By Bidisha Mondal
Ease of Doing Business for MSMEs: The latest Periodic Labour Force Survey (PLFS) data, collected during 2020-21, hints towards the women entrepreneurs lagging much behind the men entrepreneurs when it comes to establishing market linkages. The gender gap is particularly stark among those who resort to self-employment as a means of deriving subsistence income rather than being motivated by entrepreneurial aspirations.
These subsistence entrepreneurs have been one of the main target groups of the livelihood generation interventions aiming at poverty alleviation. The potential constraints which the subsistence entrepreneurs often face, are both individual-specific like the lack of aptitude, technical and business skills, and social capital, and environmental barriers which include restrictive local business environment and cultural norms, lack of access to financial services and markets. Among all these constraining factors which the livelihood interventions address, the success of the interventions often depends largely on establishing sufficient market linkages.
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The Periodic Labour Force Survey, 2021 reveals that according to the major employment status, 59 per cent of women workforce are engaged in self-employment and among these, 38 per cent are running their enterprises on their own without any hired help and are likely to be subsistence entrepreneurs. Women-led enterprises with hired employees are just one per cent of the total women enterprises.
The subsistence entrepreneurs comprising the own-account workers, are majorly concentrated in agricultural activities in rural areas as approximately 65 per cent of these men and 71 per cent of these women entrepreneurs are engaged in this sector.
In urban areas, women entrepreneurs are spread across more diverse sectors. Forty-three per cent and 25 per cent of the urban women entrepreneurs are in the manufacturing sector and wholesale, and retail trade sector respectively. However, the degree of diversification is relatively less than the male entrepreneurs. For men, the highest share of these activities takes place in the wholesale and retail trade with the share being approximately 37 per cent, followed by the transportation and storage at 13 per cent and manufacturing at 12 per cent.
The women subsistence entrepreneurs in rural areas belonged to even lower income deciles in comparison to their urban counterparts. Although both the men and women subsistence entrepreneurs belonged to relatively older age-cohorts as more than 67-70 per cent of them are above the age of 35 years, the share of entrepreneurs above the age of 60 years was relatively higher among men in comparison to women, both in rural and urban areas.
The latest PLFS round data (2021) collects information on how much of the produce these subsistence entrepreneurs engaged in the farm sector aim to sell in the market.
Although in terms of many individual-specific characteristics which are supposed to influence the entrepreneurial aspirations, scale, and profitability of the enterprises, like the income deciles they belong to, demographic characteristics like the age composition, and the sub-sectors they are engaged in, the men and women subsistence entrepreneurs are almost similar in rural areas. However. when it comes to marketing their products, the situation differs between men and women significantly. In rural areas, 10 per cent of these men entrepreneurs don’t plan to sell any part of their produce and use it for household consumption, the share jumps to 27 per cent in case of women entrepreneurs. Approximately 45 per cent of these men entrepreneurs in rural areas intend to sell more than or equal to 50 per cent of their produce and only 36 per cent of women entrepreneurs plan to achieve so. Fourteen per cent men entrepreneurs in rural areas aim to trade the entire produce and the corresponding share for their women counterparts is only eight per cent.
The urban women entrepreneurs aspire to sell much higher share of their produce than their rural counterparts, but they too are considerably lagging behind their men counterparts. Whereas only six per cent men entrepreneurs in urban areas plan to use the entire produce for own consumption, the share rises up to 13 per cent in case of women entrepreneurs. Approximately 18 per cent men entrepreneurs in urban areas plan to trade the entire produce and the corresponding share is 14 per cent for their women counterparts.
On behalf of the entrepreneur, the plan to trade a certain part of the produce often depends on the available market opportunities. The PLFS, 2021 reveals that women subsistence entrepreneurs end up setting an unambitious target on selling their produce, much less than what their men counterparts aim to sell. This indicates towards the challenge of insufficient market linkages being more acute for the women entrepreneurs as compared to men. The women entrepreneurs in rural areas settle for an even lower goal than their urban counterparts, implying that the challenges to market the products being more severe for the rural women. This might be due to limited market access due to poor road conditions and distance to major markets. Also, for women the gender digital gap, caused by lack of the digital knowledge and access to digital devices, is leading to less awareness of non-traditional market linkages.
Although SHGs have been widely instrumental in providing an integrated package of technical, financial and market linkage assistance to the women subsistence entrepreneurs, their marketing strategies are still at a nascent stage. The challenges faced by the SHGs are often lack of access to a permanent market place, knowledge gap in terms of marketing strategies and sales promotion measures, inaccurate estimation of the market demand leading to inventory pile-up and product passing the expiry date, and poor connectivity in case of far-flung villages. The success stories of SHGs/cooperatives often accrue to fostering efficient market linkages. For example, a key factor behind the enormous success of Okhai, a SHG-based handicraft brand, had been the training and guidance in marketing strategies to make the traditional designs appealing to consumers’ tastes. In case of Lijjat papad, a cooperative initiative, accurate estimation of market demand and correlating production levels with it, played a big role behind the upscaling of their business. Thus, mobilising the women subsistence entrepreneurs into SHGs for appropriate support from the government/NGOs for formulating appropriate market linkages, would yield the desired result.
Bidisha Mondal is the Research fellow at IWWAGE-Lead. Views expressed are the author’s own.