Acclaimed author Ayn Rand once famously remarked: “The question isn't who is going to let me; it's who is going to stop me.” Globally it is being recognised that women entrepreneurial activity is a key to sustainable growth and development. Women-owned businesses have been sources of innovation, employment and wealth creation. Remunerative opportunities in national development, improves the ability of women to fight poverty, improve their and their families’ quality of life, literacy and life expectancy. A Gender Gap Report from World Economic Forum establishes that by restrictive opportunities to women the Asia-Pacific region is losing between $42 billion and $46 billion every year. Thus, empowering half of the potential workforce has the potential to yield significant economic benefits which go beyond promoting gender equality. Today, women entrepreneurs are a force to reckon with and policy makers cannot afford to and should not ignore this potential.
In the Female Entrepreneurship Index (FEI) 2015 produced by The Global Entrepreneurship and Development Institute, which ranked 77 countries globally, US, Australia and UK occupy the top 3 positions, while the lower spectrum of the index is dominated by developing countries from the south Asian and sub-Saharan regions, with India ranking an abysmal 70. The results are not surprising. What is surprising though is that despite global recognition of women entrepreneurship potential to national growth and development, progress is slow in removing obstacles that restrict women entrepreneurial activity.
Many have argued that an entrepreneur is an entrepreneur and, therefore, women entrepreneurship does not merit separate inquiry. This appears to be a very naïve outlook. Much of the entrepreneurship research in the past was based on samples of male entrepreneurs. Research is beginning to recognise this bias and has postulated that while there are many common challenges faced by both male and female entrepreneurs, women entrepreneurs are more often than not subject to challenges that are specific to their gender.
Access to money, market and management skills have often been cited as essential building blocks for any entrepreneurial activity. According to FEI (2015), access to first tier finance and labor force parity are two significant weaknesses areas for the south Asian region. When discussing women entrepreneurship the institutional, legal and socio-cultural environment is as important a building block, if not more, as the others. Here are some:
Access to credit
Accessing credit has probably been difficult for all entrepreneurs. When accessing financing, through financial institutions, usually entrepreneurs need to pledge some immovable property as collateral. But in most families, few women own property limiting their access to finance. In an effort to encourage people to purchase property in a woman’s name, some States governments offer a reduced property registration fees in such instances.
The Ministry of Micro Small and Medium Enterprises runs micro credit programs through NABARD in the agriculture field and through SIDBI in the field of industry, services and business. A ‘women’s component’ is also earmarked in various development schemes of the government. But the amount available through these mechanisms is limited and is often riddled with cumbersome procedures.
Studies have evidenced that bank officers tend to rate women as less successful entrepreneurs on multiple parameters. They consider women as mobile citizens, as moving with their husbands, and often times prefer to speak to the husbands or the male business partners. Many women then primarily rely on family, relatives and informal saving groups for financing, which again, can only be limited.
Access to markets
Associations and networks are key elements in accessing markets and competing in them. Since the traditional associations and networks were founded and run by men, they are structurally biased to be convenient to men. Many of them meet late in the evening or over weekends for a drink, this is an essential part of networking . This format of socialising isn’t particularly women friendly. One, they usually need to be at home at these time to take care of their household responsibilities. Two, with the growing crime rates (informal studies have ranked India in the top 10 countries in the world with maximum number of crimes against women; and it will be a while before the December 2012 Delhi gang rape will stop sending shivers down the spine of most women) many women still do not feel comfortable in being out till late at night and do not feel comfortable being in situations with only men, especially late at night. Three, without a male chaperon many do not feel safe in the company of drunken men. Therefore, many impose a curfew on themselves when it comes to such activities.
Management Skills
Although management skill and training does not ensure a venture’s success, but its absence can jeopardise the ventures chances of success and growth. Research has found that sales and marketing skills, retaining good employees and dealing with unions to be particularly troublesome areas for women entrepreneurs. Since they usually run small business and provide limited opportunities for growth, they find it difficult to retain good employees. Traditionally, there were an abysmally low proportion of women enrolled in business courses – a trend that is now seeing reversal with women enrolments in MBA courses going as high as 40 per cent of the class, according to recent information. Research has shown that women usually start business at an older age as compared to men. To go back to school when women are juggling with multiple responsibilities, they require flexible learning methods which are still somewhat difficult to find.
Institutional and Legal Environment
The lack of effective and efficient legal system for smooth functioning of a business and dispute resolution is a challenge for any business and becomes more predominant for women. When it comes to dealing with government officials and red tape, many women entrepreneurs have described it as nothing short of a punishment since processes are lengthy, difficult and complex.
Socio-Cultural Environment
The primary responsibility of women is still considered by many to be that of being care givers to the family. It has frequently been observed that even if women work longer than their male spouses outside of home, yet the domestic responsibilities are assigned disproportionately to them. Many women turn to entrepreneurship because they need the time flexibility to juggle successfully between both their professional and personal life. Many women entrepreneurs prefer to keep their target markets limited to close to their homes to create the balance. This limits the business’ growth potential. When operating in functions that are unconventional, many women have experienced not being taken seriously both by their own employees as well as the suppliers and customers. This further limits their growth.
The Way Forward
All entrepreneurs face challenges in areas of money, markets and management. Because of their status in society and their need for flexibility, the magnitude and complexity of challenges for women entrepreneurs in developing economies is multifold. Recognising these challenges over the years, today, international development agencies and the government of India have all invested in schemes and programmes that specifically support women entrepreneurial activity including the United Nations Industrial Development Organization’s ‘Rural Women Entrepreneurship’ programme, the World Bank’s and International Labor Organization ‘Women Entrepreneurship Development’ Programs and the Government of India’s ‘Trade Related Entrepreneurship Assistance and Development Scheme for Women, ‘MSE-Cluster Development Program’, credit guarantee fund schemes, entrepreneurial and managerial skill development programs etc.
Yet, to achieve true success in this endeavor, society needs to work hand in hand with international organizations and governments for creating an enabling environment that will unleash the full potential of women entrepreneurs. Along with the efforts of policy makers, families, societies and nations need to be more accepting of women as entrepreneurs and their unique needs. Collectively they should instill in women the confidence of being capable of successful entrepreneurship and at the same time also provide them with the flexibility they need to juggle between their multiple responsibilities. Doing so will, not only, reduce gender inequalities, but also, nations will gain. Much is being done, yet we have miles to go before we sleep.