Women entrepreneurs face a series of problems right from the beginning till the enterprise
functions. Being a woman itself poses various problems to a woman entrepreneur. The problems
of Indian women pertain to her responsibility towards family, society and lion work.
The tradition, customs, socio cultural values, ethics, motherhood subordinates to ling husband
and men, physically weak, hard work areas, feeling of insecurity, cannot be tough etc are some
peculiar problems that the Indian women are coming across while they jump into
Women in rural areas have to suffer still further. They face tough resistance from men. They are
considered as helpers. The attitude of society towards her and constraints in which she has to live
and work are not very conducive.
Besides the above basic problems the other problems faced by women entrepreneurs are as
1. Family ties:
Women in India are very emotionally attached to their families. They are supposed to attend to
all the domestic work, to look after the children and other members of the family. They are over
burden with family responsibilities like extra attention to husband, children and in laws which
take away a lots of their time and energy. In such situation, it will be very difficult to concentrate
and run the enterprise successfully.
2. Male dominated society:
Even though our constitution speaks of equality between sexes, male chauvinism is still the order
of the day. Women are not treated equal to men. Their entry to business requires the approval of
the head of the family. Entrepreneurship has traditionally been seen as a male preserve. All these
put a break in the growth of women entrepreneurs.
3. Lack of education:
Women in India are lagging far behind in the field of education. Most of the women (around
sixty per cent of total women) are illiterate. Those who are educated are provided either less or
inadequate education than their male counterpart partly due to early marriage, partly due to son's
higher education and partly due to poverty. Due to lack of proper education, women
entrepreneurs remain in dark about the development of new technology, new methods of
production, marketing and other governmental support which will encourage them to flourish.
4. Social barriers:
The traditions and customs prevailed in Indian societies towards women sometimes stand as an
obstacle before them to grow and prosper. Castes and religions dominate with one another and
hinder women entrepreneurs too. In rural areas, they face more social barriers. They are always
seen with suspicious eyes.
5. Shortage of raw materials:
The scarcity of raw materials, sometimes nor, availability of proper and adequate raw materials
sounds the death-knell of the enterprises run by women entrepreneurs. Women entrepreneurs
really face a tough task in getting the required raw material and other necessary inputs for the
enterprises when the prices are very high.
6. Problem of finance:
Women entrepreneurs stiffer a lot in raising and meeting the financial needs of the business.
Bankers, creditors and financial institutes are not coming forward to provide financial assistance
to women borrowers on the ground of their less credit worthiness and more chances of business
failure. They also face financial problem due to blockage of funds in raw materials, work-in-
progress finished goods and non-receipt of payment from customers in time.
7. Tough competition:
Usually women entrepreneurs employ low technology in the process of production. In a market
where the competition is too high, they have to fight hard to survive in the market against the
organized sector and their male counterpart who have vast experience and capacity to adopt
advanced technology in managing enterprises
8. High cost of production:
Several factors including inefficient management contribute to the high cost of production which
stands as a stumbling block before women entrepreneurs. Women entrepreneurs face technology
obsolescence due to non-adoption or slow adoption to changing technology which is a major
factor of high cost of production.
9. Low risk-bearing capacity:
Women in India are by nature weak, shy and mild. They cannot bear the amount risk which is
essential for running an enterprise. Lack of education, training and financial support from
outsides also reduce their ability to bear the risk involved in an enterprises.
10. Limited mobility:
Women mobility in India is highly limited and has become a problem due to traditional values
and inability to drive vehicles. Moving alone and asking for a room to stay out in the night for
business purposes are still looked upon with suspicious eyes. Sometimes, younger women feel
uncomfortable in dealing with men who show extra interest in them than work related aspects.
11. Lack of entrepreneurial aptitude:
Lack of entrepreneurial aptitude is a matter of concern for women entrepreneurs. They have no
entrepreneurial bent of mind. Even after attending various training programmes on entrepreneur
ship women entrepreneurs fail to tide over the risks and troubles that may come up in an
12. Limited managerial ability:
Management has become a specialised job which only efficient managers perform. Women
entrepreneurs are not efficient in managerial functions like planning, organising, controlling,
coordinating, staffing, directing, motivating etc. of an enterprise. Therefore, less and limited
managerial ability of women has become a problem for them to run the enterprise successfully.
13. Legal formalities:
Fulfilling the legal formalities required for running an enterprise becomes an upheaval task on
the part of an women entrepreneur because of the prevalence of corrupt practices in government
offices and procedural delays for various licenses, electricity, water and shed allotments. In such
situations women entrepreneurs find it hard to concentrate on the smooth working of the
14. Exploitation by middle men:
Since women cannot run around for marketing, distribution and money collection, they have to
depend on middle men for the above activities. Middle men tend to exploit them in the guise of
helping. They add their own profit margin which results in less sales and lesser profit.
15. Lack of self confidence:
Women entrepreneurs because of their inherent nature, lack of self-confidence which is
essentially a motivating factor in running an enterprise successfully. They have to strive hard to
strike a balance between managing a family and managing an enterprise. Sometimes she has to
sacrifice her entrepreneurial urge in order to strike a balance between the two.
Schemes for promoting Women Entrepreneurs
According to the Third All India Census of Small Scale Industries conducted in 2001-02 and
subsequent estimates made, only 10.11% of the Micro and Small Enterprises in India are owned
by women while 9.46% of the MSE enterprises are managed by women. As per the latest
available estimates, the number of women owned and women managed enterprises is 12.99 lakh
and 12.15 lakh respectively.
In order to encourage more and more women enterprises in the MSE sector, several schemes
have been formulated by this Ministry and some more are in the process of being finalized,
targeted only at the development of women enterprises in India. Some of the schemes are:
1. TRADE RELATED ENTREPRENEURSHIP ASSISTANCE AND DEVELOPMENT
SCHEME FOR WOMEN (TREAD)
With a view to encourage women in setting up their own ventures, government launched a
Scheme, namely, “Trade Related Entrepreneurship Assistance and Development (TREAD)
during the 11th Plan. The scheme envisaged economic empowerment of women through the
development of their entrepreneurial skills in non-farm activities. There are three major
components of the scheme;
(i) GoI grant up to 30% of the total project cost to the Non Government Organisations (NGOs)
for promoting entrepreneurship among women. The remaining 70% of the project cost is
financed by the lending agency as loan for undertaking activities as envisaged in the project.
(ii) GoI grant upto Rs.1 lakh per programme to training institutions / NGOs for imparting
training to the women entrepreneurs.
(iii) Need-based GoI grants upto Rs.5 lakh to National Entrepreneurship Development
Institutions and any other institutions of repute for undertaking field surveys, research studies,
evaluation studies, designing of training modules etc.
Operationalisation of the Scheme
The scheme envisages that Women Associations/NGOs/SHGs should prepare composite
bankable proposals for a group of women entrepreneurs, and submitted to the bank, which are
signatories to participate in the scheme, namely, Syndicate Bank, State Bank of India, Canara
Bank and Allahabad Bank. A copy of the proposal submitted to the bank should be endorsed to
DC (MSME). Bank examines the proposal and issues approval. On the basis of the approval
proposal considered by M/o MSME and 30% of the loan amount is sanctioned as grant and made
available to the bank.
2. MICRO & SMALL ENTERPRISES CLUSTER DEVELOPMENT PROGRAMME (MSE-
a) Existing Clusters: A cluster is defined as a group of enterprises, normally 20 or more
producing same/similar products/services. The Cluster Development Programme (CDP) being
implemented envisages diagnostic study of identified clusters of traditional skill-based MSEs to
identify appropriate technologies and their providers and to facilitate adoption of available
technology meeting the specific needs of the end users. The Cluster Development aims at
enhanced competitiveness, technology improvement, adoption of best manufacturing practices,
marketing of products, employment generation etc. The scheme provides assistance for capacity
building, common facilities, marketing etc. the delivery, assimilation and diffusion of the
identified technology from its producers to the recipient user/cluster of small enterprises.
Type of interventions
I) Soft Interventions – capacity building activities in the cluster where no fixed assets is acquired
or formed. Soft interventions, inter alia, include
i. Diagnostic study
ii. Forming association-Trust building & Developing Identity
iii. Capacity building,
iv. Organising workshops, seminars,
v. Training & Exposure visits,
vi. Market development,
vii. Launch of Website,
viii. Common procurement,
ix. Common/complementary sales and branding;
In the past depending upon the type of cluster, assistance available for soft interventions has
varied in the range of Rs.25 – 35 lakh per cluster. Currently we have an internal ceiling of Rs.10
lakh for soft intervention under this Scheme, which we are trying to bring upwards. Clusters of
women’s enterprises are entitled up to 90% assistance for soft interventions.
II) Hard Interventions – These are tangible “assets” like
i. Setting up of Common Facility Centre (CFCs),
ii. Mini Tool Rooms,
iii. Design Centre’s,
iv. Testing Facilities,
v. Training Centre,
vi. R&D Centre’s,
vii. Common Raw Material Bank/Sales depot, etc.
There can be other tangible assets that could be set up by the women’s Clusters, as long as they
are put to common use. For hard interventions, it is necessary to form a Special Purpose Vehicle
(SPV) which could be a registered society, or a cooperative society, or company, or a trust or any
other legal entity — in which at least 20 to 30 members of the Cluster contribute and participate.
Other Cluster members who do not join this SPV could also sign up as Users. The Common
Facility Centre that is set up by the SPV as a hard intervention is entitled to the highest level of
assistance from the MSME Ministry i.e. upto 90% of the Project Cost. This covers the cost of
machinery, plant, equipment, laboratory and other tangible assets. The balance 10% of the
project cost would have to be contributed by the SPV or by the State government or the Local
government. But land and building are not covered under this “Project Cost” and will have to be
provided by the SPVs of the Women’s Enterprises Clusters or by the State government or by
some other agency.
III) Infrastructure Assistance
Infrastructure assistance includes the construction of basic amenities like power, approach roads,
drainage, water supply and storage and the like. MSME Ministry’s assistance for this component
is presently limited to 40% of the total cost — though we are trying to increase this level. Only
one element of Infrastructure Assistance i.e. Display or Exhibition Centre’s (which could consist
of show-rooms with attached stores) are entitled to a higher level of assistance in so far as
Women’s Clusters are concerned, i.e. 90%. This Display/Exhibition Centre could be built by the
Women’s Clusters, SPV within the Cluster, or near the Cluster or even in adjoining Markets of
Towns — as long as they exhibit and market the products manufactured by the Women’s
Creation of physical infrastructure:
This Ministry implemented the IID Scheme to provide developed sites with infrastructural
facilities like power distribution network, water, telecommunications, drainage and pollution
control facilities, roads, exhibition/display centres, raw materials, storage and marketing
outlets, common service facilities and technological back-up services, etc. This scheme has been
subsumed in the MSME-Cluster Development Programme. All the features of IID Scheme have
been retained. To create physical infrastructure exclusively for women enterprises central grant
of 40% of the project cost subject to a maximum of Rs.2 crores is available. The Ministry of
MSME is making efforts to enhance the quantum of grant to 80% in a project of Rs.10 crores.
Operationalisation of the Scheme
i) A Cluster Development Executive (CDL) is required for executing and monitoring all soft
interventions in a cluster. Normally, a CDE can be a DIC Officer/MSME-DI officer/retired
expert or even hired person from NonGovernment Sector.
ii) The hard interventions in a cluster and creation of physical infrastructure require to set up a
users body/special purpose vehicle which could be society/trust/company to be formed by the
3. CREDIT GUARANTEE FUND SCHEME
The Government introduced the Credit Guarantee Fund Scheme for Small Industries in May,
2000 with the objective of making available credit to SSI units, particularly tiny units, for loans
up to Rs. 25 lakh without collateral/ third party guarantees. The Scheme is being operated by the
Credit Guarantee Fund Trust for Small Industries (CGTSI) set up jointly by the Government of
India and SIDBI. The Scheme provides for collateral free credit facility (term loan and / or
working capital) extended by eligible lending institutions to new and existing SSI units/ Small
Scale Service and Business (industry related) Enterprises (SSSBEs) including Information
Technology and Software Industry up to Rs. 25 lakh per borrowing unit. In the case of women
enterprises, the guarantee cover is up to 80% of the credit subject to maximum guarantee limit
of Rs. 20 lakh. The member lending institutions (MLI) availing of guarantee from the Trust have
to pay a one-time guarantee fee of 1.5% of the credit facility (comprising term loan and / or
working capital) sanctioned by the lending institution to the borrower and annual service fee of
0.75% per annum on the amount of credit facility extended by the MLI, which is covered under
Operationalisation of the Scheme
The entrepreneurs whose bank finance is approved by the lending bank may ask the bank to
obtain guarantee from the Credit Guarantee Trust Fund. This facility is available online to the
lending banks and clearance from the Trust is conveyed in a day or two.
4. SUPPORT FOR ENTREPRENEURIAL AND MANAGERIAL DEVELOPMENT
MSME DIs regularly conducts EDPs/MDPs for existing and prospective entrepreneurs and
charge fee for such courses. To encourage more entrepreneurs from among the SC/ST, women
and physically challenged groups, it is proposed that such beneficiaries will not be charged any
fees but, instead paid a stipend of Rs.500/- per capita per month. 50,000 entrepreneurs will be
trained in IT, Fashion Technology, Catering, Agro & Food Processing, Pharmaceutical,
biotechnology etc. through specialized courses run by MSME DIs. 20% of courses conducted by
these Institutions shall be exclusively for women.
5. EXHIBITIONS FOR WOMEN UNDER PROMOTIONAL PACKAGE FOR MICRO &
SMALL ENTERPRISES APPROVED BY CCEA UNDER MARKETING SUPPORT
DC (MSME) has formulated a scheme for women entrepreneurs to encourage Small & Micro
manufacturing units owned by women in their efforts at tapping and developing overseas
markets, to increase participation of representatives of small/micro manufacturing enterprises
under SIDO stall at International Trade Fairs/Exhibitions, to enhance export from such units.
Under this scheme participation of women entrepreneurs in 25 international exhibitions is
envisaged during the 11th Plan.
For the year 2007-08 a good number of prominent women entrepreneur associations have been
requested to sponsor their members for participation in 5 international exhibitions scheduled
during the months of Jan.-March, 2008. An advertisement has also been released in this regard
in daily newspaper.
You will be happy to know that with a view to encourage women entrepreneurs to participate in
the International Exhibitions it has been decided to:
i) provide rent free space in the exhibitions
ii) reimburse 100% economy class air fare for one representative
iii) reimburse shipping cost upto Rs.15,000/-
iv) The overall ceiling shall however be Rs. 1.25 lac.