PROBLEMS OF WOMEN ENTREPRENEURSHIP IN MICRO, SMALL

PROBLEMS OF WOMEN ENTREPRENEURSHIP IN MICRO, SMALL

& MEDIUM ENTERPRISES IN INDIA: AN ANALYSIS

Kousik Dari Assistant professor, Department of Commerce, Nabagram Hiralal Paul College, University of Calcutta, West

Bengal, India

Abstract

Micro, Small and Medium Enterprises (MSMEs) play a vital role for the growth of Indian economy

by contributing 50% of industrial output, 40% of exports, employing 120 million people in India,

create 11.10 crores jobs every year and produce more than 8000 quality products for the Indian and

international markets. But in the globalised world, Women owners are playing a vital role and they

have become an integral part of the global quest for the sustained economic development and social

progress. Entrepreneurship among Women is relatively recent phenomenon. Women

Entrepreneurship is gaining importance in India. In the India, more and more Women are taking up

entrepreneurial activity especially in (MSMEs).Women owners captured 13.72% of MSME sector as

a whole and the percentage distribution of enterprises in Micro (14.19), in small (5.06) and Medium

(4.21) both are in rural and urban areas. At the same time Women entrepreneurs are facing problems

like shortage of finance, marketing, stiff competition etc. For the said problems government of India

takes necessary steps to remove it by way of giving training programmes, make aware of the

schemes and plans of government, making provision of micro credit and providing special relief

announced by the Govt. of India in first tranche of economic package on May 13, 2020 during

COVID 19 etc. This paper primarily focuses on the problems faced by Women entrepreneurs in the

business environment.

Keywords: Entrepreneurship, MSMEs, Women Ownership;

JEL Classification: L26, G21, P31;

Wutan Huatan Jisuan Jishu

Volume XVI, Issue XII, December/2020

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1. Introduction:

MSMEs are complementary to large industries as ancillary units and this sector contributes

enormously to the socio-economic development of the country. There is a consistent and continuous

growth of MSMEs in our country. MSMEs have increased from about 80,000 units in the 1940s to

more than 633.88 lakhs units till 2019-20.The MSMEs produce more than 7,500 products and the

MSME sector contributes to 45% of India‟s total Industrial Employment, 50% of India‟s total

Exports and 95% of all industrial units of the country.

MSME in India has the potential to increase the share of contribution to GDP from the current 8% to

about 15% by the year 2020. The MSME sector in India is highly heterogeneous in terms of the size

of the enterprises, variety of products and services produced and the levels of technology employed.

As per the estimates of 4th

All-India Census of MSMEs (2006-07), the number of enterprises is

estimated to be about 26 million and provide employment to an estimated 60 million persons. Of the

26 million MSMEs, only 1.5 million are in the registered segment while the remaining 24.5 million

(94%) are in the unregistered segment. The sector is dominated by micro units, of the total working

enterprises, the proportion of micro, small and medium enterprises were 95.05%, 4.74% and 0.21%

respectively.

According to final report of MSME fourth All India Census, MSME is an important sector and plays

a critical role and has an important place in the Indian economy, in terms of employment Generation,

exports and economic empowerment. For the year 2011-12, total number of enterprises in the MSME

sector is 261.12 lakh of which 15.64 lakh are registered. 14.85 lakh enterprises are registered in the

micro sector, 0.76 lakh in the small scale sector and 0.03 lakh in the medium sector. Out of total,

28.60% enterprises belong to the manufacturing sector and 71.40% belong to the services and repairs

and maintenance. It provides employment to 1109.09 lakh persons in the country. The sector has

registered gross output of Rs.7,07,57 crore. Total number of exporting units from the country was

49.81% in the year 2019-20 (till December 2019) as per the data from Directorate General of

Commercial Intelligence & Statistics (DGCI&S) .

Entrepreneurship among Women is relatively recent phenomenon. In modern India, more and more

Women are taking up entrepreneurial activity especially in Micro, Small and Medium enterprises

(MSMEs). The Women MSMEs sector in India has a pivotal role to play in the socio-economic

development of the country. Women in India constitute about 50 percent of the country‟s population.

Hence, Women are regarded as the „better half of the society‟. In earlier days, While Women

entrepreneurs create new jobs for themselves and also for others they faced several types of problems



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like shortage of finance, marketing problem, scarcity of raw materials, high competition in market,

family conflicts, lack of education, low risk bearing ability, male dominated society, little bit

knowledge of business administration, socio cultural barriers, exposed to the training programs and

lack of confidence in their strength and competence etc.

2. Review of Literature:

Alit Sen Guptha (2012) says that the paper tries to focus on the Women entrepreneur development

prospects. The survey and the study brought to light the capacity of the Women who came forward

with the ability to use the unutilized resource. The sample survey of the various districts clarifies that

though immense prospect prevail and the zeal of the Women to start something new has been

crushed down with the ongoing problem prevailing in the area. The objective of the study was to

explore the hidden prospect of Women Entrepreneurship and to find technique to up lift anxiety for

leadership in Women while tracking to reach the expected objective the methodology so adopted was

a sample convenient method for various districts.

Bharathi & Reddy (2013) examined that in order to improve the status of Women Entrepreneurship

in rural area, the Govt. need to take an initiative in providing a facilitative environment for rural

Women entrepreneurs. It also aims to explore the present status of Women entrepreneurs regarding

their socio economic background, problems faced by them in seeking to create new ventures,

motivational factors and available finance for them in Kadapa district, A.P.

Deepti Pachauri (2012) attempt study that based on the emergence of Women Entrepreneurship

making significant impact in all segments of economy and the problems faced by them in setting up

and running their enterprise. The study was conducted in various training centers of KVIC, MSME

to collect the data and no. of Women entrepreneur trainees‟. The study was based on secondary data

collected from various training institutes, SSI office and financial banks which provide financial

assistance. Women entrepreneurs are having innovative thinking and foresightedness yet proper

planning and execution is required at all levels. A majority of Women entrepreneurs are from middle

class families have low technical education but desire to become entrepreneurs. The literacy and

educational status of Women improved considerably during the past few decades. At this juncture

effective steps are needed to provide entrepreneurial orientation and skill awareness to Women.

Goyal and Parkash (2011) opined that the educated Indian Women have to go a long way to

achieve equal rights and position because traditions are deep rooted in Indian society where the

sociological set up has been a male dominated one.

Jyothi Bahl (2012) expressed that the Entrepreneurship has gained greater significance at global

level under changing economic scenario. After independence, several Entrepreneurship development



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programs have been started to develop the skill, knowledge, and competence among the

entrepreneur. In spite of various Entrepreneurship development programmes launched by the Govt.

and non-government agencies, the entrepreneurs are encountering a number of problems for

establishing economically viable small- scale units. Women contribute significantly to the running of

family businesses mostly in the form of unpaid effort and skills. Rural Entrepreneurship is the

answer to removal of rural poverty in India. The problem is that most of the rural youth do not think

of Entrepreneurship as the career option. Therefore, the rural youth need to be motivated to take up

Entrepreneurship as a career, with training and sustaining support systems providing all necessary

assistance.

3. Objective of the Study:

The present paper primarily aims at focusing on the different problems faced by Women in micro

small and medium enterprises (MSMEs) in India. More specifically it highlights on the

1. Present position of MSMEs in India.

2. Factors influencing in Women enterprises.

3. Recommending some suggestion for further development.

4. Database and Methodology:

Methodology followed in present study is predominantly an analytical one. Data of the present study

have been collected from secondary source like published reports of Reserve Bank of India, annuals

reports of MSMEs, census survey, newspapers, journals, and books etc.

5. Women MSMEs in India:

First of all we have to understand the definition of MSMEs which was given by MSMED act 2006 is

given below:

Classification Manufacturing Enterprises Service Enterprises

Micro Rs. 2.5 million/ Rs. 25 lakh Rs. 1 million/ Rs. 10 lakh

Small Rs. 50 million/ Rs. 5 crore Rs. 20 million / Rs. 2 crore

Medium Rs. 100 million / Rs. 10 crore Rs. 50 million / Rs. 5 crore

Source: Ministry of MSME

5.1 Concept of Women Entrepreneurship:

Women entrepreneurs may be defined as the Women or a group of Women who initiate, organize

and operate a business enterprise.



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According to the Government of India is defined as “an enterprise owned and controlled by a

woman having a minimum financial interest of 51 percent of the capital and giving at least 51

percent of the employment generated in the enterprise to Women”. Women entrepreneurs engaged in

business due to push and pull factors which encourage Women to stand on their on legs. Under the

influence of these factors the Women entrepreneurs choose a profession as a challenge and as want

to do something new. Such a 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.

According to Joseph A Schumpeter Women entrepreneurs may be defined as “a Women or group

of Women who innovate, initiate or adopt a business activity”.

6. Factors Influencing Women Entrepreneurs:

Source: Vijayakumar, T & Naresh, B (2013)

Setting up an enterprise is not an easy job for Women entrepreneurs and at the same time running the

enterprise is a greater task. A challenge is always there for these Women entrepreneurs to run their

enterprise successfully earning profit and ensuring the growth of the enterprises which will severely

test their entrepreneurial skill and survival of the unit. Despite various odds against them, several

Women are off to run their own enterprises. Even though there has been a considerable increased in

the number of Women entering in entrepreneurial activity, they are being introduced to many

constraints and difficulties with regard to control and decision making, social status and enthusiasm

in the product or serviced in which they are dealing. It is found that Women are entering more in this

Factors influencing

Women

Entrepreneurs

Achievement of

excellence

Building

confidence

Developing risk

taking ability

Greater freedom

and mobility

Equal status in

society

Motivation

Establishing their

own identity

Establishing

their own

creative idea

Economic

independence



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venture as compared to man to start their own business to make social contribution in addition to

desire of exploring their inner self and fulfilling their means of livelihood.

Women constitute 50 per cent of the total population of India. In spite of it, Women are still lagging

behind men in several aspects. Over the years, the literacy rate of Women and employment

opportunities are being increased by leaps and bounds. Moreover, of late, they are actively engaging

in several activities apart from employment. Women are involving and entering into business and

establishing different types of industries. The Government of Indian have been encouraging Women

to take up industrial establishments. Several financial corporations are funding for establishment of

industries. The policy makers, and administrators in India have for long recognized, the important

role that Micro, Small and Medium Enterprises play in the national economy, therefore the Central

and State Governments have taken over the years active steps to promote and foster their growth. But

these measures have not been particularly effective. Today, these enterprises continue to suffer from

innumerable problems and facing several difficult challenges which hinder their performance and

growth. Many of the problems of finance, marketing, production, distribution and infrastructure still

continue to afflict the MSME sector. While some of them are more or less common to a wide range

of small enterprises all over the country. In this paper the problems and challenges faced by the

Women entrepreneurs/ enterprises are in detailed.

Table 1: Women enterprises out of Total Enterprises Particulars % of Share

Total Enterprise (Lakh)

15.53

Women Enterprise (Lakh)

2.15

Percentage share of Women (%)

13.72

Source: Fourth Census Report on SSI Sector, (2007-08)

The above Table 1 shows that Total Enterprise 15.53 lakh where as number of Women enterprise in

India is 2.15 lakh with a percentage of 13.72 in MSME sector.

Table 2: Area wise Distribution of Female Enterprises Particulars Female Male

Rural 15.27 84.73

Urban 12.45 87.55

All 13.72 86.28

Source: MSMEs Census Report Fourth (2007-08)

Table 2 depicts the area wise distribution that there is male dominance in ownership of MSMEs.

However Female enterprises contribute 13.72 percent in the MSME Sector. The above table shows



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the percentage of female enterprise in SMEs in India. It is evident from the table that the Percentage

of Rural female SMEs (15.27%) is more than the urban areas (12.45%).

Table 3: Sector Wise Distribution of Female Enterprises Particulars Female Male

Micro 14.19 85.81

Small 5.06 94.94

Medium 4.21 95.79

All 13.72 86.28

Source: MSMEs Census Report Fourth (2007-08)

Table 3 depicts the sector wise distribution of female Enterprises in micro, small and medium scale

enterprises. Micro enterprises are the major contributor in case of female enterprises which account

for 14.19%. Whereas in case of medium enterprises it account for 4.21% where as small enterprises

contribute to 5.06%. The overall contribution is 13.72% by female enterprises as against 86.28% by

male enterprises.

Sector Wise Distribution of Female Enterprises by a Pie chart represented as below

Source: Prepared by Researcher

7. Problems of Women Entrepreneurship:

The basic problem of Women entrepreneurs is that they are Women. In many developing countries

like India marriage is treated as the only carrier for Women. Despite the constitutional and legal

equality, Women suffer from male domination. Some of the specific problems faced by the Women

entrepreneurs in India are as follows:

I. Shortage of Finance: Finance is the life-blood of an enterprise. It is prerequisite for

accelerating the process of industrial development. However, Women entrepreneurs always

suffer from inadequate finance and working capital. Women entrepreneurs are not able to



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have access for external finance. An important reason that makes banks reluctant to provide

loans is the inability of the Women entrepreneurs to provide collaterals. The complicated

procedure of bank loans also creates lot of problems in getting the required finance.

Obtaining the support of bankers, lack of credit resources and managing the working capital

are the problems that still remain in the males‟ domain.

II. Marketing Problems: Women entrepreneurs often largely depend upon middlemen for

marketing their products who pocket large amount of profit. The middlemen exploit the

Women entrepreneurs. Many Women entrepreneurs find it difficult to capture the market and

make their products popular. It is one of the core problems as this area is mainly dominated

by men.

III. Scarcity of Raw Materials: The scarcity of required raw materials is the major problem

faced by Women entrepreneurs. They find it difficult to procure the required raw materials

and other essential inputs for production in sufficient quantity and quality, because the prices

of raw materials are quite high and fluctuate.

IV. Stiff Competition: Many of the Women enterprises have imperfect organizational set-up.

Thus, Women entrepreneurs have to face a stiff competition for marketing their products

from both organized sector and male entrepreneurs having vast experience.

V. Family Conflicts: In India, it is mainly a woman‟s duty to look after the children and other

members of the family. A married woman entrepreneur has to strike a fine balance between

her business and family. The woman entrepreneur cannot succeed without the support and

approval of husband and family. Women also face the conflict of performing home role as

they are not available to spend enough time with their family members. Women

entrepreneurs spend long hours in business. As a result, Women entrepreneurs find it

difficult to meet the demands of their family members and society as well. Their inability to

attend domestic work, personal hobbies, entertainment and time for education of children

adds to their conflicts.

VI. Lack of Education: In India, most of the Women are still illiterate. Illiteracy is the cause of

socio-economic problems. Due to lack of education, Women are not aware of business,

market knowledge and technology. Thus, lack of education creates problems for Women in

the setting up and running of business enterprises.

VII. Male Dominated Society: Our society is still male-dominated and Women are not treated on par with

men. The Constitution of India speaks of equality between men and Women. However, in practice

Women are looked upon as weak and dependent on men. This in turn, serves as a problem to Women

entry into business.



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VIII. Low Risk-bearing Ability: Women in India led a protected life. Women are less educated and

economically not self-reliant. All these decrease their ability to bear risk involved in running an

enterprise. Risk bearing is an important requisite of a successful entrepreneur.

IX. Lack of Information and Assistance: Another significant need of many Women business owners is

obtaining the appropriate assistance and information needed to take the business to the next level of

growth. In a study conducted to gather information needs of Women entrepreneurs, those who were

just starting their ventures, requested assistance and training in implementing the business idea,

identifying initial sources of financing, and advertising/promotion.

X. Lack of Infrastructure and Widespread Corruption: These are also the other problems for the

rural Women entrepreneurs. They have to depend on office staffs and intermediaries to get the things

done, especially the marketing and sales side of business. Here is the more probability for business

fallacies like the intermediaries take major part of the surplus or professional dependence. Rural

Women lack training and advisory services on managerial and technical skills to solve production

problems. Here more than 70 percent of enterprises are micro- and small enterprises but their growth

and the competitiveness is greatly challenged by a lack of business management, marketing and

technical skills besides the overall weak infrastructure and complicated legal frameworks for

business processes, especially in global online transaction context.

Source: Prepared by Researcher

Stiff

Competition

Lack of

Infrastructur

e

Family

Conflict

Lack of

Information

and Assistance

Low Risk

Bearing ability

Scarcity of Raw

Material

Marketing

Problem

Male Dominated

society

Lack of

Education

Shortage of

Finance

Problems of

Women

Entrepreneurship



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8. Conclusion and Recommendations:

Women entrepreneurs are contributing a lot in rural development and growth of economic but their

potential is still untapped. The following efforts can be taken into account for effective development

of Women entrepreneurs:

There are various schemes and plans of government for the encouragement of Women

entrepreneurs but on ground level their execution is poor, there should be a strong monitoring

of these policies at different levels of execution.

Government should organize training programmes to develop skills, professional

competencies, leadership, and information of marketing and financial at village level.

Vocational training to be extended to Women community that enables them to understand the

production process and production management.

Information should flow in right direction with the help of NGO„s and government

organizations to about policies, plans and strategies on the development of Women in the

field of industry, trade and commerce.

Making provisions of marketing and sales assistance from Government part.

Making provisions of micro credit system and enterprise credit system to the Women

entrepreneurs

Women generally hesitate in going through the procedural formalities in extending loans

imposed by the banks. They face problems in preparing project reports and completion of

other paper work. The banks should simplify the application forms for Women entrepreneurs.

COVID-19 special relief announced by the Govt. of India in first tranche of economic

package on May 13, 2020, Collateral free loan of INR 3 trillion for 4.5 million units, debt

provision of INR 200 billion (US$2.65 billion) has been announced for 200,000 MSMEs,

Equity infusion worth INR 500 billion, A reduction of 25 percent on the Tax Deducted at

Source (TDS) and Tax Collected at Source (TCS) from May 14, 2020 to March 31, 2021 &

extended the date of income tax filling return from July 31, 2020 to December 31, 2020.

The MSMEs in India face a tough situation due to extreme competition from large industries due to

withdrawal of subsidy, lack of infrastructure, anti dumping policy, challenges on product

standardization, total quality management etc. Though Globalization has increased competitiveness

in Indian MSMEs to certain extent, still Indian MSMEs are not adequately prepared to compete with



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the global players. There has been a definite change in attitude of the Govt. from protection to

promotion of the MSMEs. The Govt. has taken several policy initiatives but needs to ensure proper

co-ordination and implementation of such schemes. The MSMEs must convert the threats of

globalization into opportunities through increased productivity, product diversification, supply chain

management, Research and Development activities.

Women Entrepreneurship plays a key role in industrial development. Empowering Women

entrepreneurs is essential for achieving the goals of sustainable development. Today with the growth

of MSMEs, many Women have entered into Entrepreneurship. The Government of India has come

forward with many schemes, concessions and incentives exclusively for Women entrepreneurs. But

in spite of these, Women entrepreneurs have to fulfill their multiple roles as mother, wife and

business Women. Women entrepreneurs face many problems in their efforts to develop their

enterprise. Therefore, Women entrepreneurs need encouragement and support from the family

members, Government, society and male counterparts. Finally, if all forms of gender discrimination

and bias can be eliminated from the society as a whole, then it will allow Women to be an

entrepreneur on par with men.

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PROBLEMS OF WOMEN ENTREPRENEURSHIP IN MICRO, SMALL