: high taxes (90% of respondents), inconsistency of laws (81%),

availability of capital (67%), banks’ instability (66%), inflation (66%), corruption (55%), and

criminality (39%). This is quite different from problems of American women entrepreneurs,

who tend to be more concerned about the functional sides of business – profitability of business,

management and growth, and innovation (Babaeva, 1998). Motivation to starting a business

varies, but in comparison with Western studies, Russian women have more tangible motives

such as the search for income or striving for financial rewards. In Ylinenpåå and Chachurina

study, it is explained by the problematic economic situation in Russia where the ambition to

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secure an acceptable standard of living is a high-priority issue. Thus, many of these women may

be characterized as necessity entrepreneurs.

While the profile of Russian entrepreneurs as well as their motivation to start the business

was explored in some studies during the last decade, there is an absence of studies examining the

combination of different factors in attempt to explain performance of Russian SMEs, especially

those headed by women. This study addresses this research gap by testing a model explaining the

performance of women SMEs in Russia.

THEORY

While the performance of new ventures is widely studied (see for example Chandler and

Hanks, 1994; Kolvereid and Shane (1995); Wiklund and Shepherd (2003), Westhead et al

(2005)), there is no consensus regarding the basic constructs that affect a new venture

performance. The personality of the entrepreneur is often perceived by practitioners as one of

the most fascinating topics in the field of entrepreneurship (Delmar, 2000). Some believe that a

successful entrepreneur is a result of the special set of personal abilities and characteristics,

rather than other factors. Often the human capital characteristics of the entrepreneur or of the

members of the founding team provide personal abilities that facilitate small firm growth and

performance (Bird, 1993; Brush and Chaganti, 1997; Chandler and Jansen, 1992; Davidsson,

1989). Human capital theorists argue that breadth of human capital resources will be

associated with higher levels of productivity (Becker, 1993). Human capital can be subdivided to

general human capital and specific human capital. General human capital characteristics, which

include founder’s years or level of education, years of work experience and management

experience, do affect new venture performance (Gimeno et al., 1997; Cooper et al., 1994).

However, the effect those general human capital characteristics have on enterprise

performance also ‘depend on its relative payoff in the venture versus alternative employment’

(Gimeno, 1997, p. 756). Specific human capital is mostly valuable when the context of those

characteristics similar to the new venture context. Business similarity, prior start-ups, years of

previous entrepreneurial experience and role models including mentoring was shown to have

positive effect on performance (Brown, 1990; Cooper et al., 1994; Graham & O’Neill, 1997)

14

.

The Influence of Role Models and Mentors

Social Learning Theory (SLT) proposes that one way learning can occur is vicariously,

through the observation of behaviors in others, referred to as role models (Bandura, 1977, as

cited in Scherer and colleagues, 1989). Adapting the principles of SLT to entrepreneurial role

models in the form of mentors would indicate that individuals having greater exposure to other

entrepreneurs are more likely to engage in entrepreneurial ventures and activities (Schaver and

Scott, 1991). Mentoring in the context of support to novice entrepreneurs has been defined as

a protected relationship between a veteran and a newcomer in which learning and

experimentation can take place, guidance is provided, and new skills can be developed in the

pursuit of personal goals and business success (Brown, 1990; Graham & O’Neill, 1997). In

addition to experienced entrepreneurs, entrepreneurial mentors may also appear in the form

of other family members, employers, teachers, or anyone whom the individual has had an

opportunity to observe (Sexton & Smilor, 1986). Indeed, private sector partnerships for

mentoring have been described as one of the determinants of success in new venture creation

(Lalkaka, 2003). However, Cope and Watts (2000) interestingly caution us to avoid the

assumption that mentoring is the most important form of learning, since experiential learning

in which entrepreneurs learn from their own mistakes as well as successes is very powerful

(Bechard & Toulouse, 1991; Cope & Watts, 2000).

Mentors typically support entrepreneurs as they start and grow their businesses by giving

expert help and assistance in problem solving, influencing behavioral and attitudinal change

(Sullivan, 2000). A mentor’s role can be strategic and developmental, calling attention to

specific events or critical incidents that have occurred in the history of the business and relating

them to the present circumstances, a process Cope and Watts (2000) refers to as “bringing

forward” the experience of the entrepreneur. Gibb (1997) termed this ‘generative’ learning,

described as “reflecting on the vision, performance, and capability of the business and the ways

in which new threats and opportunities impact upon it” (Gibb, 1997: 19). Based on their

involvement in a mentoring program for SMEs developed by Enterprise Ireland that has

produced over 5,000 assignments (Mattacks, 2004), Doyle and O’Neill distinguish mentoring

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entrepreneurs from the mentoring that takes place in the context of larger organizations, in

that it may help reduce feelings of isolation, assist the business in meeting its goals, and help to

fill a knowledge or skill gap (Doyle & O’Neill, 2001). For women, the role of mentors as role

models may be particularly significant. The importance of a role model—someone who has

achieved goals to which they may be aspiring and is a source of strategies for both success and

survival—is critical to the career development of women. This is confirmed by the evaluation

study of the Community Entrepreneurs Program, a training program for women entrepreneurs

in Massachusetts, mentoring was reported as proving useful to program participants, enabling

access to new distribution channels for selling products and services, helping to grow the

business, and helping to generate revenue (Dumas, 2001). Thus our first proposition in this

study would be the following:

Hypothesis 1: Mentoring is positively associated with firm performance.

One More Time: The Role of Self-Efficacy

Theories trying to explain behaviour by individuals perceiving and interpreting the

information around them are cognitive theories. Within behavioural theories, cognitive models

offer the most sophisticated theoretical frame of reference to explain both entrepreneurial

intentions and performance, which incorporates the complexity of entrepreneurial behaviour, and

enables the actual test of the model (Delmar, 2000). The cognitive behavioural models explain

both highly complex behaviour and differences in choices and performance through entrepreneur

competencies. Often competencies of founder are found to be crucial to venture performance

(Brush and Hisrich’s (1991); Lerner et al. (1997)). Those competencies in turn depend upon both

general and specific human capital characteristics. Self-assessed competencies are the core of

individual’s self-efficacy beliefs about their personal “capabilities to mobilize the motivation,

cognitive resources, and courses of action needed to exercise control over events in their lives”

(Wood and Bandura, 1989: 364; Chandler and Hanks, 1994a). The concept of self-efficacy is

concerned with ‘people’s beliefs about their capabilities to produce performance that influence

events affecting their lives’ (Bandura, 1995, p. 434). Perceived self-efficacy has been proposed

as a central concept in entrepreneurship (Boyd and Vozikis, 1994) because it has been proven to

be associated with initiating and persisting in achievement-related behaviours (Wood and

Bandura, 1989). Perceived self-efficacy influences the strategies and performance of

16

entrepreneurs. It was found that entrepreneurs with higher perceived self-efficacy achieve higher

performance (Westerberg, 1998). One of the core entrepreneurial competencies is opportunity

competence – ability to recognize and develop market opportunities through various means.

We continue our examination with the fundamental hypothesis that persons with strong

entrepreneurial characteristics, in particular with high self-efficacy operationalised as

opportunity competence, are more likely to have successful and higher performing ventures than

are entrepreneurs that do not have these characteristics (Covin & Miles, 1999; Stewart, Watson,

Carland & Carland, 1998). Therefore,

Hypothesis 2: Self efficacy is positively related to firm performance.

Determinants of Entrepreneurial Self-Efficacy: The “Role” of Mentors

If, as has been shown, self-efficacy has a significant impact on choice of career path and

firm performance, then it is of interest to explore possible antecedents to self-efficacy. Boyd

Vozikis (1994) proposed that self-efficacy can be enhanced by some human capital variable,

such as previous work experience, entrepreneurial experience and role models. Bandura (1992)

posits that our confidence in our ability to perform certain tasks is developed in four key ways:

“mastery experiences,” “modeling,” “social persuasion,” and “judgments of our own

physiological states.” Research by Scherer et al. (1990) suggests that lower self-efficacy among

women, and their lower intentions for entrepreneurship, stem in part from a paucity of

personal or related experiences which are associated (at least by them) with being successful as

an entrepreneur. In addition, to the extent that mentors are role models, this result may be

due in part to the importance of “modeling” as a way of developing self-efficacy (Bandura,

1992). That is, in addition to the “mastery experiences” described above, self-efficacy can also

be enhanced through social persuasion, or the positive encouragement and feedback that

individuals are given by role models (Cox et al., 2002).

Additionally, many of the functions of the mentor relationship may increase

entrepreneurial self-efficacy, such as sponsorship, coaching, access to challenging work

assignments, and access to important informal social networks through which information and

new opportunities are exchanged (Kram, 1983). These aspects of mentoring have the important

impact of providing a road map to women as they are navigating their careers.

17

Finally, social support theory proposes that the support received from interpersonal

relationships has a positive effect on how a person copes with stress or life change. Individuals

rely on relationships to provide emotional reassurance, needed information, and instrumental

aid (Fisher, 1985). Mentoring has been shown to be a crucial source of social support. The

relationship has been connected to greater feelings of confidence, competence and credibility

(Thomas, 2001). Based on the research, the following propositions are provided:

Hypothesis 3: The greater the degree of mentoring influence, the higher the degree of

entrepreneurial self-efficacy.

Hypothesis 4: The greater the degree of entrepreneurial self-efficacy stemming from

mentoring, the higher the firm performance. That is, self-efficacy will serve as a critical

18

METHODOLOGY

Participants

We sampled 601 Russian women entrepreneurs that are associated with the Russian

Women’s Microfinance Network (RWMN). The mission of the RWMN is to support the

development of sustainable women-focused, locally managed microfinance institutions (MFIs)

throughout Russia by creating an effective financial and technical structure that provides high-

quality services to partner MFIs over the long-term. With assistance from Women's World

Banking (WWB), which has been active in Russian since 1994, several women-led organisations

and local microlending institutions formed RWMN, which was registered as a local non-profit

organization in October 1998. Today RWMN operate in 6 regions in Russia: Kostroma, Tver,

Kaluga, Belgorod, Vidnoe, and Tula with the head office in Moscow. Each division is an

independent local organization that provides micro loans for clients, with no less than 51% of

client’s being women.

After the questionnaire was constructed and pre-tested with the help of 7 Russian women

entrepreneurs that commented on each question, it was sent electronically to Moscow. RWMN

was responsible for printing it out, and distributing to its divisions. Data was collected by the

workers of local divisions during face-to face interviews with respondents. As a result we

received 601 questionnaires. Five of them were removed due to missing data, then the sample

was filtered on two controls – only women should be left (there were 5 male responses) and we

considered only decision-makers (positive answer to the question - are you responsible for the

main decisions taken in the enterprise?). That resulted in 555 questionnaires. Some descriptive

statistics are presented in Table 1 below. The sample mainly consisted of sole proprietorships

with 94% of businesses having no more than 10 employees (and 60% having just 2 employees),

woman-led and woman-owned (95%), operating mainly in the service industry (80%), with 56%

of enterprises being family businesses. One more interesting finding is that only 49% of

respondents have higher education, in comparison to 80% from previous findings (Grichenko et

al., 1992; Kofanova, 1997, Iakovleva 2005). This profile, as expected, differs from the typical

19

Russian SME profile with regard to industry structure, legal form, number of employees and

family business issues (see for example Iakovleva, 2005, Bezgodov , 1999).

While the sample is not representative of the general profile of Russian entrepreneurs, its

particular value is in providing a “portrait” of women-led small enterprises, with its specific

structure. While the governmental efforts focus on stimulating entrepreneurial growth in the

country and especially on women-led enterprises, it is important to understand the specific issues

of such enterprises.

20

Dependent Variable: Firm Performance

Performance is the multidimensional concept. There is little consistency in what is

meant by the term ‘performance’ in different studies. Three different measures are most often

associated with the concept of performance: survival of the firm, firm growth and firm

profitability (Delmar, 2000). It is advised that studies should include the multiple dimensions of

performance and use multiple measures of those dimensions (Murphy et al., 1996). In the

present study only existing firms are considered, and questions related to bough growth and

profitability are applied. A measurement of performance is extremely complex for young and

small firms. Such traditional financial measures as return on investments or net profits are

problematic when studying new ventures, since even successful start-ups often do not rich

profitability for a considerable period of time (Weiss, 1981). Traditional financial measures are

especially unreliable in the Russian context. Due to heavy taxation rates, small enterprises

seldom report true economical results in accounting. The other specific reason of not applying

such direct measures in the Russian context is that Russian statutory accounting norm and

practices differs greatly from international accounting norms and practices. Researchers

interested in the performance of emerging businesses must acquire data that meet the criteria

of relevance, availability, reliability and validity when the only attainable source of data is a self-

administrated evaluative questionnaire (Chandler and Hanks, 1993).

Performance is measured with the help of importance and satisfaction questions on

certain items (see Table 2). Respondents were asked to indicate the degree of importance their

enterprise attaches to the following items over the past three years: sales level, sales growth,

turnover, profitability, net profit, gross profit and to the ability to fund enterprise growth from

profits. Than, they were asked how satisfied they have been with the same indicators over the

past three years. A slightly modified version of questions used by Iakovleva (2005) were

applied. Originally questions were taken partly from Chandler and Hanks (1993) and partly from

Westhead, Ucbasaran, and Wright (2005) and transformed after the consultation with Russian

entrepreneurs. The questionnaire we used for the present study was pre-tested with seven

Russian women business owners, and some questions were reformulated after that. Based on

these 14 questions, the composite performance index was constructed following the principle

used in expectancy theory and later in Theory of Planned Behaviour (Ajzen, 1991). First,

21

importance questions were rescaled from a 7-point Likert scale (1 to 7) to scale (-3 to 3), and

than satisfaction and importance scores were multiplied. After that, principal component

analysis was done, which resulted in one factor which we called performance (α=0,95).

Independent Variables

Mentoring

Mentoring Roles and Functions was measured with a 6-item scale that was adapted

from Scandura, 1992. Table 3 includes the items and functions based on factor analysis results.

Entrepreneurial Self-Efficacy

Entrepreneurial Self-Efficacy was measured using De Noble et al.’s (1999) 6-item self-

efficacy measure that focuses on innovation and product development skills (e.g. “I can

originate new ideas and products”). The internal consistency (Cronbach’s alpha) was .83

RESULTS

Multiple regression analysis was used to test hypotheses (1) and (2). Mediated

regression approach recommended by Baron and Kenny (1986) was used to test our

hypotheses (3) and (4). In this approach, three separate regression equations are estimated.

First, the mediator (self-efficacy) is regressed on the independent variable (mentoring).

Second, the dependent variable (performance) is regressed on the independent variable

(mentoring). In the last equation, the dependent variable (performance) is regressed

simultaneously on both the independent (mentoring) and mediation (self efficacy) variable.

In conducting our analyses, we found support for hypothesis (1). That is, mentoring

(role models) was positively associated with firm performance (see Table 5). In addition, we

also found support for hypothesis 2, such that self efficacy was also positively related to the

firm performance (see Table 6). Moreover, results also revealed support for hypothesis 3 in

that the greater the degree of mentoring influence, the higher the degree of entrepreneurial

22

self-efficacy. However, in our final set of mediated analyses, we found partial support for

hypothesis 2. More specifically, self-efficacy partially mediated the relationship between the

mentoring and firm performance.

“So What?” Implications Based on Our Research

Results from our study suggest that mentoring is an important developmental

relationship for entrepreneurial women, especially for those in emerging and developing

markets. By understanding how mentors and role models support women in these tenacious

positions, we may be better able to create the support systems to nurture and propel women’s

entrepreneurial efforts.

Forthcoming research can build on our study by focusing on differential roles of “expert”

capital versus general social capital in the context of gendered entrepreneurship. Future

research could investigate how general social capital is instrumental to developing networks of

expert capital (or vice-versa). Women entrepreneurs may seek other women more often than

men for information, assistance, encouragement, or moral support (Smeltzer & Fann, 1989).

Yet, most of these resources derive from occupations dominated by males (e.g., banking,

accounting, & legal). The results of previous research regarding expert capital, therefore, beg

the additional question of whether this important form of capital comes more frequently from

men or women experts. All of this additional work has important implications for women

entrepreneurs in the start-up and growth phases of their firms, and especially for those in

emerging and transitioning economies.

Moreover, a challenge for many business owners lies in obtaining the appropriate

assistance and information needed to take the business to the next level of growth (Gundry et al.

2002). Particularly for women in emerging markets such as Russia, access to information and

knowledge is necessary and desired since most of them were raised and educated within a

centralized, planned economy. Additional research should examine how women entrepreneurs

across cultures access and leverage the importance of these resources, including information

seeking and specifically training and education, to further develop and grow their businesses.

Finally, our results hold implications for public policy initiatives, such as entrepreneurial

assistance programs supporting the development of mentoring programs for women

23

entrepreneurs. Thus, the results of our study and building on past work, offer information

pertinent to supporting the overall mission of programs that assist women entrepreneurs.

Mentorship programs provide women entrepreneurs with the opportunity to take what they

learn, apply it to their business strategy and get feedback from women who have been through

the arduous, but highly rewarding, process of starting their own business. These relationships

give women an outlet to test concepts and ideas and learn from the valuable past experience

(both positive and negative) of successful female entrepreneurs. Mentors can give

entrepreneurs a first-hand glance at the complexities of launching and managing a new

venture. This might include advice about the unique challenges faced by women entrepreneurs

such as raising capital, building credibility and forming strategic partnerships. Some

businesswomen may even offer the opportunity to intern or job shadow for an extended period

of time—providing a woman entrepreneur with the unique opportunity of gaining firsthand

experience with a venture in progress and harnessing additional knowledge about the role of a

business owner.

By understanding how mentors and role models support women in these tenacious

positions, we may be better able to create the support systems to nurture and propel women’s

entrepreneurial efforts. This would be immensely useful for women in emerging and

transitioning economies as they seek out, define, and leverage their own networks towards the

sustainability of their businesses, and the creation of wealth for themselves and their broader

local and global communities.

24

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Table 1

Sample Characteristics

Variables Number Percent

Respondents

Respondent status

Founders and/or owners (shareholders) 525 95%

Directors and/or managers (employees) 30 5%

Average respondent age 40 years

Higher education

Yes 252 49

No 271 51

Entrepreneurial experience of relatives

Yes 76 14

No 469 86

Enterprises

Subsidiary of another business

Yes 24 5

No 525 95

Family business

Yes 310 56

No 242 44

Average firm age 8

Average number of employees 4

Limited liability companies 33 6

Closed joint-stock companies 3 0.5

Open joint-stock companies 2 0.4

31

Sole proprietorships 514 93

Manufacturing 28 5

Trade and catering consumption 442 80

Service 81 15

Table 2

PCA for Composite Performance

Variables Factor loadings Communality

Composite Performance

Sales level satisfaction*importance 0,87 0,76

Sales growth satisfaction*importance 0,89 0,80

Turnover satisfaction*importance 0,87 0,75

Profitability satisfaction*importance 0,90 0,81

Net profit satisfaction*importance 0,88 0,78

Gross profit satisfaction*importance 0,88 0,78

Ability to fund business from the profit

satisfaction*importance

0,80 0,64

Eigenvalue 5,31

Percent variance explained 75,85

Chronbach’s alpha 0,95

32

Table 3

PCA for Mentoring

Variables Factor loadings Communality

Mentoring

F14 I exchange confidences with my mentor 0,781 0,611

F13 My mentor gives me special coaching as an

entrepreneur0,763 0,582

F12 I admire my mentor's ability to motivate others 0,752 0,566

F16 My mentor has devoted special time and

consideration to my entrepreneurial career 0,7430,552

F11 My mentor has taken a personal interest in my

entrepreneurial career 0,7070,500

F15 I try to model my behaviour after my mentor's0,684

0,468

Eigenvalue 3,278

Percent variance explained 54,639

Chronbach’s alpha 0,82

Note: Factor loadings 0,3 or smaller are suppressed. KMO =0,835, Bartletts’s test of Sphericity

App. Chi-Sq 498,425; df=15, Sig. 000.

33

Table 4

PCA for Self Efficacy

Variables Factor loadings Communality

Mentoring

G4 Design products or services that solve current

problems,869

0,755

G3 Identify new areas for potential growth ,861 0,741

G6 Bring a product concept to a market in a timely

manner,787

0,619

G2 Discover new ways to improve existing

products/services,779

0,607

G1 See new market opportunities for new

products/services,774

0,600

G5 Create product/services that fulfil customer unmet

needs,739 0,546

Eigenvalue 3,86

Percent variance explained 64,466

Chronbach’s alpha 0,87

Note: Factor loadings 0,3 or smaller are suppressed. KMO =0,858, Bartletts’s test of Sphericity

App. Chi-Sq 1782,433; df=15, Sig. 000.

34

Table 5

Result of MRA of Mentoring on Performance

†<0.1;*<0.05;

**<0.01;

***<0.001.

Table 6

Result of MRA of Self Efficacy on Performance

†<0.1;*<0.05;

**<0.01;

***<0.001.

Table 7

Result of MRA of Mentoring on Self Efficacy

35

St. Beta, listwise Unstd. Beta

Mentoring 0,267*** 0,258***

F 17,588

Adjusted R² 0,067***

Number of cases 232

St. Beta, listwise Unstd. Beta

Self Efficacy 0,361*** 0,365***

F 78,445

Adjusted R² 0,13***

Number of cases 524

†<0.1;*<0.05;

**<0.01;

***<0.001.

Table 8

Results of hierarchical MRA on Performance

Base model Mediated model

St. Beta,

listwise

Unst. Beta,

listwise

St. Beta,

listwise

Unst. Beta,

listwise St. Beta

Mentoring 0,271*** 0,263

Mentoring 0,207** 0,200

Self efficacy 0,279*** 0,289

F 18,189 19,713

Adjusted R² 0,07*** 0,14***

Number of cases 231 231

†<0.1;*<0.05; **<0.01; ***<0.001.

36

St. Beta, listwise Unst. Beta

Mentoring 0,270*** 0,256***

F 18,787

Adjusted R² 0,07***

Number of cases 240

Push-Pull factors and Women in business

Women in business are a recent phenomenon in India. By and large they had confide themselves

to petty business and tiny cottage industries. Women entrepreneurs engaged in business due to

push and pull factors. Which encourage women to have an independent occupation and stands on

their on legs. A sense towards independent decision-making on their life and career is the

motivational factor behind this urge. Saddled with household chores and domestic

responsibilities women want to get independence Under the influence of these factors the women

entrepreneurs choose a profession as a challenge and as an urge to do some thing new. Such

situation is described as pull factors. While in push factors women engaged in business activities

due to family compulsion and the responsibility is thrust upon them.

Problems of Women Entrepreneurs in India

Women in India are faced many problems to get ahead their life in business. A few problems

cane be detailed as;

1. The greatest deterrent to women entrepreneurs is that they are women.  A kind of patriarchal –

male dominant social order is the building block to them in their way towards business success.

Male members think it a big risk financing the ventures run by women.

2. The financial institutions are skeptical about the entrepreneurial abilities of women. The

bankers consider women loonies as higher risk than men loonies. The bankers put unrealistic and

unreasonable securities to get loan to women entrepreneurs. According to a report by the United

Nations Industrial Development Organization (UNIDO), "despite evidence that women's loan

repayment rates are higher than men's, women still face more difficulties in obtaining credit,"

often due to discriminatory attitudes of banks and informal lending groups (UNIDO, 1995b).

3. Entrepreneurs usually require financial assistance of some kind to launch their ventures - be it

a formal bank loan or money from a savings account. Women in developing nations have little

access to funds, due to the fact that they are concentrated in poor rural communities with few

opportunities to borrow money (Starcher, 1996; UNIDO, 1995a). The women entrepreneurs are

37

suffering from inadequate financial resources and working capital.  The women entrepreneurs

lack access to external funds due to their inability to provide tangible security. Very few women

have the tangible property in hand.

4. Women's family obligations also bar them from becoming successful entrepreneurs in both

developed and developing nations. "Having primary responsibility for children, home and older

dependent family members, few women can devote all their time and energies to their business"

(Starcher, 1996, p. 8).The financial institutions discourage women entrepreneurs on the belief

that they can at any time leave their business and become housewives again.  The result is that

they are forced to rely on their own savings, and loan from relatives and family friends.

5. Indian women give more emphasis to family ties and relationships. Married women have to

make a fine balance between business and home. More over the business success is depends on

the support the family members extended to women in the business process and management.

The interest of the family members is a determinant factor in the realization of women folk

business aspirations.

6. Another argument is that women entrepreneurs have low-level management skills. They have

to depend on office staffs and intermediaries, to get things done, especially, the marketing and

sales side of business. Here there is more probability for business fallacies like the intermediaries

take major part of the surplus or profit. Marketing means mobility and confidence in dealing with

the external world, both of which women have been discouraged from developing by social

conditioning. Even when they are otherwise in control of an enterprise, they often depend on

males of the family in this area.

7. The male - female competition is another factor, which develop hurdles to women

entrepreneurs in the business management process. Despite the fact that women entrepreneurs

are good in keeping their service prompt and delivery in time, due to lack of organisational skills

compared to male entrepreneurs women have to face constraints from competition. The

confidence to travel across day and night and even different regions and states are less found in

women compared to male entrepreneurs. This shows the low level freedom of expression and

38

freedom of mobility of the women entrepreneurs. 

8. Knowledge of alternative source of raw materials availability and high negotiation skills are

the basic requirement to run a business.  Getting the raw materials from different souse with

discount prices is the factor that determines the profit margin. Lack of knowledge of availability

of the raw materials and low-level negotiation and bargaining skills are the factors, which affect

women entrepreneur's business adventures.

9. Knowledge of latest technological changes, know how, and education level of the person are

significant factor that affect business. The literacy rate of women in India is found at low level

compared to male population. Many women in developing nations lack the education needed to

spur successful entrepreneurship. They are ignorant of new technologies or unskilled in their use,

and often unable to do research and gain the necessary training (UNIDO, 1995b, p.1). Although

great advances are being made in technology, many women's illiteracy, strucutural difficulties,

and lack of access to technical training prevent the technology from being beneficial or even

available to females ("Women Entrepreneurs in Poorest Countries," 2001). According to The

Economist, this lack of knowledge and the continuing treatment of women as second-class

citizens keeps them in a pervasive cycle of poverty ("The Female Poverty Trap," 2001). The

studies indicates that uneducated women donot have the knowledge of measurement and basic

accounting.

10.  Low-level risk taking attitude is another factor affecting women folk decision to get into

business. Low-level education provides low-level self-confidence and self-reliance to the women

folk to engage in business, which is continuous risk taking and strategic cession making

profession. Investing money, maintaining the operations and ploughing back money for surplus

generation requires high risk taking attitude, courage and confidence. Though the risk tolerance

ability of the women folk in day-to-day life is high compared to male members, while in

business it is found opposite to that.

11.  Achievement motivation of the women folk found less compared to male members.  The low

level of education and confidence leads to low level achievement and advancement motivation

among women folk to engage in business operations and running a business concern.

39

12.  Finally high production cost of some business operations adversely affects the development

of women entrepreneurs. The installation of new machineries during expansion of the productive

capacity and like similar factors dissuades the women entrepreneurs from venturing into new

areas.

How to Develop Women Entrepreneurs?

Right efforts on from all areas are required in the development of women entrepreneurs and their

greater participation in the entrepreneurial activities.  Following efforts can be taken into account

for effective development of women entrepreneurs.

1. Consider women as specific target group for all developmental programmes.

2. Better educational facilities and schemes should be extended to women folk from government

part.

3. Adequate training programme on management skills to be provided to women community.

4. Encourage women's participation in decision-making.

5. Vocational training to be extended to women community that enables them to understand the

production process and production management.

6. Skill development to be done in women's polytechnics and industrial training institutes. Skills

are put to work in training-cum-production workshops.

7. Training on professional competence and leadership skill to be extended to women

entrepreneurs.

8. Training and counselling on a large scale of existing women entrepreneurs to remove

psychological causes like lack of self-confidence and fear of success.

9. Counselling through the aid of committed NGOs, psychologists, managerial experts and

40

technical personnel should be provided to existing and emerging women entrepreneurs.

10. Continuous monitoring and improvement of training programmes.

11. Activities in which women are trained should focus on their marketability and profitability.

12. Making provision of marketing and sales assistance from government part.

13. To encourage more passive women entrepreneurs the Women training programme should be

organised that taught to recognize her own psychological needs and express them.

14. State finance corporations and financing institutions should permit by statute to extend purely

trade related finance to women entrepreneurs.

15.  Women's development corporations have to gain access to open-ended financing.

16.  The financial institutions should provide more working capital assistance both for small

scale venture and large scale ventures.

17. Making provision of micro credit system and enterprise credit system to the women

entrepreneurs at local level.

18. Repeated gender sensitisation programmes should be held to train financiers to treat women

with dignity and respect as persons in their own right.

19. Infrastructure, in the form of industrial plots and sheds, to set up industries is to be provided

by state run agencies.

20. Industrial estates could also provide marketing outlets for the display and sale of products

made by women.

21. A Women Entrepreneur's Guidance Cell set up to handle the various problems of women

entrepreneurs all over the state.

41

22.  District Industries Centres and Single Window Agencies should make use of assisting

women in their trade and business guidance.

23.  Programmes for encouraging entrepreneurship among women are to be extended at local

level.

24. Training in entrepreneurial attitudes should start at the high school level through well-

designed courses, which build confidence through behavioral games.

25. More governmental schemes to motivate women entrepreneurs to engage in small scale and

large-scale business ventures.

26. Involvement of Non Governmental Organisations in women entrepreneurial training

programmes and counselling.

42

IMPEDIMENTS FOR WOMEN ENTREPRENEURSHIP DEVELOPMENT

Several studies around the world have been carried out which throw light on the challenges faced

by women entrepreneurs. Though the three major stages in the entrepreneurial process – of

creating, nurturing and nourishing – are the same for men and women, there are however, in

practice, problems faced by women who are of different dimensions and magnitudes, owing to

social and cultural reasons. The gender discrimination that often prevails at all levels in many

societies impact the sphere of women in industry too, and a cumulative effect of psychological,

social, economic and educational factors act as impediments to women entrepreneurs entering

the mainstream. A study (Cooper, as quoted in Das, 2000) of women entrepreneurs in the

western world, proposed that three factors influence entrepreneurship – antecedent influences

(i.e., background factors such as family influences and genetic factors that affect motivation,

skills and knowledge), the “incubator organization” (i.e., the nature of the organization where the

entrepreneur was employed just prior to starting a business; the skills learned there) and

environmental factors (e.g., economic conditions, access to venture capital and support services,

role models). Research from the rest of the world indicates that women and men differ on some

of the above factors. While several of these challenges are in inherent to many countries, some of

them are more severe in South Asia.

Some of the important barriers faced by women are discussed below.

A. Access to finance

Access to finance is a key issue for women. Accessing credit, particularly for starting an

enterprise, is one of the major constraints faced by women entrepreneurs. Women often have

fewer opportunities than men to gain access to credit for various reasons, including lack of

collateral, an unwillingness to accept household assets as collateral and negative perceptions of

female entrepreneurs by loan officers. In South Asia, women are almost invisible to formal

financial institutions – they receive less than 10 per cent of commercial credits (Mahbub ul Haq

human Development Center, 2000). When women do have access to credit it is often in small

amounts, whether this suits their needs or not. Differential access to credit may of course be a

reflection of differences in the choice of sector, educational level or the amount of loan

requested. However, as sector choice and educational levels tend to be limited or influenced by

gender, one could say that any differential access based on this motive is indirectly caused by

43

gender perceptions. In addition to this, women entrepreneurs in developing countries continue to

suffer from poor overall assets, poor enforcement of financial rights and the existence of unequal

inheritance rights and consequently poor access to community and social resources. Gender-

based obstacles – conventional thinking, cultural and social values, lack of collateral – all

aggravate the difficulties faced by women. High transaction costs, the rigidity of collateral

requirements and heavy paperwork are further impediments to women entrepreneurs

(Charumathi, 1998; Tiwary, Ojha and Pain, 1998; Finnegan and Danielsen, 1997; Shayamalan,

1999).

Women, in particular the less educated ones, also find it more difficult to get financing from

banks because they lack information on how to go about securing a loan. Moreover, bank

managers are often more reluctant to lend to women than to men.

Shehla Akram, “Funds are a major issue for women entrepreneurs”, Daily Times, 30 December

1999, <http://www.dailytimes.com>.

Sometimes, credit may be available for women through several schemes but there are bottlenecks

and gaps, and the multiplicity of schemes is often not adequately listed nor is there networking

among agencies. As a result, clients approaching one institution are sometimes not made aware

of the best option for their requirements (Vishwanathan, 2001). In many countries, women face

unequal inheritance practices and laws, discriminatory laws on ownership of property or access

to bank loans, or discriminatory practices by banks. In the area of guarantees, several

discouraging habits have become ingrained in financial institutions and banks, such as requiring

male members to accompany women entrepreneurs for finalizing projects proposed by women,

as well as almost invariably insisting on guarantees from males in the family (Commonwealth

Secretariat, 2002).

A general lack of experience and exposure also restricts women from venturing out and dealing

with banking institutions. Those who do venture out often find that transaction costs for

accessing credit are high, and cannot be met by the cash available to them. Because of this, they

are dependent on the family members for surety or collateral and hence restrict the money they

borrow. This results in lower investments. Alternately they tend to find working capital at higher

rates of interest. The availability of finance and other facilities, such as industrial sheds and land

for women entrepreneurs are often constrained by restrictions that do not account for practical

realities. All these in turn affect the enterprise and its survival.

44

In one study in India (Kaur and Bawa, 1992), 54 per cent of women entrepreneurs had started

their business with their own personal savings and some financial assistance from their spouse,

23 per cent received finances from their parents, 13 per cent from relatives and friends and only

10 per cent from government agency and nationalized banks. Many other studies in South Asia

have substantiated these findings. Dr Shehla Akram, founder of Women Chambers of Commerce

in Lahore has also identified funds as a major issue of women entrepreneurs, quoting from a

study which showed that most middle-level women entrepreneurs in Pakistan were financed by

their own savings or borrowing from their relatives.4 Another study by Das (2000) shows that

more than 50 per cent of the women used their own funds or funds borrowed from their spouse

or family to set up their business. Though 43 per cent had taken loans from a financial

institution, for a significant proportion (38 per cent) this was only a small part of their original

investment and not the primary source of funds. A study from Pakistan showed that the

predominant source of start-up capital for women entrepreneurs was reported as personal savings

(73 per cent), while informal sources were in second position. Only 4 per cent of respondents had

access to formal sources of credit (Goheer, 2002).

A study from Nepal points out that all formal credit institutions seek tangible collateral for loans,

and that women are effectively sidelined from institutional credit since they have little access to

inherited property (Acharya, 2001).

45

B. Access to markets

The ability to tap into new markets requires expertise, knowledge and contacts. Women often

lack access to training and experience in on how to participate in the market place and are

therefore unable to market goods and services strategically. Thus, women-owned SMEs are often

unable to take on both the production and marketing of their goods. In addition, they have often

not been exposed to the international market, and therefore lack knowledge about what is

internationally acceptable. The high cost of developing new business contacts and relationships

in a new country or market is a big deterrent and obstacle for many SMEs, in particular women-

owned businesses. Women may also fear or face prejudice or sexual harassment, and may be

restricted in their ability to travel to make contacts.

Market liberalization leads to increased competition which demands swifter response to the

market. SMEs thus face competition from transnational corporations as well as from efficient

low wage, low cost producers in other developing countries, and need to engage in active

technology and skill upgrading, and more efficient quality management in order to stay

competitive. This may require fast and easy access to capital, something that women

entrepreneurs often lack. Unfamiliarity with the external world and lack of ease in moving

around in it also hampers women when it comes to dealing with a multiplicity of agencies in

setting up or running a business. Thus, even when they do have professional competence and

training, women are often forced to turn to male professionals for assistance.

C. Access to training

Women have limited access to vocational and technical training in South Asia. In fact, women

on average have less access to education than men, and technical and vocational skills can only

be developed on a strong foundation of basic primary and secondary education. South Asia is

characterized by low enrolment among women in education, high drop out rates and poor quality

of education. The table below shows female literacy levels as a percentage of male literacy as

well as average years of schooling of women and men, respectively. The figures are testifying to

the existence of gender discrimination in building capacity of women and providing them with

equal opportunities.

Source: Mahbub ul Haq Human Development Centre, Human development in South Asia 2003:

The Employment Challenge (Oxford University Press), 2003.

46

Of the already low vocational educational enrolment of less than 2 per cent in South Asia, female

students comprise only a quarter of one per cent. (Mahbub ul Haq Human Development Center,

2000). In Bangladesh, less than 13 per cent of the enterprise development programme trainees

are women (Finnegan, 2000). Even in countries, such as Sri Lanka, where more women than

men have a 10 +12 educational background, gender roles continue to confine women to a narrow

range of economic activity.

Figure 2: Percentage of females enrolled in second level vocational education

010203040PakistanNepalIndiaBangladeshMaldives

Source: Mahbub ul Haq Human Development Centre, Human Development In South Asia: The

Gender Question (Oxford University Press), 2000.

47

Women also tend to be less likely to have had education and experience relevant to starting and

managing a business and thus less potential for success. Gaining relevant skills and knowledge

can also be more difficult for women since they frequently have double work burden and

childcare responsibilities, thus making them less able than men to attend formal and informal

trainings. In addition, gender stereotypes, prejudices of teachers, and gender-based preferences

of parents and girls themselves tend to channel girls and women into the more general and social

rather than scientific or technical areas of education. As a result, women are educationally less

well equipped to manage some kinds of businesses and, in the less developed countries with low

overall levels of education, often less well equipped to manage business in the formal sector in

general. Such disadvantages affect their capacity to access formal sources of credit, technical

support as well as government small business programmes. When training is available, women

may be unable to access it because it is held at a time when they are meeting family

responsibilities, or the content and method of delivery may not be appropriate. This lack of

access to education and training opportunities mean that women start their businesses without

adequate skills. Besides, most technical trainings that are offered to girls at the post-school

levels, in the women polytechnic for instance are limited to traditional careers, such as secretarial

practice, dress designing, etc. Thus, the exclusivity of training acts as limiting factor itself.

D. Access to networks

Women have fewer business contacts, less knowledge of how to deal with the governmental

bureaucracy and less bargaining power, all of which further limit their growth. Since most

women entrepreneurs operate on a small scale, and are generally not members of professional

organizations or part of other networks, they often find it difficult to access information. Most

existing networks are male dominated and sometimes not particularly welcoming to women but

prefer to be exclusive. Even when a woman does venture into these networks, her task is often

difficult because most network activities take place after regular working hours. There are hardly

any women-only or women-majority networks where a woman could enter, gain confidence and

move further. Lack of networks also deprives women of awareness and exposure to good role

models. Few women are invited to join trade missions or delegations, due to the combined

invisibility of women-dominated sectors or subsectors and of women as individuals within any

given sector. As an example of this, at a recent SME Trade Fair in a country in Asia where it has

been estimated than women operate around half of all SMEs, less than 20 women were registered

among the approximately 250 participants, and most of those were civil servants rather than

48

businesswomen. Women’s businesses are not well represented in industry, trade or business

associations. Both the leadership and the membership of chambers of commerce, business,

traders and industry associations tend to be dominated by men, and few women join or reach

leadership positions in the mainstream business organizations. Although partly a reflection of the

low number of women entrepreneurs, it means that the different needs of women entrepreneurs

do not feed into policymaking through the lobbying and other activities of these organizations.

Many specialist organizations of businesswomen often do not counter this situation because their

activities tend to be oriented toward charity and social work, in contrast to the business

networking and policy lobbying orientation of the “mainstream” but more male-dominated

organizations. Part of the reason for women’s organizational invisibility is the difficulty of

finding sufficient time to attend meetings as well as manage their families

49

E. Access to policymakers

Most women have little access to policymakers or representation on policymaking bodies. Large

companies and men can more easily influence policy and have access to policymakers, who are

seen more as their peers. Women tend not to belong to, and even less reach leadership positions

in, mainstream business organizations, limiting their input into policymaking through lobbying.

Women’s lack of access to information also limits their knowledgeable input into policymaking.

Table 4 below provides an overview of challenges discussed above, showing both the challenges

faced by SMEs in general but which can pose a greater obstacle for women than for men

(women intensive) and those faced by women only (women exclusive).

Table 4: Competing in international markets: the challenges faced by

women-owned SMEs Challenges faced by SMEs

(women intensive)

Challenges faced by women-owned

SMEs (women exclusive)

Access to Finance

_ Service companies face difficulties due to the nature of

their businesses.

_ Cost of capital relative to other countries.

_ Discriminatory national laws

_ Prejudice against women and women-

owned businesses

_ Difficulty in providing collateral

(women do not own assets in their own

right)

_ Lack of credit / banking history (due to

past, informal nature of businesses)

_ Need for credit plus business planning

and advisory services

Access to Markets

_ Access to quality, up-to-date information

_ Contacts through personal networks

_ Small size of businesses

_ Prejudice against women

_ Difficulty in travelling to make contacts

_ Sexual harassment

50

Women’s Entrepreneurship: Issues and Policies

Women’s entrepreneurship needs to be studied separately for two main reasons. The

first reason is that women’s entrepreneurship has been recognised during the last decade as an

important untapped source of economic growth. Women entrepreneurs create new jobs for

themselves and others and by being different also provide society with different solutions to

management, organisation and business problems as well as to the exploitation of entrepreneurial

opportunities. However, they still represent a minority of all entrepreneurs. Thus there exists a

market failure discriminating against women’s possibility to become entrepreneurs and their

possibility to become successful entrepreneurs. This market failure needs to be addressed by

policy makers so that the economic potential of this group can be fully utilised. While without a

doubt the economic impact of women is substantial, we still lack a reliable picture describing in

detail that specific impact. Recent efforts initiated by the OECD (1997, 2000) are responses to

this lack of knowledge and have focused the attention of policy makers and researchers on this

important topic.

The second reason is that the topic of women in entrepreneurship has been largely neglected both

in society in general and in the social sciences. Not only have women lower participation rates in

entrepreneurship than men but they also generally choose to start and manage firms in different

industries than men tend to do. The industries (primarily retail, education and other service

industries) chosen by women are often perceived as being less important to economic

development and growth than high-technology and manufacturing. Furthermore, mainstream

research, policies and programmes tend to be “men streamed” and too often do not take into

account the specific needs of women entrepreneurs and would-be women entrepreneurs. As a

consequence, equal opportunity between men and women from the perspective of

entrepreneurship is still not a reality. In order for policy makers to address the situation the report

makes a number of recommendations.

51

Key policy recommendations

Increase the ability of women to participate in the labour force by ensuring the

availability of affordable child care and equal treatment in the work place. More

generally, improving the position of women in society and promoting entrepreneurship

generally will have benefits in terms of women’s entrepreneurship.

Listen to the voice of women entrepreneurs. The creation of government offices of

women's business ownership is one way to facilitate this. Such offices could have

programme responsibilities such as providing women's business centers, organizing

information seminars and meetings and/or providing web-based information to those

wanting to start and grow a business.

Incorporate a women's entrepreneurial dimension in the formation of all SME-

related policies. This can be done by ensuring that the impact on women's

entrepreneurship is taken into account at the design stage.

Promote the development of women entrepreneur networks. These are major

sources of knowledge about women’s entrepreneurship and valuable tools for its

development and promotion. Co-operation and partnerships between national and

international networks can facilitate entrepreneurial endeavors by women in a global

economy.

Periodically evaluate the impact of any SME-related policies on the success of

women-owned businesses and the extent to which such businesses take advantage

of them. The objective should be to identify ways to improve the effectiveness of those

that should be retained. Good practices that are identified in this way should be

disseminated and shared internationally.

52

BACKGROUND

Women’s entrepreneurship needs to be studied separately for two main reasons. The first reason

is that women’s entrepreneurship has been recognised during the last decade as an important

untapped source of economic growth. Women entrepreneurs create new jobs for themselves and

others and by being different also provide society with different solutions to management,

organisation and business problems as well as to the exploitation of entrepreneurial

opportunities. However, they still represent a minority of all entrepreneurs. Thus there exists a

market failure discriminating against women’s possibility to become entrepreneurs and their

possibility to become successful entrepreneurs. This market failure needs to be addressed by

policy makers so that the economic potential of this group can be fully utilised.

While without a doubt the economic impact of women is substantial, we still lack a

reliable picture, describing in detail that specific impact. Recent efforts initiated by the OECD

(1997, 2000) are responses to this lack of knowledge and have focused the attention of policy

makers and researchers on this important topic. In order to effectively and efficiently address this

topic, policy makers need more knowledge about women entrepreneurs. The aim of this report is

to extend these efforts and to further enhance knowledge about how women’s entrepreneurship

affects economic growth and development.

The second reason is that the topic of women in entrepreneurship has been largely

neglected both in society in general and in the social sciences (Brush & Hisrich, 1999; Holmquist

& Sundin, 2002). Not only have women lower participation rate in entrepreneurship than men

but they also generally choose to start and manage firms in different industries than men tend to

do (Duchénaut, 1997; Franco & Winqvist, 2002; Reynolds & White, 1997). The industries

(primarily retail, education and other service industries) chosen by women are often or have until

recently been perceived as being less important to economic development and growth than high-

technology and manufacturing. Furthermore, mainstream research, policies and programmes tend

to be “men streamed” and too often do not take into account the specific needs of women

entrepreneurs and would-be women entrepreneurs. As a consequence, equal opportunity between

men and women from the perspective of entrepreneurship is still not a reality. To facilitate

progress, more work needs to be done in order to:

53

Better understand the function of women’s entrepreneurship in society and

for economic development. We know that women entrepreneurs play a non-

trivial role in the economy, that they face challenges and obstacles different

from those faced by men and that they will act differently. The larger the

difference is between men and women in a society, the larger we can expect the

difference to be between men and women entrepreneurs and the more different

we can expect their relative contribution to economic development to be.

Better understand the impact of women’s entrepreneurship in different

economic contexts. By contexts we mean both the economic level of

development and the societal level of development when it comes to the role of

women in society.

54

Conclusion

Independence brought promise of equality of opportunity in all sphere to the Indian women and

laws guaranteeing for their equal rights of participation in political process and equal

opportunities and rights in education and employment were enacted. But unfortunately, the

government sponsored development activities have benefited only a small section of women.

The large majority of them are still unaffected by change and development activities have

benefited only a small section of women i.e. the urban middle class women. The large majority

of them are still unaffected by change and development. The reasons are well sighted in the

discussion part of this article. It is hoped that the suggestions forwarded in the article will help

the entrepreneurs in particular and policy-planners in general to look into this problem and

develop better schemes, developmental programmes and opportunities to the women folk to

enter into more entrepreneurial ventures. This article here tries to recollect some of the

successful women entrepreneurs like Ekta Kapoor, Creative Director, Balaji Telefilms, Kiran

Mazumdar Shaw, CEO, Biocon, Shahnaz Husain and Vimalben M Pawale, Ex President, Sri

Mahila Griha Udyog Lijjat Papad (SMGULP).

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