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Friday, October 26, 2018

ENTREPRENEURSHIP DEVELOPMENT NOTES: RURAL AND WOMAN ENTREPRENEURSHIP


Unit – 2: Rural and Woman Entrepreneurship
Rural Entrepreneur, Its Types and their Problems
Meaning: Rural entrepreneurs are those who carry out entrepreneurial activities by establishing industrial and business units in the rural sector of the economy. In other words, establishing industrial and business units in the rural areas refers to rural entrepreneurship. In simple words, rural entrepreneurship implies entrepreneurship emerging in rural areas. Or, say, rural entrepreneurship implies rural industrialisation. Thus, we can say, entrepreneurship precedes industrialization.
According to KVIC (Khadi and Village Industry Commission), "village industries or Rural industry means any industry located in rural areas, population of which does not exceed 10,000 or such other figure which produces any goods or renders any services with or without use of power and in which the fixed capital investment per head of an artisan or a worker does not exceed a thousand rupees".
The modified definition of rural industries has been given by Government of India in order to enlarge its scope. According to Government of India, "Any industry located in rural area, village or town with a population of 20,000 and below and an investment of Rs. 3 crores in plant and machinery is classified as a village industry."
Types of Rural Industries:
All the village industries come under the following broad categories:
Ø  Agro Based Industries: like sugar industries, jaggery, oil processing from oil seeds, pickles, fruit juice, spices, diary products etc.
Ø  Forest Based Industries: like wood products, bamboo products, honey, coir industry, making eating plates from leaves.
Ø  Mineral based industry: like stone crushing, cement industries, red oxide making, wall coating powders etc.
Ø  Textile Industry: like spinning, weaving, colouring, bleaching.
Ø  Engineering and Services: like agriculture equipments, tractors and pump sets repairs etc.
Problems Faced By Rural Entrepreneurs
Most of the rural entrepreneurs face peculiar problems like illiteracy, fear of risk, lack of training and experience, limited purchasing power and competition from urban entrepreneurs. Some of the major problems faced by rural entrepreneurs are as under.
1. Paucity of funds: Most of the rural entrepreneurs fail to get external funds due to absence of tangible security and credit in the market. The procedure to avail the loan facility is too time-consuming that its delay often disappoints the rural entrepreneurs.
2. Competition: Rural entrepreneurs face severe completion from large sized organizations and urban entrepreneurs. They incur high cost of production due to high input cost.
3. Middlemen: Middlemen exploit rural entrepreneurs. The rural entrepreneurs are heavily dependent on middlemen for marketing of their products who pocket large amount of profit.
4. Legal formalities: Rural entrepreneurs find it extremely difficult in complying with various legal formalities in obtaining licenses due to illiteracy and ignorance.
5. Procurement of raw materials: Procurement of raw materials is really a tough task for rural entrepreneur. They may end up with poor quality raw materials, may also face the problem of storage and warehousing.
6. Risk element: Rural entrepreneurs have less risk bearing capacity due to lack of financial resources and external support.
7. Lack of technical knowledge: Rural entrepreneurs suffer a severe problem of lack of technical knowledge. Lack of training facilities and extension services crate a hurdle for the development of rural entrepreneurship.
8. Lack of infrastructural facilities: The growth of rural entrepreneurs is not very healthy in spite of efforts made by government due to lack of proper and adequate infrastructural facilities.
9. Poor quality of products: Another important problem is growth of rural entrepreneurship is the inferior quality of products produced due to lack of availability of standard tools and equipment and poor quality of raw materials.
10. Negative attitude: The environment in the family, society and support system is not conducive to encourage rural people to take up entrepreneurship as a career. It may be due to lack of awareness and knowledge of entrepreneurial opportunities.
Role and importance of rural entrepreneurs in India
The development of rural entrepreneurs is a complex problem which can be tackled by the social, political and economic institutions. The sooner they are established the better it would be for the entrepreneurial development in the rural sector and the economic growth of the country.
1. Provide employment opportunities: Rural entrepreneurship is labor intensive and provide a clear solution to the growing problem of unemployment. Development of industrial units in rural areas through rural entrepreneurship has high potential for employment generation and income creation.
2. Check on migration of rural population: Rural entrepreneurship can fill the big gap and disparities in income rural and urban people. Rural entrepreneurship will bring in or develop infrastructural facilities like power, roads, bridges etc. It can help to check the migration of people from rural to urban areas in search of jobs.
3. Balanced regional growth: Rural entrepreneurship can dispel the concentration of industrial units in urban areas and promote regional development in a balanced way.
4. Promotion of artistic activities: The age-old rich heritage of rural India is preserved by protecting and promoting art and handicrafts through rural entrepreneurship.
5. Check on social evils: The growth of rural entrepreneurship can reduce the social evils like poverty, growth of slums, pollution in cities etc.
6. Awaken the rural youth: Rural entrepreneurship can awaken the rural youth and expose them to various avenues to adopt entrepreneurship and promote it as a career.
7. Improved standard of living: Rural entrepreneurship will also increase the literacy rate of rural population. Their education and self-employment will prosper the community, thus increasing their standard of living.
Opportunities and Prospects for Rural entrepreneurs
a)      Support & Motivation from local people: Rural entrepreneurs have a lot of support from the Rural people. Rural village people always encourage and give the motivation to the entrepreneurs.
b)      Low establishment cost: When compared to the urban areas, rural entrepreneurs' business establishment cost is very low. There is no need to construct or facilities huge infrastructure and buildings.
c)       Competitive advantages / Availability of labour: In India seventy percent of the people are living in the village. Majority of the rural people are depending on the agriculture. The agriculture work is not available throughout the year. That is the reason why rural entrepreneurs have the competitive advantage in easily acquiring unskilled and semiskilled labor.
d)      Government policies and subsidies: The government of India is continuously monitoring and introducing the new policies for encouraging the rural entrepreneurship. These policies are very flexible, innovative, liberalized and giving continues support to rural entrepreneurs. At the same time government has also announced huge subsidies for promoting the rural entrepreneurship.
e)      Availability of raw materials. Most of the times the rural entrepreneurs are depending upon the farm based products as raw materials, which are available through-out the year. These raw materials are available in the rural area that is the reason there is no transportation cost and flotation cost.
f)       Cost of production: Rural entrepreneurs cost of production is very low when compared to the urban industries. The factors of production are available with low cost; automatically the cost of production is also low. Because of this rural entrepreneurs can sell their goods and services with cheaper cost.
g)      Optimum utilisation of produces: Optimum utilisation of farm produces is only possible through the rural entrepreneurship only. Most of the rural entrepreneurs depend upon the farm produces as raw materials.
h)      Employment generation for rural youth: Rural entrepreneurs are providing hundred percent jobs for rural youth. If the rural entrepreneurs are succeeding in this activity the migration of the people to urban from rural will be immediately stopped to a maximum extent.
i)        Promotion cost: There is no promotion cost for rural entrepreneurs. In fact the competition is very less. Particularly there is no need for advertising and other promotional activities for their products.
j)        Potential customer: In this twenty-first century rural villagers are economically strong and also heavily populated. This heavy population can be converted as potential customers. That is the reason all the MNC's are concentrated in rural villages for their potentiality.
k)      Building the goodwill: Rural entrepreneurs have a lot of scope building the goodwill. Most of the rural entrepreneurs have ethical values and also these people do not work for pure profits.
Introduction to Women Entrepreneurship
Women Entrepreneurs may be defined as the women or a group of women who initiate, organize and operate a business enterprise. Government of India has defined women entrepreneurs as an enterprise owned and controlled by a women having a minimum financial interest of 51% of the capital and giving at least 51% of employment generated in the enterprise to women. Like a male entrepreneurs a women entrepreneur has many functions. They should explore the prospects of starting new enterprise; undertake risks, introduction of new innovations, coordination administration and control of business and providing effective leadership in all aspects of business.
Problems and Challenges of woman entrepreneurship in Assam
The entrepreneurs in Assam in particular and those of Indian’s North Eastern Region in general, irrespective of their gender, have some specific problems in setting up and running their business ventures. Similarly the Indian women in general have some problems specific to them. The nature and magnitude of the problems faced by our women depends on various factors to which a woman is subjected. Women in general have high degree of patience, profound sincerity in work, diligence, sense of duty and efficient managerial skill (with initial guidance). But unfortunately, the society either fails to identify their quality or under-estimate them and /or suppress them as second class citizen. The problems in general the women entrepreneurs in developing countries like India face, which are equally applicable to the women entrepreneurs in Assam relate to the following:
1.       Social attitude and support: Being in a male dominated society, the Indian women are treated as dependent on men and have no liberty to take decisions of their own. The attitude of non-co-operative from her husband or close family members stands heavily in the way of developing women entrepreneurship. Moreover, the conservative attitude of the society does not allow our women in most cases, to take up entrepreneurial ventures. The gender related discrimination is felt more severely when a woman entrepreneur approaches promotional agencies or banks.
2.       Mobility constraint: The women in Assam more particularly those of rural areas have restrictions in their mobility so far as their social status is concerned. Although now-a-days they have relatively more freedom of mobility, but most often become soft target of suspicion by husband. As a prospective entrepreneur, a woman has to visit various financial institutions and Govt. agencies repeatedly to get her works done. But the humiliating attitude of the officials frustrates her and most often abandons the idea of venturing the project.
3.       Dual Responsibility: A woman entrepreneur has to perform dual responsibility of her profession at enterprise as also at family as wife and mother. The unmarried girls also, in many cases, are expected to take care of their younger’s and help mother in her work, besides working at their enterprises. As responsibility of family care largely remains in the hands of women, the women entrepreneurs in Assam in particular and India in general suffer from work-family conflicts.
4.       Scanty Financial Resources: Financial constraint is a problem for business in general. But when it comes to the case of a woman entrepreneur, the problem becomes more severe. As both family members and the officials of financial institutions have less confidence on women as entrepreneurs, they are mostly reluctant to spare finance for a woman business venture.
5.       Low risk bearing capacity: Women in general have less confidence as compared to their male counterparts. As such, they have less risk taking ability; which is an essential pre-requisite for entrepreneurial success. Women in our country live a protected life. She is taught to depend on male members from birth. She is not allowed to take any risk even if she is willing to take and has ability to bear it.
6.       Low educational background: Our women, more particularly those who live in rural areas, bear a very low educational profile. Many of them are either illiterate or have very low level of education. As a result, they face a lot of problems in doing with their business.
7.       Absence of Skill and Motivation: Our rural women in general lack entrepreneurial skill and they do not posses adequate motivation towards entrepreneurial career. However, the Indian Institute of Entrepreneurship (IIE) experience indicates that effective training is a vibrant tool in developing and motivating women entrepreneurship.
8.       Absence of Group Efforts: The tendency of our women to work in group is very less. More particularly, when it comes to the case of doing business, they hardly understand the benefit of working in group. Therefore, our women should be encouraged to setup and operate enterprises with their group efforts.
9.       Absence of Rural Connectivity and Development: Our rural areas are highly potential markets for consumer goods. But absence of proper connectivity and development efforts are the major challenges in developing sustained entrepreneurial practices among our rural women.
Government Incentives and supports and opportunities towards women entrepreneurship
Despite various constraints faced by the women entrepreneurs of Assam in particular and India in general, several opportunities are also available now-a-days. Women Entrepreneurs can be seen everywhere in the startup-up ecosystem of India. Women too are seen leaving their high-profile jobs as well as some stepping out of the four walls of their homes and joining the pool of Entrepreneurship in India. The major factor to jumpstart the entrepreneurial journey is capital and various banks offer specialized loans for women entrepreneurs that have slightly different and more flexible set of terms and conditions pertaining to collateral security, interest rates, etc. 
Central Government Incentives and Supports: Now-a-days there are various Govt. schemes of incentive and support to promote women entrepreneurship. Some of the schemes are absolutely for women and other weaker sections of the society; while there are many others which are gender free where women have some privilege. Here is a list of various schemes and loans exclusively for women that aim at promoting and easing out the process for them:
1. Annapurna Scheme: This scheme is offered by the State Bank of Mysore for those women entrepreneurs who are setting up food catering industry in order to sell packed meals, snacks, etc. The amount granted as a loan under this scheme can be used to fulfill the working capital needs of the business like buying utensils and other kitchen tools and equipment.  Under this loan, a guarantor is required along with the assets of the business being pledged as collateral security. Further, the maximum amount of money that is granted is Rs. 50,000 which has to re-paid in monthly installments for 36 months, however, after the loan is sanctioned, the lender doesn’t have to pay the EMI for the first month. The interest rate is determined depending upon the market rate. 
2. Stree Shakti Package For Women Entrepreneurs: This scheme is offered by most of the SBI branches to women who have 50% share in the ownership of a firm or business and have taken part in the state agencies run Entrepreneurship Development Programmes (EDP).  The scheme also offers a discounted rate of interest by 0.50% in case the amount of loan is more than Rs. 2 lakhs. 
3. Bharatiya Mahila Bank Business Loan: This loan is a support system for budding women entrepreneurs looking to start new ventures in the fields of the retail sector, loan against property, MICRO loans, and SME loans.
The maximum loan amount under this loan goes up to
Rs. 20 crores in case of manufacturing industries and also a concession is available to the extent of 0.25% on the interest rate and interest rates usually range from 10.15% and higher. Additionally, under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), there is no requirement of collateral security for a loan of up to Rs. 1 crore.
4. Dena Shakti Scheme: This scheme is provided by Dena bank to those women entrepreneurs in the fields of agriculture, manufacturing, micro-credit, retail stores, or small enterprises; who are in need of financial assistance. The interest rate is also decreased by 0.25% along with the maximum loan amount being Rs. 20 lakhs for retail trade; education and housing whereas 50,000 under the microcredit. 
5. Udyogini Scheme: This scheme is offered by Punjab and Sind Bank so as to provide women entrepreneurs involved in Agriculture, retail and small business enterprises to get loans for business at flexible terms and concessional interest rates. The maximum amount of loan under this scheme for women between the age bracket of 18-45 years is 1 lakhs but your family income is also taken into consideration and is set at Rs. 45,000 per annum for SC/ST women. 
6. Cent Kalyani Scheme: This scheme is offered by the Central Bank of India with the aim of supporting women in starting a new venture or expanding or modifying an existing enterprise. This loan can be availed by women who are involved in village and cottage industries, micro, small and medium enterprises, self-employed women, agriculture and allied activities, retail trade, and government-sponsored programs. This scheme requires no collateral security or guarantor and charges no processing fees. And the maximum amount that can be granted under the scheme is Rs. 100 lakhs. 
7. Mahila Udyam Nidhi Scheme: This scheme is launched by Punjab National Bank and aims at supporting the women entrepreneurs involved in the small scale industries by granting them soft loans that can be repaid over a period of 10 years. Under this scheme there are different plans for beauty parlors, day care centres, purchase of auto rickshaws, two-wheelers, cars, etc. the maximum amount granted under this scheme is Rs. 10 lakhs and the interest depends upon the market rates. 
8. Mudra Yojana Scheme For Women: This scheme has been launched by the Govt. of India for individual women wanting to start small new enterprises and businesses like beauty parlors, tailoring units, tuition centres, etc. as well as a group of women wanting to start a venture together. The loan doesn’t require any collateral security and can be availed as per 3 schemes :
i. Shishu – loan amount is limited to Rs. 50,000 and can be availed by those businesses that are in their initial stages.
ii. Kishor – loan amount ranges between Rs. 50,000 and Rs. 5 lakhs and can be availed by those who have a well-established enterprise. 
iii. Tarun – loan amount is Rs. 10 lakhs and can be availed by those businesses that are well established but require further funds for the purpose of expansion
If the loan is granted, a Mudra card will be given to you which functions the same way as a credit card however the funds available are limited to 10% of the loan amount granted to you. 
9. Orient Mahila Vikas Yojana Scheme: This scheme is provided by Oriental Bank of Commerce to those women who hold a 51% share capital individually or jointly in a proprietary concern. No collateral security is required for loans of Rs. 10 lakhs up to Rs. 25 lakhs in case of small-scale industries and the period of repayment is 7 years. A concession on the interest rate of up to 2% is given.
Assam Government incentives and support
Cash reward Every Year: To encourage women entrepreneurship in Assam, Chief Minister Sarbananda Sonowal on announces that the state would give commendation and cash awards to three successful woman entrepreneurs every year. Speaking on the first day of a two-day Assam Women Entrepreneurs’ Conclave in Guwahati, Sonowal said the state government would acknowledge their success by giving cash awards of Rs 5 lakh, Rs 3 lakh and Rs 2 lakh, respectively. He also said that the state government was committed to channelising the skills of the women of Assam using latest technology and give a fillip to their entrepreneurial skills.
Appropriate planning coupled with scientific approaches and honest and hard labour would lead to a prosperous Assam, he said as he appealed to woman entrepreneurs to keep working for their empowerment and development of Assam. In all the 33 districts of the state, he said, the government would provide assistance to set up women hub and women clusters. The chief minister also felicitated three woman entrepreneurs in recognition to their success in their business and inaugurated an exhibition at the conclave organised by the Indian Institute of Entrepreneurship.
Women Entrepreneurs’ Conclave (Jan’ 2018)
The Indian Institute of Entrepreneurship (IIE) will be organizing the first edition of two-day Assam Women Entrepreneurs’ Conclave. It is scheduled to be held from January 29 at NEDFi House in Guwahati. There is a huge scope for entrepreneurial development among women in Assam apart from the traditional sectors like handloom, handicraft, beauty, wellness and food processing. In order to boost these opportunities and help in skill development, the conclave will provide a platform to local women entrepreneurs to ideate and interact with experts in the field.
Along with the conventional sectors the conclave aims to provide mentoring on different aspects of business planning and to build networks across sectors like branding, information technology, online business, tourism and hospitality, education, packaging and printing and more.
Emergence of woman entrepreneurs in National and Global perspective
Women’s entrepreneurship has hit a media tipping point. Women-owned entities in the formal sector represent approximately 37 percent of enterprises globally — a market worthy of attention by businesses and policy makers alike. While aggregated data is often challenging to find, the recent Global Entrepreneurship Monitor (GEM) found 126 million women starting or running businesses, and 98 million operating established (over three and a half years) businesses.
That’s 224 million women impacting the global economy — and this survey counts only 67 of the 188 countries recognized by the World Bank. These entrepreneurs have cross the spectrum of micro to high growth — from supporting life to creating wealth. They include hair salon owners, high tech visionaries and everything in between, all making critical economic contributions.
Women entrepreneurs tend to be more successful because of their trusted status in the community. Controlling for firm characteristics, research suggests that women-owned firms outperform those owned by male counterparts.
In this conflict-ridden Himalayan territory, entrepreneurship has witnessed many a metamorphosis. Initially, it was taken up by the educated upper class men who invested their own money to build their fortunes. Then educated women followed and few have made a significant mark over the years. However, what has not been recognised is that many uneducated women are also enthusiastically raising family incomes through micro ventures and reinvesting their earnings in their families and communities. These women also inspire other women in their localities to pursue their dreams through entrepreneurship at the grassroots level.
For Instance, Kashmir is an agrarian economy with more than 70 per cent of the population depending upon agriculture for their livelihood. Even though grassroots female entrepreneurs are not undertaking their businesses at a commercial level, they are breaking barriers and inspiring other women to become self-reliant.
Unlike many working women who are finding it difficult to manage their professional and personal life, many females set an example. The uneducated women entrepreneurs, especially in rural areas, still do not have access to technical and financial support that can give a fillip to their businesses from a domestic to a commercial level.
There are cultural and societal norms that hinder equal participation of women in ventures that men undertake. But women have to contribute to entrepreneurial activities in the best way possible. Collectively, women entrepreneurs look different than their male counterparts. Their lower employment numbers and growth aspirations have historically led to questions of how to “fix” them. But different doesn’t mean deficient — or underperforming. Entrepreneurial activity creates growth and prosperity — and solutions for social problems. And today’s trends show that women will be a driving force of entrepreneurial growth in the future.
In India, women comprise about 30 percent of corporate senior management positions, which is notably higher than the global average (24 percent). But in the overall workforce, India is one of the worst countries in the world — 113th out of 135 — when it comes to the gender gap. And women entrepreneurs constitute only 10 percent of the total number of entrepreneurs in the country.
Women entrepreneurs have an edge over male entrepreneurs. Edges matter to investors. And the numbers back this up outside India and this is also true in 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. Lasting relationships benefit a business tremendously, as only so much can be achieved without trust… with employees, customers, suppliers, shareholders, government, 
Popular Women Entrepreneurs of India
India has its own pool of fearless and talent women entrepreneurs who’ve made a mark for themselves in India as well as overseas. They've embraced entrepreneurship and established their own venture.
1. Kiran Mazumdar Shaw: Born in Bangalore, she did her Bachelors in Zoology from Mount Carmel and PG from Ballarat College, Melbourne in Malting and Brewing. She is the Chairman and Managing Director (CMD) of Biocon Limited. Under her leadership, the company has evolved as a leading player in biomedicine research with a focus on diabetes and oncology. She is also a member of the board of governors of the prestigious Indian School of Business and IIT, Hyderabad. She was awarded Padma Shri (1989) and Padma Bhushan (2005) by the Indian government.
2. Shahnaz Husain: She is known as the “Queen of Herbal Beauty Care”. She was married off at the age of 16. But her interest in beauty and cosmetic made her discover Shahnaz Herbals Inc. The company is best known for its herbal cosmetics particularly skin care products ‘without animal testing’. The company has over 400 Franchise clinics across the world covering 138 countries. She has been bestowed with the ‘Padma Shri’ award by the Government of India in 2006 and ‘World’s Greatest Woman Entrepreneur’ award by 1996 Success Magazine.
3. Ravina Raj Kohli: She was the Head of Content and Communication at Sony Entertainment Television and the CEO at the Kerry Packer owned Channel 9 on the Doordarshan platform. Later, she worked with Star news as the CEO. She has a Diploma from the London School of Journalism and Bachelor’s Degree in Psychology, Economics and Literature from Bangalore University. Her company JobCorp Company Pvt. Ltd. works toward empowerment of women. Her name has featured among the top 20 female professionals in India. She is also Indian television’s first woman CEO.
4. Rashmi Sinha: Born in Lucknow, India Rashmi owns a PhD in neuropsychology from the Brown University. Prior to that, she completed her B.A. and M.A. from Allahabad University. In 2006, she co-founded SlideShare along with her husband, a site to share presentations online. The site received tremendous response and was acquired by LinkedIn for $100 million in 2012. She was ranked No.8 in the Fortune’s Most Powerful Women Entrepreneurs list and named one of the World’s Top 10 Women Influencers in Web 2.0 by Fast Company.
Popular Woman Entrepreneurs of Assam
Meghalee Bora and Manomoti Kakoti Barman made Assam proud when they received Special Recognition Award from the president of India for the Micro, Small and Medium Enterprises in New Delhi. These two women entrepreneurs have done significant works in their respective field of food processing for more than a decade. They were recently felicitated by North Eastern Regional Agriculture Marketing Corporation (NERAMAC).
Meghalee Bora, proprietor of Meghalee Food Products in Jorhat, has been working for the last decade to produce locally made food items like pickle and various species. While Manomati Kakati Barman who owns Shri Ganesh Food Products in Guwahati also been involved with the entrepreneurship for several years.
An elated Meghalee Bora after being felicitated said, “I’m very glad to receive the award and happy that NERAMAC has felicitated our efforts. I would like to dedicate this award to my father. He always encouraged us to be honest and dedicative towards our work.”
Meghalee Bora’s mission was started in the year 1997 with mere Rs 500 and at present she has a return of around Rs 1 lakh per month. The lady employs 17 local women in her factory and thinking to create more job opportunities.

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