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Women Entrepreneurs: a dire need for India’s development

By GovernanceToday
In Banking & Finance
September 14, 2015
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“To call woman the weaker sex is a libel, it is man’s injustice to woman. If by strength is meant brute strength, then, indeed, is woman less brute than man. If by strength is meant moral power, then woman is immeasurably man’s superior”….– Mahatma Gandhi

corporate IndiaIN INDIA, women comprise about 30 percent of corporate senior management positions, which is notably higher than the global average. However, it is equally true that they have to assume the responsibility of being a homemaker first. According to the World Economic Forum’s (WEF) Global Gender Gap Report 2014, Indian women spent an average of 352 minutes per day on unpaid work while men spent just 52. If we consider the overall workforce, India doesn’t rank as a leading country in the world – 113th out of 135 – when it comes to the gender gap while women entrepreneurs constitute only 10 percent of the total number of entrepreneurs in the country.

Even in agrarian sections of the country, where women work as hard in the fields as men, they are also expected to manage the
home. Women seeking and finding employment in paid jobs outside the home is far from the norm. According to the same WEF report, India’s women make up slightly over a third of the workforce, get paid just over half of what men get for similar work and on average, earn a quarter of what men do.

However portraying a contrary picture, some surveys suggest that women entrepreneurs have an edge over male entrepreneurs and edges matter to investors. The figures back up this claim in and outside India.

One of the most obvious reasons to invest in women leaders in India is that women control the vast majority of household spending. So unless you are a business that is focussed mostly on men, women are more likely to better understand customer perspective. Another is that women are often better at building long-term relationships than men.

Companies with Female ExecutiveThere is also the factor of having diversity in a leadership team. Multiple studies have argued that socially different group members do more than simply introducing new viewpoints or approaches. So diverse groups outperformed more homogeneous groups not because of an influx of new ideas, but because diversity triggers more information  processing which is absent from homogeneous groups. A company’s odds of success increase with female executives at the higher levels like Vice President and  director etc. Statistically significant evidence shows that there is dependence between a company having female executives and its success.

Since entrepreneurs typically spend some time in the workforce before starting up, less women in jobs outside the home also  translates to fewer women entrepreneurs. Thus, with an aim to facilitate employment opportunities for women, the micro, small and medium enterprise (MSME) ministry is implementing special, dedicated schemes for Women Entrepreneurship Development. These schemes include Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme and Mahila Coir Yojana that envisages economic empowerment of women through trade related training, information and counselling extension activities related to trades, products and services. Under this scheme the financial loans are provided by nationalized banks and through grants of central government subject to maximum limit of Rs 30 lakh through NGOs for capacity building and for undertaking selfemployment ventures by women in non-farm activities. Under Mahila Coir Yojana, financial assistance is provided for motorized ratts for spinning coir yarn to women artisans after giving them the required training.

As per another World Economic Forum report, nine percent of Indian firms have female participation in ownership. Earlier data, from the Fourth All India Census of Micro, Small and Medium Enterprise sector (2006-07) says there were over 26 lakh ‘women enterprises’ (out of a total of 3.67 crore), i.e. around 7.3 per cent of all MSMEs. Women’s entrepreneurship isn’t an alien concept in India. But much of this enterprise has tended to be small-scale, and in areas in which women are expected to have ‘natural’ expertise, for instance; food-related businesses like baking and catering, clothing-related like tailoring or boutiques, handicrafts, lifestyle sector businesses, and so on. It is time their talents are used in more diversified and traditionally male dominated areas as well. The author has used the data from some of the surveys conducted by Dow Jones, Forbes, Ministry of  MSME and World Economic Forum for the reference.