In this first post of a two-part series, I note the risks and barriers associated with [micro] entrepreneurship by the poor, the social and cultural barriers especially faced by women in this local context, and the socio-economic profile of [urban poor] women that tend to venture into entrepreneurship. Note however, that these observations stem from my experience in the state of Orissa, a state that is notoriously "un-entrepreneurial" and a state whose economic and physical infrastructure are poorly developed.
In my next post, I describe some specific profiles of women that have tended to engage in our entrepreneurship development project, and why it would be problematic to focus solely on those who are "Below Poverty Line", or meet very stringent eligibility criteria.
The businessman shown above has been a "consultant" to our snack production enterprise, and has provided some interesting insights on entrepreneurship & labor dynamics.
Left: A highly successful local businessman, who's made a fortune by processing and trading spices, Indian snacks, and various kitchen groceries. Above: Individuals working for our project's in-house snack production enterprise. The latter are not entrepreneurs, but are skilled artisans who so far have been too risk averse to own the snack business
Systemic risks for poor entrepreneurs of either gender
Risks associated with entrepreneurship do not stem from entrepreneurs' incompetence [only]. The risks accrue from:
- ill regulated local economies that make entry of small businesses (let alone micro business) extremely difficult,
- underdeveloped local supply chains in an underdeveloped local economy that make it difficult for micro- or small-entrepreneurs to access cheap and good quality raw material,
- practically zero [useful] institutional support from the government toward financing / skill development / information about equipment and industry,
- minimal to zero financing from banks (with a resultant glut of moneylenders and micro-finance institutions that charge an extraordinary amount of interest),
- extremely complicated business regulatory procedures for just starting up a business, let alone for getting subsidies
- unbelievably terrible infrastructure (seriously, a thriving business ecosystem really needs electricity, clean water (or just running water), basic sanitation/health/hygiene (just to you know, stay healthy and even just stay alive so one can be entrepreneurial), accessible transportation so entrepreneurs can be connected to local/regional market centres)
Social and Household Barriers for Poor Women Entrepreneurs
On top of all these barriers to business at the bottom of the pyramid, there are specific barriers for women who want to be self-employed:
- it's difficult for them to balance household responsibilities with any work responsibilities; these are the women who do the nanny work or housemaid work that enable middle and upper class women to go out and work. Who does the domestic chores in a maid's house?
- there are few functional, safe creches for the very young children of these women. One could argue that this is a problem for working women of any class. But naturally the problem here is that these women have absolutely no finances left over to procure any services that reduce their childcare time commitments.
- social taboos are many, especially for women from certain cultural or geographic groups. During our work with women entrepreneurs, we have heard a lot about their social battles. They are gossiped about in their neighbourhoods, their families put pressure on them to quit, and instances of petty spite (in one case, our project participants complained about how they found their plastic folders - in which they carried training and accounts notes - cut up into bits) abound.
- the woman has some financial support: she and her spouse are jointly starting an enterprise / she is relatively better off so she has some funds to pursue her interest in creating a supplementary source of income (for herself or for her household)
- the woman is ultra-poor and unwilling/unable to do "menial" jobs: the woman may have been abandoned by her husband, or widowed / physically inability/social taboos/mental unpreparedness prevent her from doing housemaid or construction labour work (two livelihood options typically pursued in this local context by very poor women).
- the woman has a strong social network: this can be a woman from categories #1 and #2, or a woman from category # 4, but she has a set of close friends (typically women) who have either formed a savings group / have been educated by NGOs about bank or microfinance loans / together applied for group loans under various self-help group schemes. Such groups could have formed because of community dynamics, or because of mobilisation by NGOs and municipal government workers.
These are observations that sum up my understanding of the [micro/small scale] entrepreneurship development scene here where I currently work. In my next post I shall analyse the implications of these observations, particularly with respect to the problems of targeting only those groups that meet certain eligibility criteria.