We’re helping women to achieve better business start-ups

Female entrepreneurs face hidden barriers in India. I used the Chancellor’s Fellowship to share my research with a start-up centre, linked to government, that supports such women. This partnership is having a big impact on the understanding and the help that women now receive.

By Shoba Arun

Imagine you’re a woman in India trying to earn some money by building a small business. Maybe it involves making and selling handicraft, painting and decorating homes, shoe repairing or even providing a rudimentary village taxi service.

The state government wants to help you. It offers low-cost, start-up capital and promotes start-up enterprises for women and for those from marginalised groups.  That’s important. But it’s not enough. What about the extra hurdles you probably face just because you’re a woman and because of how you were raised and see yourself?

Barriers faced by women

There are the male state and financial officials who don’t take you seriously. They can create bureaucratic obstacles that wouldn’t affect a man. For example, women are routinely asked to make additional payments for obtaining loans. Lending for women’s start-ups may simply not be approved because they are judged to be riskier than male applicants.

Meanwhile, your business is slower to grow than anticipated because family responsibilities, including elderly care, prevent you working full-time. Maybe male competitors edge ahead because, as evidence demonstrates, they are more prepared to take risks. Perhaps, you lack confidence facing a public world of men.

These are real-life circumstances confronted by female entrepreneurs in India and other countries. During my Chancellor’s Fellowship, I have been helping Indian policy-makers to recognise and address these issues.

Thinking beyond providing start-up capital

Gender and gender socialisation, which I call ‘gender capital’, play a big role in how well a woman can operate in a small business environment. It’s not just about getting hold of working capital. So policy has to think beyond simply providing start-up credit.

By shining a light on these realities, I’ve helped persuade those tasked with supporting female-led microbusinesses to broaden their approach. I have encouraged them to engage with women’s real lived experiences running their businesses. That’s great news for these start-ups and the families depending on them.

The fellowship has brought together research, practice and policy to make a real difference for women trying to get their businesses off the ground. Success has been rooted in three principles.

Fellowship’s three key impacts

First, through research in other parts of India we, the academics, have brought insight into the practical issues facing similar women. As academics, we’ve been able to offer an analytical approach to understanding those issues – to explain how gender and gender socialisation impacts, in this case on the capacity of women to succeed with small business start-ups.

Second, the fellowship allowed me to gain access to a start-up cell that’s already supporting such female entrepreneurs. At the start-up cell, based at the Chandragupt Institute of Management, Patna in Bihar, we’ve been able to share insights into practice and innovations. I became a Visiting Fellow in at the Institute, a research centre on microfinance and social enterprises. That allowed me to link research and practice, working with – and learning from – stakeholders, while bringing with me my research on gender equality in development policy on micro-enterprises and self-help groups.

Third, the expertise of that organisation and the prestige of Manchester Metropolitan University helped draw top Indian policy makers to see how their policies work out on the ground. They have been able to share our conceptual thinking and, collaboratively, to work out improved approaches.  This partnership of academics, practitioners and policy makers is securing a win for all and, in particular, for the women, and their families, who are the focus of all our efforts.

Political influence

My placement was in Bihar, in northern India, one of the poorest regions in a rapidly changing country. Gender inequality is a major concern. The State Government encourages entrepreneurial development which is inclusive of women. I spent my fellowship with women whose small businesses are under the microscope at Chandragupt. So we were able to see what’s happening in practice and offer some key recommendations to the Principle Secretary at Bihar’s State Department of Industries. He drafts policy for that department and attended our first workshop in December and then a skype meeting at the end of the fellowship.

We were able to show how new start-ups tend to be a masculine field. I don’t mean it’s a man’s world. The issues are more complex. It’s that the success of these microbusinesses relies on skills that men are more likely than women to have because of their upbringing. Success can also be influenced by issues such as parenting, elderly care and household responsibility as well as by the way in which men are treated in the society.  Given the difference in their lives, it is hardly surprising that men take more risks, spend more time in the businesses and can take advantage of policy and institutional support provided to microenterprises.

Why women are disadvantaged

Running a start-up business is not a 9 to 5, Monday to Friday job. That makes it more difficult for women who have on-going childcare and household responsibilities. A successful start-up also requires particular social skills – abilities to take risks, to be aggressive, to negotiate and to engage with range of stakeholders, such as state and financial institutions as well as through marketing to customers.

Men tend to have strengths in many of these areas – and are treated differently compared with women, giving their start-ups a better chance of success. In comparison, women running start-ups may feel like they are operating with one hand tied. This has implications for their business’s sustainability, capacity for innovation and their long-term viability.

Our recommendations

We have made some recommendations. They begin at the drawing board, with reassessing the definition of a female start-up. The definition, focussing on full ownership by a woman, does not reflect the reality of such businesses in which a woman may be only a part owner.

Many start-ups fail in first year, so after first year, start-up receive a success fee of 2 per cent of the total investment. We recommend this should be doubled for women to reflect the extra constraints with which they struggle. We also propose mentoring schemes and peer support schemes, like those at Chandragupt, to help women to operate better in the business world.

This is just the beginning. The learning will now be shared more widely elsewhere in India. The partnerships established by the Fellowship are now strong. We hope that they will continue to bear fruit.

Shoba Arun is a Senior Lecturer in the Department of Sociology at Manchester Metropolitan University.

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