A NEED TO REDEFINE WOMEN'S ENTREPRENEURSHIP IN INDIA

Relooking at the definition in the Indian Context.

“मैडम जी, मुझे कभी-कभी लगता है कि आप हमें बोलती हो कि हम उद्यमी नहीं हैं। हम तो कृषि करते हैं। पर मैं तो घर में उगाकर खाती हूं। आप तो फिर भी बाहर से खरीदते हो। ये पैसे जो मैं बाहर नहीं खर्च करती, उसे मैं दूध या बकरी पालन के व्यवसाय में लगाती हूं। तो आप उद्यमी क्यों और मैं क्यों नहीं?”

- ग्रामीण उद्यमी, महाराष्ट्र

"Madam, sometimes I feel like you tell us that we are not entrepreneurs. We are farmers. But I eat what I grow at home while you still buy from outside. The money I save by not spending outside, I invest it in the business of dairy farming or goat rearing. So why are you an entrepreneur and why am I not?"

- Rural Entrepreneur, Maharashtra.

They say some interactions change your life. This one interaction changed mine when I was doing an FGD with some rural women entrepreneurs in Maharashtra.

After 17 years of experience in the social impact space and specifically Rural India, the one statement of this women entrepreneur - was like a slap in the face on what's missing for the women entrepreneurship ecosystem in India - Its defining women entrepreneurs.

What is a women-led enterprise?

As per a recent study by NASSCOM, women entrepreneurship in India has increased from 8% in 2014 to nearly 14% by the end of the COVID period. But is this number right?

This number is based on a survey that has categorized women entrepreneurs as one who:

1. Holds over 51% of the company or controls operations of the company

2. Has one or more employees

3. Has taken investment or raised money from some source

This definition, widely used by most of us in the development sector, public policy spheres, financial institutions and microfinance agencies, was possibly influenced by the silicon valley and unicorn rush definition of an enterprise.

While it may work for a large part of urban Indian enterprises led by women it will not work for rural India.

Why will it not work for Rural India?

This definition presently does not cover the women entrepreneurs you see in every village- in small Kirana shops, in farms, and in small home-based businesses.

Impactree’s experience of working with over 70,000 women entrepreneurs across the country in Rural India has led us to realize why the formal definition of a woman entrepreneur will not be applicable to rural women entrepreneurs. Let us analyze each of the points above:

Definition 1 - Control over the operations of the company.

Women run a collection of businesses in the line of formal and informal. Mostly these businesses are supported by their family members and hence control will always be shared.

In over 86% of the cases, women entrepreneurs run multiple businesses with the support of their families.

In most small farmer households, agriculture is the primary business that is run by the family together. Small seasonal and trading businesses including dairy, vegetable stores, supermarket stores etc are run by women throughout the year in parallel. These businesses often build across the agricultural value chain:

Farming - Agro-processing - Retailing produce - Animal husbandry (Depending on religious and cultural beliefs).

This, to them, is building up a value chain.

The agriculture value chain-related businesses are challenged by climate unpredictability, diseases, natural calamities etc. In such scenarios, for entrepreneurs dependent on them for income, resilience comes from two major factors.

1. Communities and their families who are an integral part of the business

2. Multiple business lines linked to agriculture – allowing them to continue certain business streams if others don’t work.

De-risking is a natural tendency for women as she comes from a point of view of sustainability for the ecosystem both at home and outside.

Definition 2- Has one or more employees

In our experience working with women entrepreneurs with not-for-profits across the country, where we did a longitudinal study with 300+ women entrepreneurs in agricultural value chains over 3 years we have found that women enterprises grow in a bell curve.

a) In the first two years, they initiate one or two more enterprises across the agricultural value chain. Like any other entrepreneur, they try different options to see what works, but with the predictable backup of agriculture that they are comfortable with.

b) Towards the end of the second year, women start consolidating their enterprises. Here they will work on coming down from two to three enterprises to one.

The decision on one enterprise is generally governed by the family's participation in these businesses.

While balancing personal and professional needs, women need to include growth in their businesses with the key outlook of balancing personal goals. Having family members like daughters, husbands, sons, and mothers-in-law in their business is crucial as it will give them a sense of reliability and also allow them to balance personal and professional goals.

Increased family participation can also result in consolidating and scaling these multiple businesses where possible. They generally land up outsourcing those businesses with friends and communities where they are doing it for social return versus economic returns.

We have seen that family businesses are often by design and not by accident. It is taken with a decision to grow sustainably and also balance social and economic needs, which is why, in the early stages, measuring external employees as a sign of success does not make sense.

Measuring economic opportunity cost will be a better measure of woman's entrepreneurship.

Definition 3 - Has taken investment or raised money from some source

The financial system and its metrics presently are not designed for women to raise capital.

Why? Because even educated women like me have invested our early money and even our family money back into our business. We have financial savings but rarely have land and property which qualifies as collateral or net worth. Recently, even with 2 higher educational degrees and legal and financial statements, I struggled to get bank loans due to a lack of physical collateral in my name. This, even though, we have a business model which is clearly showing financial results year on year with over 100% growth.

While women entrepreneurs are able to build enterprises with investment from family sources, they find it genuinely hard to raise capital from other sources. Hence factoring into account, investment from family sources and their share in the business is equally important while defining a woman-led enterprise.

What needs to be done :

This brings us to the point that maybe the definitions need tweaking to see the true story of women's entrepreneurship in the country. Some changes could be

a) Recognize production and agriculture as a part of Entrepreneurship – Women are mostly field workers in Agriculture. By not including them as an entrepreneur and defining them as subsistence agriculture work – we are doing grave injustice to the grain producers in this country

b) Working on getting women to lead – While we have done a lot of work through not-for-profits in getting women legal and land rights. We now need to build their capacities to lead in family lead businesses. Once women are recognized not as cogs but as equal wheels in the system they will lead the business themselves.

c) Recognizing family business – We all are family businesses - from leading business houses like Adani, Reliance, Mahindra, Aditya Birla, etc. Even in America large business houses like Walmart, Ford etc started as family businesses, but have built a formal professional structure over the years. Recognizing this base and working on expanding the same towards professionalism could be the next leap when it comes to making gender-based enterprises work in the country.

d) Recognize the role of communities in business – Recognize that India does business within the boundaries of communities and social dignity. Measuring social and cultural influencers aligning with economic progress is important.

In our next article we will dig deeper into detailing social parameters which were used in a programme we co-implemented with the US State Department, Swayam Shikshan Prayog and Aspire for Her called Netri - Getting Women to lead in traditional value chains.