Post on 31-Oct-2019
CHAPTER – I
INTRODUCTION
Entrepreneurship plays an imperative role in the growth of any society.
Development of entrepreneurship culture and qualitative business development
services are the major requirements for industrials growth. Entrepreneurship
emerges from an individual’s creative spirit into long-term business ownership,
employment creation, capital formation and economic security. Entrepreneurial
skills are essential for industrialization and for alleviation of mass unemployment
and poverty.
1.1 Women Entrepreneurship
Today, women in advanced market economics own more than 25 per cent
of all businesses and women-owned businesses in Africa, Asia, Eastern Europe
and Latin America are growing rapidly. In some regions of the world,
transformation to market economy, women entrepreneurs is a growing trend.
However, in India, the actual participation of women on income generating
activities is quite unsatisfactory, only eight per cent of the small scale
manufacturing units are owned and operated by women (Sumangala Naik, 2003).
Women entrepreneurship is the process where women organize all the
factors of production, undertake risks and provide employment to others. The
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definition of women entrepreneurship has never been differentiated on the basis of
sex and hence could be extended to women entrepreneurs without any restriction.
According to Medha Dubhashi Vinze, (1987) a women entrepreneur is a
person who is an enterprising with an eye for opportunities and an uncanny vision,
commercial acumen, with tremendous perseverance and above all a person who is
willing to face risks with the unknown because of the adventurous spirit she
possesses.
Empowering women is a challenge. Micro enterprises in rural area can help
to meet these challenges. Micro-enterprises not only enhance national
productivity, generate employment but also help to develop economic
independence, personal and social capabilities among women. Economic
empowerment of women by micro entrepreneurship led to the empowerment of
women in many things such as socio-economic opportunity, property rights,
political representation, social equality, personal right, family development,
market development, community development and at last the nation development.
1.1.1 Women Entrepreneurship in World
Entrepreneurship development among women can be considered a possible
approach to economic empowerment of women. Human resources and technology
are the two important factors of growth in new economic order. To activate these
two factors require entrepreneurship development in a big way in an economy.
Entrepreneurship and economic development have been found as positively
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correlated variables in various research studies conducted in different nations. The
growth of developed economics may be attributed to a large extent to the growth
of their entrepreneurship. Further, the growth of women entrepreneurship has been
relatively high in developed nations as compared to developing countries.
Women-owned enterprises represented nearly 40 per cent of the business firms in
the United States employing nearly 27.5 million people. It has been seen that
women out numbered men by two times, particularly when it comes to starting
new businesses in China during recent years. At present, there are over five
million women entrepreneurs constituting one fourth of all the entrepreneurs in
China. In Latin America, women constitute 15 to 20 per cent of all employers,
concentrated largely in the commercial and service sectors (Reyazuddin, 2010).
1.1.2 Women Entrepreneurship in India
Since ages India has been men-dominated country. But, time is changing
now. Women in India have outraged the fact that since hundreds of years they had
been following the orders of men. They now know their rights and duties and with
the spreading awareness amongst the women they are now no less than the men.
They are walking with men at the same pace in each and every field.
Following this latest trend, women are no less and backward any more.
Many women have established their own economy i.e., entrepreneurial empire and
are now ruling their world as they wished to. The hidden entrepreneurial potentials
of women have gradually been changing with the growing sensitivity to the role
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and economic status in the society. Skill, knowledge and adaptability in business
are the main reasons for women to emerge into business ventures.
"Women Entrepreneur" is a person who accepts challenging role to meet
her personal needs and become economically independent. A strong desire to do
something positive is an inbuilt quality of entrepreneurial women, who is capable
of contributing values in both family and social life. This is great news. But, a part
of women in some parts of the country still do not know their power. They don't
know that they can break the domination over men and move on, walk on and
fight for their freedom. They can live like princess in their own Disney world.
1.1.3 Women Entrepreneurship in Tamil Nadu
Traditionally, Tamil Nadu is one of the well-developed states in terms of
industrial development. In the post-liberalisation era, Tamil Nadu has emerged as
one of the front-runners, by attracting a large number of investment proposals. It
has been ranked as the third largest economy in India. But the Government’s
efforts come only from 1970 onwards for the promotion of self-employment
among women.
In Tamil Nadu each city has its own set of products that are manufactured
by women entrepreneurs using indigenous skills. Most of these products are made
with locally available materials and the skills available in production are seldom
found in other cities. Through traditional activities like production and sale of
domestic items such as garments have been taken up by women since long
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entrepreneurship on the modern lines has been found in industry and trade and
service concerns only for the last one decade or so.
The modern Tamil Nadu women is different from the housewife of past, to
whom selling or running a business carried a stigma which she found difficult to
shake off. Women entrepreneurs in Tamil Nadu possess organizational abilities,
marketing skills, entrepreneurial skills and efficiency and novel ideas. Many
women have vaulted the barriers of conditioning and reaped the rewards of a
globalizing economy. According to Lakshmi V. Venkatesan (2004), Founder
Trustee of Bharatiya Yuva Shakthi (BYST), “women in Tamil Nadu are the best
entrepreneurs in the country; they have shown that they could make excellent
entrepreneurs if they get support by way of finance and guidance”.
The government has implemented various schemes to Youth, Self-Help
Groups, Minorities and Weaker sections of the community. One such novel
scheme introduced by the former Chief Minister of Tamil Nadu in the name of
five lakh (Ramesh Kumar, 2011) Women Entrepreneurship Development
Programme is worth mentioning here. The objectives of Women Entrepreneurship
Development Programme (WEDP) under this scheme are to promote economic
activities among the SHG members through skill training, Women
Entrepreneurship Development, credit linkage and market support. Under the
scheme, every year one lakh self-help group women have availed Women
Entrepreneurship Development Programme through TCDW, DRDA and SHPI for
setting up of micro enterprises.
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1.1.4 Women Entrepreneurship Promotional Activities in Tirunelveli
District
In Tirunelveli District, Tamil Nadu Corporation for Development of
Women (TNCDW) was started in 1999 which aims at the socio-economic
empowerment of women. As per prelude, the corporation in implementing the
Mahalir Thittam among poor women to promote saving habits, nurture
entrepreneurial skills and aptitudes, promote exposure to banking transactions and
to free them from the clutches to local moneylenders.
Training is a very important component of the nurturing and strengthening
of the SHGs. In the pre-formation stage training is required to put the SHGs on the
right track. Training is also required in the stabilization stage to make the group
viable enough to work independently. Micro enterprises require some
entrepreneurial skills some of these can be acquired through training progarammes
like EDP. Government and NGOs have to motivate women to undergo these
training programmes so as to develop their entrepreneurial skills and capacities.
Specific trainings in manufacturing and service sector are available for the
prospective women micro entrepreneurs in Governmental as well as in NGOs.
In Tirunelveli District, Tamil Nadu Corporation for Development of
Women (TNCDW) has been implementing women entrepreneurship development
programmes to Self-Help Groups under the Mahalir Thittam. The following table
shows the year-wise distribution of SHGs women participants in various training
programmes, Tirunelveli District.
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Table: 1.1 - Year-wise Distribution of SHGs Women Participants in
various Training Programmes, Tirunelvli District
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One of the important motivations of promoting the self help group is to
promote the women entrepreneurship in the urban-rural areas. So the government
and NGO offer many training programmes for developing their SHG women
entrepreneurship skills. The above table showed the number of self help groups
members who got training under various training programmes during the period
2001- 2010. It clearly shows the declining trends of training participants. The
major reason for that is the government has declined their fund for providing this
kind of training programme. In 2001-02 5,685 self help groups members got the
entrepreneurs’ training. In the year 2004-05 large number of SHG members got
the entrepreneurs’ training. Nearly 6,191 people got the training, among which
1,918 members belong to Hanuman River Project. These people were from
Shenkottai, Thenkasi and Kadaiyanallur. Because during that period government
acquired the land from the above mentioned area for constructing the dam. So they
provide special training programme to those SHG’s members and gave
explanation about that project. In the year 2007-08 lowest SHG members i.e., 412
got the training. Under different kind of training programmes many members
were trained through the Entrepreneurship Development programme (EDP).
27,533 members were trained through that programme. Next to the EDP, large
members (4,572) got Vocational Training Programme (VTP) and (3,920) Skill
Training. Only 24 SHG’s members got trained through vocational skill training
programme.
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1.2 SHGs, the Source of Women Entrepreneurs
The Origin of Self-Help Group can be traced from Grameen Bank of
Bangladesh, which was founded by Mohamed Yunus who got noble prize award
for peace. SHGs were started and formed in 1975 (Gunasekaran, 2010). In India,
NABARD initiated SHGs groups in 1986-87.
A self help group is a small voluntary association of poor people preferably
from the same socio-economic background. They come together for the purpose of
saving their common problems through self help. The number of members in one
SHG does not exceed 20. The groups have been recommended to be informal to
keep them away from bureaucracy, corruption, unnecessary administrative
expenditure and profit motive. The size is limited to 20 because any group larger
than this would need to be registered under the Indian legal system (Surender and
Manoj Kumar, 2010). These groups are expected to foster true democratic culture
where the entire members participate actively by taking part in the debate and
decision – making process, which is possible only in small groups. Groups are
expected to be homogeneous so that the members do not have conflicting interest
and all the members can participate freely without any fear. The following are the
main aims of SHGs (Dhiren Vandra, 2010).
1. To provide saving mechanism and develop cost effective credit delivery
system at gross root levels to poor who have no access to the formal
financial institutions.
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2. To equip the members with basic skills and knowledge required for
understanding and operationalising transactions the groups through
capacity building programmes.
3. To provide forum for members for discussing their socio-economic
problems.
4. To develop decision making capacity and leadership qualities among
members.
5. To generate awareness among the members about the ongoing development
programmes into the area.
6. To enable its members to become self dependent and self reliant.
7. It is offered for creating self-employment for income generating activities.
In one line, SHGs can be stated as, “a plan by the people, of the people and
for the people” reflecting real people, participating in the developmental process at
micro level (Khare, 2007).
In Tamil Nadu, The SHG approach was started in a small way in
Dharmapuri District in the year 1989 with the assistance of International fund for
Agricultural Development. Later the scheme was extended to the east while Salem
and South Arcot district in the year 1991-92 and further extended to Madurai and
Ramanathapuram in the year 1992-93.
Self Help Groups (SHGs) are a viable alternative to achieve the objectives
of rural empowerment (Lakshm, 2010). SHG plays a pivotal role in social
transformation and social economic betterment of rural women. Unlike, a city
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level, where scope for employment is abundant, Tamil Nadu is a drought prone
area where people cannot depend purely on agriculture all through the year.
Moreover, Tamil Nadu is based on its agro-economic climate conditions. Thus
non-farm activities like handicrafts, rope making, embroidery, catering services,
repair shops, soft drink stalls etc., give immense scope for women to earn their
livelihood when they do not have income through agricultural activities. Banks in
association with NGOs give training to SHG members in all these activities. The
government of Tamil Nadu encourages the SHG activities and marketing of their
products.
A woman as an entrepreneur is economically more powerful than as a mere
worker because ownership not only confers control over assets and liabilities but
also gives her the freedom to take decisions. Through entrepreneurship
development a woman will not only generate income for other women in the
locality, but also will have a multiplier effect in the generation of income and
poverty alleviation.
1.2.1 SHGs in Tirunelveli District
Over the past 10 years, nearly one million SHGs have been formed in India.
The SHGs have been increased with almost 80 per cent (Gunasekaran, 2010) in
South India especially in Tamil Nadu and Kerala. There has been an exponential
growth in the number of SHGs from the year 2005. The enrolment rate of women
in the SHGs is increasing due to so many reasons. Most of the members joined in
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SHGs to improve their socio-economic conditions, and employment opportunities
etc., the basic reason for the emergence of SHGs are to make women to be
independent. Next, NGOs involve themselves to create awareness about the SHGs
among the women over the past 10 years. 18,985 SHGs have been formed in
Tirunelveli District. The following table shows that the year-wise SHGs formed in
Tirunelveli District during 1999-2010.
Table: 1.2 – Year-wise Groups Formed: Details in Tirunelveli District
Year Groups Members
1999-00 821 14,391
2000-01 2,147 37,797
2001-02 1,598 30,532
2002-03 951 17,645
2003-04 1,971 35,078
2004-05 1,330 23,150
2005-06 5,050 86,054
2006-07 820 13,574
2007-08 1,397 409
2008-09 900 13,487
2009-10 2,000 28,057
Total 18,985 3,00,174
AAGR 11.11 9.82
Source: Tamil Nadu Corporation for Women Development, Tirunelveli District.
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The Table 1.2 shows the information for the past ten years about the self
help group formed in Tirunelveli district. In the year 2000-01, 2,147 self help
groups were formed. In the year 2005-06 maximum number of groups i.e., 5,050
self help groups were formed. During the period of 2009-10, 2000 groups were
formed. During the last ten years totally 18,985 groups were formed in Tirunelveli
district. The number of people joined in the self help groups also increased. In the
year 2000-01, 37,797 people joined in self help group, in the year 2005-06 greatest
number of people joined in the self help group, in that year 86,054 people joined.
During the past ten years 3,00,174 people joined self help groups in Tirunelveli
district. The annual average growth rate of SHGs, and members are 11.11 per cent,
9.82 per cent and respectively.
The table 1.3 gives the block wise SHGs formed Details in Tirunelveli
District (2010). Palayamkottai block having higher self help groups. During the
past ten years, the number of SHG of this block was 2,941, next to Palayamkottai.
Ambasamudram and Vallioor block show the higher number of SHGs. The
number of SHG was 1,612 and 1,347. Kuruvikulam block shows the lowest
number of SHGs; the SHG was only 441 blocks showed. The total number of self
help groups in the past ten year in Tirunelveli was 18,985.
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Table: 1.3 – Block-wise SHG’s Formed Details in Tirunelveli District
(2010) Sl.No
Name of the Block
No. of SHGs No. of Members
1 Alangulam 1,014 15,987
2 Ambasamudram 1,612 25,589
3 Cheranmahadevi 1,015 15,747
4 Kadayanallur 734 11,835
5 Kadayam 818 12,564
6 Kalakad 834 13,214
7 Keelapavoor 825 12,886
8 Kuruvikulam 441 7,156
9 Melaneelithanallur 445 6,764
10 Manur 833 13,302
11 Nanguneri 673 10,404
12 Palayamkottai 2,941 45,923
13 Pappakudi 1,065 16,138
14 Radhapuram 1,210 20,228
15 Shencottai 768 11,828
16 Sankarankovil 747 12,386
17 Tenkasi 914 14,062
18 Valliyoor 1,347 22,058
19 Vasudevanallur 749 12,003
Total 18,985 3,00,174
Source: Tamil Nadu Corporation for Women Development, Tirunelveli District.
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1.3 Models of SHG
There are three models to provide micro loans to the SHGs from external
sources. They are as follows.
Model I: SHGs Formed and Financed by Banks
SHG formed directly by banks under this model, the banks themselves act
as SHPIs in forming and nurturing groups, opening their savings accounts and
providing them with banks credit.
Figure: 1.1 - Model I - SHGs Formed and Financed by Banks
Forming and Nurturing
Savings
Credit linked to Savings
Members
Model II: SHGs Formed by NGO and Directly Financed by Banks
In this model NGO would organize the poor in to SHGs, under take training
for awareness building, entrepreneurship and skill training, help in arranging
inputs, extension and marketing, introduce saving and internal lending, help in
maintenance of accounts and link them with the banks for credit requirements.
Banks directly provide loans to SHGs with recommendations of the NGO. In this
model NGO act as facilitator.
Bank
SHG
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Figure: 1.2 - Model II - SHGs Formed by NGO and Directly Financed
by Banks
Forming, Nurturing
Monitoring
Credit linked to Savings
Savings
Members
Model III: SHGs Financed by Banks Using NGOs as Financial
Intermediaries
In this case, besides acting as facilitator, the NGO also works as financial
intermediary. Here the loan is given to NGOs by the bank for lending the
SHGs/individuals. In this linkage model NGO would be legally responsible for
repayment, and would bear the risk of non-payment. Involvement of NGOs in
micro-credit system would have positive influence as they are grass-root agencies,
with good information about borrowers. Thus, adverse selections and productions
of recovery could be avoided. At the same time NGOs would be in a position to
help rural/urban poor, particularly women to bring them above poverty line and
create rural/urban employment.
NGOs, Federation
of SHGs
BANK
SHGs
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Figure: 1.3 - Model III - SHGs Financed by Banks Using NGOs as
Financial Intermediaries
Forming, Nurturing,
Monitoring
Wholesale Credit
Credit
Savings SHG
Members
This SHG- NGO-Bank integration is very much essential to credit delivery
for self-employment and other business activities which could be as effective
vaccine against poverty. The ultimate goal of this linkage programme is not just
promotion of SHGs but the focus is poverty eradication through income
generation.
1.3.1 SHGs – Bank linkage in India
The micro finance program in India emerged in the 1970’s to provide poor
with access to credit. It has become responsible to fulfill the small financial needs
of the core poor of the society. This program has broken the centuries old social
NGO, Federation
of SHGs
BANK
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customs of seclusion of people and highly successful in bringing them to the near
main stream. To support that micro finance can be an important tool to fight
poverty; the Unitated Nations declared 2005 to be the international year of micro
credit. Poverty alleviation is considered to be socially desirable goal in any
developing country. The inclusive micro finance policy where in the core poor
have can easy access where the poor could access savings, credit, insurance and
other services is making the core poor to come art of strong clutches of poverty
hold.
In India, (Laxman B. Bahir, 2010) Andra Pradesh, Uttar Pradesh, Tamil
Nadu and Karnataka lead the country in SHGs. these four states accounted for
two-thirds of the SHG credit linkages with Andhra Pradesh alone accounting for
40 per cent. Of these four states, only Uttar Pradesh had a higher poverty ratio
(31.15%) than the national average of 26.1%. Some of the factors identified for the
outstanding performance of Andhra Pradesh in the SHG-bank linkage program
were the following: (a) Forty percent of the SHGs that were credit linked under
Development of Women and Children in Rural Areas (DWCRA) were
concentrated in Andhra Pradesh alone. (b) 2700 groups were promoted in that
state under a special project sponsored by United Nations Development Program
called South Asia Poverty Alleviation Program. (c) The credit movement in the
south led to the evolution of community based development finance institutions,
which were composed of SHGs promoted by NGOs or by district rural
development agencies. (d) District collectors, NABARD district development
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managers, and lead bank managers profoundly supported the SHG-bank linkage
program in the state. (e) Leading NGOs in the microfinance sector in India, like
Mysore Resettlement and Development Agency (MYRADA), Society for Helping
Awaking Rural Poor through Education (SHARE) and Bharatiya Samruddhi
Investments Consulting Services Ltd. (BASIX), were also working in Andhra
Pradesh. Among all the states of India, the Human Development Index is lowest in
Uttar Pradesh. Credit links here were facilitated by Uttar Pradesh Land
Development Corporation, which is implementing a World Bank–aided Land
Development Program with the component of organizing the rural poor as SHGs.
The other two states, Karnataka and Tamil Nadu, in south India were
supported by large sized NGOs like MYRADA and SHARE. As these NGOs had
greater creditability it enabled them to leverage bank finance easily. Moreover, as
the microfinance movement had “originated” in South India, the awareness and
acceptability of the program was relatively higher. Kerala, Maharashtra, Orissa,
West Bengal, Gujarat, Madhya Pradesh, Rajasthan, and Bihar together had 23.6%
of SHG linkages while the remaining states and union territories had only 1.47%.
Rajasthan, Meghalaya, Orissa, Bihar, West Bengal, Madhya Pradesh, and Gujarat
have been identified by NABARD for having higher potential of increasing SHG
outreach. In general the lower credit linkages in some of these states can be
explained by a lack of concentrated efforts by banks; the inability of banks to
identify NGOs with savings and credit groups; a lack of motivation among
bankers; a lack of large sized NGOs with previous background working with
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SHGs; and the unsuitability of the approach to the region Thus the SHGs - Bank
linkage program has surely emerged as a dominant micro- finance dispensation
model in India.
1.3.2 SHGs – Bank linkage in Tamil Nadu
Tamil Nadu has become the third largest state after Andhra Pradesh and
Uttar Pradesh in the self-help group (SHG)-bank linkage programme launched by
the National Bank for Agriculture and Rural Development (NABARD).
In the state, 209,197 (Narasimhan, 2012) SHGs were credit linked with a
financial assistance of `2,791.65 crore in 2009-10, taking the cumulative number
of SHGs credit linked to 852,791 (including repeat doses) with a bank loan of
`9,394.70 crore. NABARD said that a pilot project on SHG-Post Office linkage
was successful and that additional revolving fund assistance (RFA) of `2 crore has
been sanctioned to the department of Posts for lending to SHGs. Most banks were
lending to Microfinance Institutions (MFIs) for expanding their SHG portfolio,
since MFIs provide faster financial access to the SHG clientele with cheaper
delivery costs. NABARD estimates that more than 1,500 NGOs are involved in
SHG-bank linkage programme. The programme should now focus on its
sustainability by encouraging promotion of micro enterprises and activity-based
groups and SHG federations among mature SHGs.
It recommends special training programmes for skill development/skill
upgradation for SHGs to equip them to set up micro enterprises. This would help
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correct the regional imbalance or uneven growth in various districts and to ensure
comprehensive coverage of the entire rural poor under the SHG fold, it said. In
areas where bank linkage is weak or non-existent, it said bulk lending or RFA to
MFIs or NGOs was being considered and RFA to the tune of `424.60 lakh
(cumulative) has been sanctioned to 10 agencies in Tamil Nadu so far. The amount
released and outstanding as of October 2009 was `4.23 crore and `2.32 crore
respectively. Table1.4 given below shows the details of credit availed by SHGs in
Tamil Nadu
Table: 1.4 - Progress of SHGs-Bank Linkage in Tamil Nadu
Sl.No Year Bank loan(`. crore)
1 Upto 2001 120.30
2 2001-02 97.91
3 2002-03 184.65
4 2003-04 271.32
5 2004-05 490.62
6 2005-06 600.44
7 2006-07 593.45
8 2007-08 804.70
9 2008-09 2,174.57
10 2009-10 2,791.65
Total 8,129.61
Source: WWW.tamilnaduwomen.org
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Tamil Nadu is one of the important states which progressively supported
the self help groups’ activity by providing huge amount of loan. Except the year of
2006-07, the loan provided for the self help groups increased over the period of
time. Up to 2001 self help groups get only `120.30 crores. It has increased over
the period of time. In 2005-2006 it was `600.44 crores it falls slightly on 2006-07
the amount was `593.45 and it increased `.2791.65 crores in 2009-2010.
1.3.3 SHGs-Bank Linkage in Tirunelveli District
The SHG-Bank linkage programmes was introduced in 1992 as a
mechanism to provide the poor in rural areas, at their doorstep easy and self
managed access to formal financial services. Self Help Groups have got financial
support from various financial institutions such as Nationalized Banks,
Commercial Banks, Private Banks, and so on. NABARD is one of the nationalized
banks, which has given special importance to promoting Self-Help Groups
activities.
Credit plays very important role in the lives of the poor in a developing
economy. The majority of the poor population is left with an inadequate resource
base for production. In the rural areas activities like weaving, handlooms, fiber
cutting etc. is undertaken through these activities. Standard of living increase and
it generates the employment opportunities.
Micro-Finance is a financial service of small quantity, provided by
entrepreneurs, particularly SHG women entrepreneurs, from low income
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households. These loans are generally offered without any collateral. Micro
Finance is a provision of thrift, credit and other financial services and products of
very small amount to the poor in rural/urban, As a result, micro entrepreneurship
is gradually growing to importance among the jobless, particularly among the
educated and uneducated urban and rural women. As on 31st March 2010,
(TNCDW, Tirunelveli District) NABARD’s loan of `24,243.30 Lakhs more
availed of by 20293 SHGs from banking system in Tirunelveli District.
Table: 1.5 - Progress of SHGs-Bank Linkage in Tirunelveli District
Sl.No Year No. of SHGs Loan Disbursed
(`in lakhs)
1 2000-01 309 53.03
2 2001-02 824 176.10
3 2002-03 829 348.65
4 2003-04 2,132 1528.98
5 2004-05 671 1,584.82
6 2005-06 4,182 3,807.00
7 2006-07 1,201 1,245.30
8 2007-08 1,884 1,306.29
9 2008-09 4,349 7,713.94
10 2009-10 3,847 6,471.90
Total 20,293 24,243.30
AAGR 88.41 122.45
Source: Tamilnadu Corporation for Development of Women Ltd., Tirunelveli
District.
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The above table clearly shows, in Tirunelveli NABARD’s loan distributed
among the Self-Help Groups have increased over the period of time. In the year
2000-01 only 309 Self-Help Groups got the financial support from the NABARD.
It increased 2,132 Self-help groups in 2003-04 and 4,349 groups in 2008-09. It
also illustrates that, the amount of loan distributed among the Self-Help Groups
also increased over the period of time. In the year 2000-01 the amount of loan was
`53.03 lakhs. It increased to `1,584.82 lakhs in 2004-05 and `7,713.94 lakhs in
2008-09. The number of benefited Self-Help Groups and the volume of loan
distribution among the groups are subjected to fluctuation over the period of time.
The annual average growth rate of Self Help Group formation is 88.41
during the study period. The annual average growth rate of bank loan disbursed is
122.45 per cent during the study period.
1.4 NGOs, Intermediaries of Women Entrepreneurship
NGOs have emerged as a key player in the field of micro credit. They have
played the role of intermediary in various dimensions. NGOs have been active in
starting and participating in SHG women entrepreneurs. This includes creating
awareness of the importance of micro-credit within the community, as well as
various national and international donor agencies. They have developed resources
and tools for communities and micro-credit organizations to monitor progress and
identify good practices. They have also created opportunities to learn about the
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principles and practice of micro-credit. This includes publications, workshops,
seminars and training programs.
1.4.1 Origin of Non-Governmental Organization
The concept of NGO (Lekore, 2007) came into use in 1945 following the
establishment of the United Nations Organizations which recognized the need to
give a consultative role to organizations which were classified as neither
government nor member states. NGOs take different forms and play different roles
in different continents, with the NGO sector being most developed in Latin
America and parts of Asia. The roots of NGOs are different according to the
geographical and historical context. They have recently been regarded as part of
the “third sector” or not-for-profit organizations. Although there is contestation of
the definition of an NGO, it is widely accepted that these are organizations which
pursue activities to relieve the suffering, promote interests of the poor, protect the
environment, provide basic social services, and undertake community
development. They should have some following features.
1. NGO should be privately set up sufficiently autonomous in its activity that
is independent of direct governmental control.
2. It cannot be considered a political party with an aim of attaining political
power.
3. NGO should support development which demonstrates its public character.
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According to the estimates of the working groups of NGOs, there are about
30, 000 NGOs in India (Sattanathan, 2005). A rapid growth took place in the
1990s. With the SHG linkages programme introduced in 1989, the NGO sector has
been recognized as a crucial partner recognizing the strengths of the NGOs in
organizing the community and the potential in saving and credit programmes.
The concept of NGO and social welfare are not new India has a glorious
tradition of voluntary organizations. In the pre-independence days, Rabindranath
Tagore in his santiniketan experiments showed how rural development could be
brought about by integration of education and culture. Gandhiji in his Wardha
experiment showed how village industries could bring about the development of
the poorest sections of the people in this country.
After independence too, there was a lot of talk about the role of NGOs and
people’s participation when we started our planning process in the early 50s. The
British Government in India spent minimum resources on social welfare
programmes and voluntary agencies played an important role in developing
programmes for the poor, the destitute, women and children.
1.4.2 NGOs Functions and Advantages
In the last decade, Non-Governmental Organizations (Hedayat Allah
Nikkhah et al., 2010) have gained increased attention among scholars and
practitioners of development. They have become increasingly important agents of
the development process in the countries of the south, in all of their main areas of
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work such as humanitarian relief, long-term development, policy formation and
political advocacy. On the other hand, there is a current view that NGOs constitute
a viable alternative to government as channels of development assistance,
particularly in developing countries, some of the NGOs functions and advantages.
1. They are good at reaching and mobilizing the poor and remote
communities.
2. They help empower poor people to gain control of their lives, and they
work with and strengthen local institutions.
3. They carry out projects at lower costs and more efficiently than the
government agencies.
4. They promote sustainable development.
1.4.3 Role of NGOs in SHG Activities
For more and more participatory role of women and their economic
empowerment women groups - Self Help Groups (SHG) and women Cooperatives
need to be organized in rural areas for production activities, like procurement of
raw materials, their processing, storage, quality control and marketing of finished
products, Department of Women and Children Development and Central Social
Welfare Board assist voluntary organization is encouraged by the Government to
set up production unites creating more employment (Rakesh Prasad, 2007).
Homogeneous groups of 12 to 20 women can form SHG for economic
activities. By making profits and getting loans from the banks, they can link
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themselves through NGOs, and achieve success, SEWA movements in
Ahmadabad (Gujarat) helped in mobilizing self-employed women and providing
support services. DWARCA programme in Periyar District (Tamil Nadu) has
lifted women out of poverty and men-folk are proud of their women having bank
accounts. VARDAN, a New Delhi based NGO is assisting poor farmers and
women of weaker section in Bihar, by providing training in High yielding seed
multiplication, food processing, home crafts and tailoring, etc., Thus SHGs and
NGOs both together can play a vital role in income and employments generating
activities in various agro based industries (Rakesh Prasad, 2007).
1.4.4 NGOs in Tirunelveli District
In Tirunelveli District, 21 NGOs got registered in Tirunelveli District under
TNCWD and are engaged in forming SHGs in all the 19 blocks of the district.
Apart from the above mentioned 21 NGOs about 50 more NGOs which do not
come under the fold of the TNCDW are involved in forming and assisting SHGs.
The district offers immense potential for forming SHGs due to its backwardness.
All the blocks in the district are covered by the NGOs and formation of SHGs is
continuing. Table 1.6 given below shows the details of NGOs in Tirunelveli
district.
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Table: 1.6 – NGO-wise Groups Formed Details in Tirunelveli District
SI.No
Name of the NGO
No. of
SHGs
No. of
Members
1 ARASAN 80 1104
2 ART 704 11150
3 ATSDS 39 604
4 AUSSI 527 8242
5 CAFARD 152 2391
6 CAST 525 8352
7 CODE 959 16496
8 CPE 551 8440
9 GSSS 562 8628
10 IOP 238 3761
11 JPT 695 10458
12 Malarchi 1565 25433
13 RED 57 841
14 RIP 630 10051
15 RRO 1768 27101
16 RVS 494 7922
17 SCAD 1202 18949
18 SISTER 59 740
19 TSSS 1252 19764
20 VIVEK 43 571
21 VMSSS 99 1474
Total 12201
192472
Source: Tamil Nadu Corporation for Women Development, Tirunelveli District.
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There are many NGOs originally started with varying activities. The
researcher has selected four NGOs namely SCAD, AUSSI, CAST, Jana priya
Trust. In the study area, these four NGOs are mainly facilitating in promoting
SHGs women entrepreneurs through entrepreneurship development programme
which is reported by TNCDW. Their activities are mainly:-
a) Awareness generating and motivation of SHGs member.
b) Ensuring prompt repayment of internal loans to build credit worth ness for
external credit.
c) Up gradation of skills of SHG members through relevant training.
d) Improving skill in financial management.
e) Encouraging SHGs to involve in income generating activities and
f) Planning and achieving sustainability of SHGs
Women are encouraged to start micro enterprises that enable them to
develop skill and confidence to earn an income. This is done through self help
groups (SHGs) where women are given training for a variety of income generating
schemes. The SHG enterprises include food processing, garments making, fiber
products and cows, goat rearing etc., NGOs play vital role in upgrading their
skills, product quality, processing bank loans, and finding a market for the
products.
In Tirunelveli District, SHGs have helped women entrepreneurs to earn
income ranging from `1000 to `1500 per month from the economic activities.
Most of the women have opened savings accounts and are able to contribute to the
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household with regular livelihood support. Increase in family income, has resulted
in better standard of living for the whole family. Women have earned respect in
the community and now have a greater say in the family affairs and in community.
1.5 Government Programmes for the Development of Women
Entrepreneurship
The Centre and State governments in India have sponsored various
employment generation and poverty alleviation programmes for development of
entrepreneurship among youth, especially women (Kamala Kanan, 2005). Some of
them are as follows:
a) Prime Minister’s Rozgar Yojana (PMRY)
The PMRY was launched on 2nd
October 1993 with the objective of
providing employment opportunities to educated unemployed youth through
setting up of small-scale enterprises in rural and urban areas. The loans under the
scheme are available to all educated unemployed youth between 18-45 years, for
women who have passed 8th
standard examination for undertaking all
economically viable activities including agriculture and allied activities. This
scheme also provides for preference to weaker sections and women.
b) Swaranjayanti Gram Swarozgar Yojana (SGSY)
SGSY which was initiated in April 1, 1999, is a credit cum subsidy
programme. It aims at establishing a large number of micro enterprises in rural
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areas. The beneficiary families may be individuals or groups (SHGs). In order to
give an impetus to the group, a revolving fund of `25, 000 is provided from banks.
In addition, for individuals subsidy is also provided at 30 per cent of the project
cost subject to a maximum of `7,500. In respect of SCs/STs and disabled persons
subsidy is 50 per cent of the project cost subject to a maximum of `10,000. For
groups of swarozgars the subsidy is 50 per cent of the scheme cost, subject to per
capita subsidy of `10,000 or a total of `1, 25,000 whichever is less. Within the
target groups, special safeguards have been provided to vulnerable sections by
way of reserving 50 per cent benefits for scheduled castes/scheduled tribes and 40
per cent for women and three per cent for disabled persons. It is envisaged that 50
per cent of the groups formed in each block should be exclusively for women.
c) Rural Employment Generation Programme (REGP)
The Government through Khadi and Village Industries commission is
implementing this programme for the promotion and development of agro and
rural industries. Under this scheme, (.Kamalakanan and Namasivayam, 2005) the
KVIC provides margin money assistance at the rate of 25 per cent of the project
cost up to `1 lakhs and for the projects above `10 lakhs and up to `20 lakhs, rate
of margin money is 25 per cent of `1 lakhs plus 10 per cent on remaining cost of
the project. In the case of SC/ST/OBC/ women/physically handicapped and other
special category, the margin money grant is 30 per cent of the project cost upto
`10 lakhs and for projects above `10 lakhs and upto `25 lakh, it is 30 per cent of
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`10 lakhs plus 10 per cent of the remaining cost of the project. Under this scheme
the beneficiary’s contribution is 10 per cent of the project cost. In the case of
SC/ST and other weaker sections, beneficiary’s contribution is five per cent of the
project cost.
d) District Rural Industrial Project (DRIP)
The National Bank for Agriculture and Rural Development is implementing
this programme. The main objective of the project is to generate sustainable
employment opportunities through co-ordinate efforts in financing rural nonfarm
enterprises, creation of essential infrastructure and also enabling promotional
agencies to take up entrepreneurial development, technology up gradation, raw
material supply, marketing assistance and other common service with an area
covering the entire district. The emphases in the project are on provision of timely
and adequate credit support.
e) Support to Training and Employment Programme (STEP) for
Women
It aims at increasing self reliance and autonomy of women by enhancing
their productivity and enabling them to take up income generation activities.
Specific objectives of the STEP are:
i) to mobilize women in small viable groups.
ii) to provide training for skill upgradation.
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iii) to enable groups of women to take up employment-cum-income-
generation programme and
iv) to provide support service for further improving training and
employment conditions of women.
f) Rashtriya Mahila Kosh (RMK)
It was set up in 1993 to provide credit to poor women in the informal sector
for income generation activities through non-government organizations and
institutions, engaged in thrift and credit promotion.
1.6 Statement of the Problem
Unemployment and lop-sided development are the growing problems in
India. To reduce their magnitude, the Government of India encourages the people
to engage in self-employment through various development programmes. Among
these programmes, the most familiar ones are Self Help Groups, micro-credit, etc.
A number of studies have been attempted to evaluate the various development
programmes but only few studies have given an overall view about the role of
SHGs in promoting women entrepreneurship development.
Women’s role in the productive sector has always been dictated by the
economic advancements of the time. Development in the productive sectors over
the decades isolated and cornered women, in one way or the other. The industrial
revolution, thus, brought about a drastic change in the economic life of women.
The pride of place which they enjoyed in the traditional society suffered a setback.
35
They became mere wage earners in the new factory system. Further, to suit the
self motives of the authorities, they were internationally relegated to the role of
‘house wife’ and ‘mother’. SHGs have proved to be an effective tool or instrument
in India to address the problem of unemployment on the one hand and also to
empower women on the other.
In the SHG programme, women are brought together, made to involve in
saving scheme and prompted to create internal resources to meet emergency or
business needs and thus help to do away with money lenders and also promoting
entrepreneurship. While doing so, it focuses on the economic empowerment
leading to social and political empowerment.
It aims in analyzing the socio-economic condition of SHG trained women
entrepreneurs through NGOs. In order to develop the entrepreneurial skills and to
expose the scope of entrepreneurial activities in urban-rural area, an in-depth
study is highly essential. This has provided the motivation for the researcher to
make an in-depth study on the various aspects of the micro-enterprises wined by
women.
Hence, the present study intends to focus on the role of Self Help Groups in
promoting women entrepreneurship in Tirunelveli District and also various skills
gained by women entrepreneurship development training programme and gives
some suggestions for developing the women entrepreneurial skills and also to pave
the way for other women to start new ventures.
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1.7 Problem Setting
Keeping in view the experience of developed nations the Government of
India too initiated various policy measures during the post liberalization period for
the development of entrepreneurship. There has been a special focus on women
through these measures to improve their participation in entrepreneurial related
activities. The government of India has set up a large number of institutions to
provide financial and other support for the growth of entrepreneurship among
women. Post-reform period has also witnessed substantial increase in the
participation of NGOs in entrepreneurship development related activities. As per
one estimate about 9.5 per cent women entrepreneurs are engaged in small
business at present. However, this proportion is quite low as compared to
developed nations. There is a vast scope in the country to improve on this front
within the changed socio-economic scenario, when literacy level among women
has risen. Women are entering into technical education. Their participation in
entrepreneurial activities, however, has not increased with the rate it should have.
An attempt has been made in the present study to assess the various skills gained
by trained SHG women entrepreneurs in entrepreneurship development training
programme conducted by SHGs through NGOs.
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1.8 Chapterisztion of the thesis
The study has been structured into the following chapters;
CHAPTER I - INTRODUCTION
This chapter introduces the concept of women entrepreneurship at different
levels and SHG as the source of women entrepreneurship along with NGOs as the
Intermediaries of women entrepreneurship, statement of the problem and
chapterization of the thesis.
CHAPTER II – CONCEPTS AND REVIEW OF RELATED LITERATURE
This chapter shows various concepts used in the study and a precise review
of the previous related studies.
CHAPTER III – METHODOLOGY
This chapter covers the scope of the study, objectives, hypotheses,
methodology, and limitations of the thesis.
CHAPTER IV - PROFILE OF THE STUDY AREA
This chapter explains the study areas, the demographic features,
infrastructure and others in India, Tamil Nadu and Tirunelveli.
CHAPTER V – ANALYSIS AND DISCUSSION
This chapter deals the socio- economic condition of SHG trained women
entrepreneurs, and evaluate the skills gained through women entrepreneurship
development programme, details of SHG trained women’s entrepreneurial
activities and the economic factors influencing SHG women entrepreneurs in
Tirunelveli district.
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CHAPTER VI – SUMMARY OF FINDINGS, SUGGESTIONS AND
CONCLUSION
Hence the summary of work done, findings of the study, Suggestions, and
conclusion are drawn according to the objectives of the study.