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International Journal of Academic Research and Development

International Journal of Academic Research and Development


ISSN: 2455-4197
Impact Factor: RJIF 5.22
www.academicsjournal.com
Volume 3; Issue 2; March 2018; Page No. 1168-1174

Sustainability of women micro enterprises: The need of the hour


VA Malarvizhi
Ph.D. Scholar, Centre for Rural Development, Annamalai University, Chidambaram, Tamil Nadu, India

Abstract
The SMEs have been recognised as the solution for many economic concerns like employment, income generation and economic
depressions in the society. But the presence or floating of SMEs alone cannot guarantee a solution to the above mentioned
concerns and issues. The challenge is to ensure the sustainability of these SMEs to ensure the long term economic progress. This
study hence is a sincere attempt to study the aspects of sustainability for long term economic progress of the society. This study
undertakes to check the factors influencing sustainability for women enterprises (who have migrated to the city) using the case
study methodology and snowball sampling technique. The inferences from the case studies reveals interesting facts about the
aspects of sustainability with regards to women enterprises. The focus is to study the influencing factors and give suggestions for a
blue print to be replicated by the rural enterprises to become sustainable ones in the long run. Further it discusses how
sustainability leads to women empowerment.

Keywords: sustainability, women empowerment, micro enterprises, challenges

Introduction progress and development through competitiveness on the one


MSME sector is the most prominent and potential arena that hand, and the creation of employment and income
aids the economic progress of the economy. The reason for redistribution as a result of this growth on the other, India’s
this potentiality is that this sector is capable of employment micro, small and medium-sized enterprise (MSME) economy
and income generation. This in turn leads to the economic has been actively promoted for the past two decades since the
empowerment of women., which is followed by social enactment of the MSME Act, 2006. Grammy (2011:2)
empowerment and then finally followed by political believes that SMEs play four major roles in the economy and
empowerment. For empowerment to take place the that they are contributing to the following:
sustainability of micro enterprises is very essential.  Creating jobs
Guy Vincent in his article “Sustainable Micro  Producing new products and services
entrepreneurship” talks about the vicious cycle of poverty  Serving larger corporations
which has inter related factors like low productivity, low per  Providing specialised, innovative products.
capita income, low savings and low capital accumulation.
Economic development is a process of improving the quality For an SME to survive in any marketplace, Sha (2012:2) states
of human lives which consists of three vital aspects like that longevity and sustainability are linked to the age of the
raising incomes and consumption and fostering self esteem business as well as the growth potential of the micro
through factors that denote dignity and respect thereby enterprise. Although SME growth research has received much
increasing individual freedom. attention, of late, no definite theories can explain why some
SMEs are the growth propellers in the economy. SMEs are SMEs grow while others fail (Farouk & Saleh, 2011:26).
crucial for a competitive and efficient economic market. However, it is also demonstrated that younger and smaller
SMEs are critical for alleviating poverty. SMEs play a businesses exhibit the highest growth rates (Phelps et al.,
fundamental role in the under developed and developing 2007:3).
countries. To make all the above roles of SMEs a success For MSME to flourish the prevalent factors that influence the
sustainability is important and the factors that aid sustainability of MSMEs is very crucial. The economic fringes
sustainability should be prevalent. Unless the ideal breeding that the MSMEs bring has been acclaimed globally though the
ground with aiding factors is not existent, the idea of reasons why some MSMEs flourish, while some others perish
sustainability is not possible. In other words, this means if or are dormant is still not fully known. This is where the
there is no sustainability there can be no resultant question of sustainability and the factors that enable
empowerment. Hence there can be no expectation of any sustainability comes to the fore.
economic progress in the long run. Factors influencing Sustainability
In order to achieve the necessary objectives of economic

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Table 1: Environmental factors influencing the performance of SMEs Internal and External environmental factors
Internal Environmental factors
Social Quality level of client’s; secure relationships with clients; and communication channels among employees
Ability to improve products; variety of product and services; possibilities to improve manufacturing process; ability to react to
Environmental
market changes; and ability to introduce innovations
External environmental factors
Macro environment Tax laws
Consumer purchasing power; resource access; obtaining new information; availability of external financial resources; relations
Micro environment
with clients; qualified and skilled labour force; and networking with business partners in the external environment.
Source: Ciemleja and Lace (2011:506)

Background services and are unable to handle multiple projects at the same
Micro enterprises are business units that are primarily time. Amyx (2005). It was shown that larger macro enterprises
managed by the owners with a maximum of 50 employees. were given business for their presence in the industry arena
These are at a high risk zone for there are many risks involved and also for their brand name alone. (Bowen, Morara &
in the functioning of these enterprises which has an uncertain Mureithi, 2009). On the other hand, it was felt that improper
environment that constantly keeps changing. The price is the planning and financing and poor management have been the
value of the goods and services that prevail at some point of major causes for the downfall of SMEs (Longenecker, 2006).
time. The price has a very strong influence the performance of SMEs are the stepping stones of industrialization which have
the enterprises though the prices keep changing often. This been acknowledged by active economies like USA and UK by
can be handled by establishing cordial relationship with the assessing their progress through the development of SMEs.
customers. The term “sustainability” is an extensive one and is Hatega (2007) and Kauffmann (2005) have validated that the
used interchangeably in different contexts. Though the term SMEs cover more than 95% of all firms in Sub-saharan Africa
sustainability implies a continuation of a program in some and their importance cannot be overestimated.
way different emphasis and significance of meaning have It was also found that the Small and Medium Scale
been noted (Rizkallah, 1998). Here the term is used to denote Enterprises are mostly found in the service sector of various
the longevity of the enterprises. The importance of planning economies which in most countries account for two-thirds of
for sustainability right from the inception of any project is employment levels, which is a sizeable chunk of the economy.
mandatory as planning can aid sustainability along with the SMEs have a very vital role in the social, political and
contextual factors. The study was based on the factors economic development of a nation. The SMEs have been the
influencing the sustainability of urban women enterprises in facilitators for reasonably priced goods and services and a
Hyderabad city, Telengana State. These factors are self- source of employment and income for a large number of
motivation, management skills, team work, quality product or people through its active activities (Kauffmann, 2006). Hence
service reasonably priced and training to enhance employee it is but natural for the governments and intermediaries to
skills. The women enterprise under the study are based within show concern for the improved performance of these
Hyderabad. economic enhancers of the society, the SMEs. There is a
The role of MEs is crucial for both the individuals as well as positive connection between the small businesses and the
the nation as a whole from the point of view of employment economic progress in the developed countries which has been
and as well as the standard of living. Nations usually support documented by Harris and Gibson (Harris and Gibson, 2006;
the Macro enterprises which warrant small scale production Monk, 2000; Sauser, 2005). However, studies about the small
and serve limited or closed markets unlike the MEs which business development and its performance cannot be
form part of the larger section (both registered and universally applicable because of the dissimilarities in the
unregistered MEs) and also caters to the general masses. process of the working of the SMEs between the developed
SMEs are a major source of income generators in both the and the developing countries (Arinaitwe, 2002). Though the
developed as well as the developing countries comprising of factors that influence the working of SMEs differ in different
about 90% of the business operations and contribute to about countries, the major factors include availability of business
50% of the employment and GDP (Okafor, 2006). SMEs information, finance accessibility, provision for managerial
contribution towards progress and development is obviously experience and infrastructure accessibility.
acknowledged, but the challenge lies that the SME
entrepreneurs face many hurdles that act as hindrance for the Table 2: showing the overall GDP, employment and exports in India
long-term survival and progress. Further research on small All India
business progress has revealed that the ratio of failure in GDP current price (2014-15) Rs. 114.72 lakh crores
developing nations is much higher than the developed nations GDP constant price 2011-12 (2014-15) Rs. 97.27 lakh crores
(Arinaitwe, 2002). Apart from this concern, these SMEs also Employment (2011-12) Rs. 47.29 crores
face stiff competition from their peer enterprises along with Export (2015-16) $310.30 billion
the macro corporations also participating in the niche markets Source: MSME data book, India
which was once considered as the privilege of the small
businesses (Ntakobajira, 2013). There are many hindrances for The table reveals that the GDP for the year 2014-15 (current
the successful sustenance of SMEs, the major being negative price) of India was estimated as Rupees 114.72 lakh crores
perception towards the SMEs. Potential customers perceive whereas the GDP for the year 2014-15 (constant price) was
that small businesses lack the ability to provide quality estimated as Rupees 97.27 lakh crores. The employment for

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International Journal of Academic Research and Development

the year 2011-12 was estimated as Rupees 47.29 crores This study is an attempt to form a blueprint and replicate the
whereas the export for the year 2015-16 was estimated as same with the rural women enterprises to make them follow
$310.30 billion (MSME data book) the success route and attain sustainability. The findings of this
study can serve as a ready reckoner for existing women
Table 3: showing the share of MSME in the overall GDP, employment entrepreneurs (rural and urban) potential women
and exports in India entrepreneurs, SME heads of villages and towns to help the
Share of MSME enterprises overcome concerns and tread the sustainability
Gross value added current price Rs. 37.79 lakh crores path to success
(2015-16) (32.94%)
Gross value added constant price Rs. 32.43 lakh crores Sociological Theory
(2015-16) (33.34%)
The entrepreneurship arena embraces the social culture as its
Employment (4th all India census of
MSME 2006-07)
Rs. 8.05 crores driving force for entrepreneurship as the sociological theory
Export (2014-15) $138.93 billion background. The society has expectations from every
Employment (2016) Rs. 11.7 crores behaviour and these expectations are based on the religious
MSME units (2016) Rs. 5.1 crores beliefs, taboos and customs prevalent. The entrepreneur tries
Source: MSME data book to perform his entrepreneurial duties based on these
expectations to confirm with the existing norms. It was held
The table projects the share of MSME in the gross value that religion was a major driver for entrepreneurship and stress
added current price for the year 2015-16 was estimated as was laid on capitalism highlighting economic freedom and
Rupees 37.79 lakh crores which is approximately around private enterprise (Weber, (1920). It was felt that the right
32.94% of the total GDP current price of our nation. The gross proportion of an adventurous free spirit and discipline was the
value added constant price for the year 2015-16 was estimated right combination for a successful entrepreneur.
as Rupees 32.43 lakh crores which is approximately around
33.34% of the total GDP constant price of our nation. Conceptual Framework
According to the 4th All India Census of MSME 2006-07, Performance of entrepreneurs depends of factors which are
employment generated on account of MSMEs amounted to dependent and independent variable affecting the behaviour of
Rupees 8.05 crores. The exports for the year 2014-15 through entrepreneurs. The independent variables consist of access to
MSME contribution was estimated as $138.93 billion. The business information, access to financial resources, provision
employment generated for the year 2016 through MSMEs was for managerial experience and access to infrastructure.
Rupees 11.7 crores. The MSME units’ contribution as on 2016 Government regulations are considered as moderating
was around Rupees 5.1 crores. This clearly indicates the role variable. The inter relation and coordination between the
and importance of MSMEs in the Indian society. This sector if independent, dependent and moderating variables paves the
utilised optimally can be a perennial generator or income and way for the ideal functioning of the SMEs. The understanding
employment and hence the need for sustainability is of the SME working and the factors for sustainability are vital
mandatory rather than a choice. because these are propellers of women empowerment as an
outcome of the sustainability.
Statement of the Problem
In the current date the women enterprises are increasingly Performance of SMEs
being supported by the government as well as the private Many studies have tried to delve into the factors that affect the
sector. With around half of the population being women, this performance of SMEs. These studies reveal that the prime
potential work force can be the answer to many of our factor is the lack of capital and financial assistance. However
society’s economic concerns. The micro finance institutions it was found that creativity and innovation can resolve this
have stood to champion the cause of these women enterprises. concern Dia (1996). Kallon (1990) studies reveal that access
Despite the attention and support given, majority of the SMEs to commercial credit did not contribute positively to the
are not able to celebrate their inception anniversaries. They success of SMEs in a significant way. Administrative
are stagnant, dormant or closed down for one or more reasons concerns have been stated as one of the major causes of
like lack of operating capital or marketability. The number of business setbacks. Substandard record keeping and improper
successful women enterprises are very less in comparison with basic business management, experience and skills were major
the number of dormant ones. There have been studies relating influencers (Kazooba 2006) [40]. Other influencing factors are
to factors affecting the sustainability of women enterprises but inadequate technical knowledge, inadequate managerial skills,
the studies relating to factors influencing sustainability of inadequate planning or organizing do the required market
women enterprises are less in number on comparison. Hence research (Lusier, 1996, Mahadea & Murphy 1996). The access
this study is an effort to establish the influencing factors of to business information services significantly affected the
sustainability of women micro enterprises in Hyderabad to performance of SMEs and also the access to finance since it
help replicate the same with the rural women enterprises to limited the entrepreneur’s ability to make use of the
recreate a success model. opportunity as and when it presented itself. Further technology
was also found to be a great influencer which aids the
Objectives of the Study communication with both the supplier as well as the customers
1) To determine the influencing factors of sustainability through ease of transportation and marketing of the products
2) To check how these factors have influenced sustainability or services (Ntakobajira 2013). Access to finance had the

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International Journal of Academic Research and Development

potential to positively influence the performance of SMEs. respondents of the authenticity of the researcher and the
Management skills and macro environment factors also assurance that the information will be treated as confidential
enhanced the performance of SMEs whereas infrastructure did and will be used only for academic purposes. Further it was a
not significantly influence the SME performance. The study task the researcher had to handle with extra effort and patience
revealed that with the increase in the number of years of as the entrepreneurs had busy schedules and hence took a
operation the performance of the SMEs also substantially longer time for the interview schedules which was made
increased. Better access to finance, appropriate managerial possible after frequent and constant requests for the same.
skills and effective macro environment will enhance the Some of them did not give the required information in the first
performance of SMEs. Mugo (2012) analysed the factors that meeting, hence the researcher had to repeated follow-ups to
influenced the performance of women entrepreneurs in convince and then get the required information.
Central Business District (CBD) of the city of Nairobi. It
attempted to assess the financial accessibility, the effect of Case studies to showcase sustainability
record keeping and its challenges, establish the effect of Case Study 1
budgeting on financial aspects influencing the performance of Name : Mrs. Ellandu Srilatha
women entrepreneurs and also to establish the outcome of Enterprise Name : Shreeya’s beauty and fitness studio
working capital management on the performance of women
entrepreneurs. Lack of entrepreneurial training and education, Mrs. Srilatha started her enterprise in the year 2006 with one
missing technology, absence of accessibility to markets, branch and an initial investment of 1.5 lakhs. She had
mismanagement of resources, lack of managerial skills and arranged the required finance from her own resources with the
fraud are also hinderances for the performance of women support of her family. She started the enterprise with two
enterprises. The study also identifies the major obstacle for the assistants and a turnover of 2.5lakhs in the first year. She has
enhanced performance of women enterprises is the financial started earning profits from the second year onwards. She has
constraint. This can be handled by good government policies an overall working experience of 12 years in her relevant
and by educating women entrepreneurs through seminars and field. The current turnover is 12.5 lakhs with the support of 9
helping them to assess the business margins and learn to employees spread in two branches. She has completed her
mark-up to estimate the rate of business returns on their own. degree and she had no entrepreneurial knowledge or
experience during inception of her enterprise. After the
Research Gap inception she had undergone a training for Cosmetology and
Though a lot of researches have been done in reviewing small Aesthetics to enhance her entrepreneurial skills which she
and micro enterprises, a majority of these concentrate on the feels has helped her business to move to the next level. She
rural ones and based on the study areas and their own opines that dedicated passionate working will help women
objectives. There is a scarcity for studies that takes into fold entrepreneurs to succeed in their respective areas. She further
the urban migrated enterprises and the reasons for the success feels to sustain in the market one has to constantly upgrade the
of these enterprises. Hence this study proposes to study and required skills that is in demand and also one has to learn from
build on the local literature and the factors that enhance the every problem and the underlying opportunity in it should be
performance of urban women enterprises who have migrated utilized. She also feels that focussed, sincere, consistent
from rural areas and the indicators of their sustainability. efforts to satisfy the customers along with amicable and
Similar studies have focused on the challenges and concerns dedicated team work has helped her sustain in this business
of SMEs and some on the women enterprises but this research arena which has new players mushrooming every other day
proposes to concentrate on the aspects that influences their where sustainability has been an evergreen challenge which
performance positively. This research’s main focus is to she has deftly handled. Along with good working environment
concentrate mainly on the factors that influence the and standards she feels that motivation, family support,
performance of women micro enterprises and its sustainability financial assistance and last but not the least government
leading to long term progress. Sustainability leads to support can help women enterprises to become sustainable.
economic progress and empowerment which in turn leads to Though she feels that salary is not the only criteria for work
women empowerment. The scarce availability of reliable and efficiency she observes that delayed salaries can bring down
valid data continues to be one of the key obstacles in the work efficiency of employees which can affect the
understanding small and micro entrepreneurs in urban areas of sustainability aspect of the enterprise. Though she does not
Hyderabad, Telengana state. This is a practical concern as the have a regular grievance redressal cell, she feels that training
research is totally dependent on the data rendered by the has enhanced the performance of the employees and has also
respondents. The outcome of the research is also dependant on helped them to handle situations with care. She further says
the authenticity of the information provided by the respective that she is always cautious as not to waste any resources in the
women entrepreneurs. This study will help to build on the course of her business activities and also constantly tries to
locally available data though scarce. innovate to live up to the new demands of the clientele. She is
This study was dependant majorly on the data provided by the always game for new innovations and new products. She also
women entrepreneurs. The business information is uses technology to the optimum best for quality service. Her
confidential and most of them when approached were hesitant business activities are digitally controlled and managed saving
and reluctant to give the required information due to fear of time and space. She reveals that though all her employees are
the data being misused and also being misquoted. This was not educated, they are skilled and trained to do the job they are
handled deftly by the researcher with the help of an doing currently. She feels sustainability is a tall order and
authorization letter from the University, to assure the requires a multitude of things to make it a reality. She says

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International Journal of Academic Research and Development

understanding the skill and capability of the employee and her employees are semi-skilled, but are trained to do the job
accordingly delegating the relevant task is very essential to they are doing currently. She feels sustainability requires a
retain the employee. Parallelly, seeking the customer feedback combination of quality product or service along with timely
constantly and working on it to further enhance service should delivery and coordinated team work. She feels motivation is
also be a continuous ongoing process. She also opines that indispensable for an enterprise if has to be sustainable. She
learning new techniques and methods to improve the service also feels promotional activities are a must and takes part in
and please customers can guarantee any enterprise a exhibitions and sales regularly every year along with
permanent place in the market. She feels motivation and networking. According to her advertisements and word or
training are indispensable for an enterprise if has to be mouth references serve well for marketing purposes. Her
sustainable. future vision is to create a brand awareness for her specific
She also feels promotional activities are a must and indulges product and brand. She also feels she has to increase her sales
in regular online updates in Google and also distributes paper twice her current target to enhance her business.
pamphlets five times in a month. According to her the print
media, hoardings, pamphlets, word or mouth references and Implications
networking serve well for marketing purposes. Her future Self and team motivation along with timely quality service
vision is to become an expert in her field and to establish her reasonably priced aids the sustainability process.
brand in as many branches as possible. She also feels she has
to empower as many women as she can through employment Sustainability indicators
in her enterprises. Sustainability is a very broader term and can include in its fold
all forms like social, political, technological and
Implications environmental along with the economic sustainability aspect.
Self and team motivation along with right marketing tools and But on a narrow perspective, the study focuses on the
networking aids the sustainability process. economic aspect and the longevity of an enterprise. This is
based on the assumption that longevity usually leads to
Case Study 2 economic progress in the long run and economic progress in
Name : Ms. Ujwala Giri turn leads to empowerment of other areas like social, political,
Name of the enterprise : Diletto (Confectionery & packaging) technical and environmental empowerment of women as well.
SMEs have been recognized as the solution for many concerns
Ms. Ujwala Giri started her enterprise in the year 2009 with of the economy. This can act as a solution and give the
one branch and an initial investment of 4 thousand. She had required relief only if these enterprises are sustainable. The
arranged the required finance from her own resources with the challenge of sustainability though intense is one of the major
support of her family. She started the enterprise with one solutions for economic depression in our economy. Hence
assistant and a turnover of 50 thousand in the first year. She Sustainability has become the burning need of the hour. This
has started earning profits from the first year onwards. She has brings to light the reasons that can aid sustainability in the
an overall working experience of 9 years in her relevant field. long run thereby leading to women empowerment as an
The current turnover is 35 lakhs with the support of 7 outcome of sustainability.
employees. She has completed her post graduation and she Finding of Factors that aid sustainability based on the
had entrepreneurial knowledge during inception of her empirical inferences
enterprise. After the inception she did not undergo any It is revealed from the case studies that micro enterprises that
training to enhance her entrepreneurial skills. She feels that it stand the test of time do become successful over a period of
is not mandatory or essential. She opines that risk taking, hard time. Being existent in the initial years is far more important
work and patience are the building blocks of entrepreneurship. than to be profitable to become sustainable in the long run.
She further feels to sustain in the market one should first Though training was optional, both the women entrepreneurs
check the market for the particular product and then give a had opined that motivation was an indispensable aspect for the
quality product with the right price which will ensure long success of an enterprise. Both of them had opined that team
term sustainability. She feels that though sustainability is a work, innovation, technology, ideal methods for marketing
challenge in the initial years, the way to combat it is only and networking are essential for the sustainability of an
through quality output and down to earth pricing which in enterprise. Though they had arranged finance from self-
combo can assure sustainability. Along with good working resources, both the entrepreneurs did not feel that finance can
environment and standards she feels that motivation can help be a constraint for business. Further both the entrepreneurs
women enterprises to become sustainable. She has a regular had regular networking agenda for the enhancement of their
grievance redressal system and she feels that training has respective businesses. So, based on the inputs and experience
enhanced the performance of the employees and has also of these women entrepreneurs the success recipe for a
helped them to enhance their existing skills. She further says sustainable enterprise is a proportionate combination of
that she is always cautious as not to waste any potential motivation, team work, innovation, technology, appropriate
resources in the course of her business activities and also marketing methods, quality and timely service and last but not
constantly tries to innovate new additions to her kitty to the least but most important networking to move their
enhance clientele base. She welcomes new innovations and business to the next level. This has brought to light that the
new products. She also uses technology to ensure quality Internal and External Environmental factors that lead to
service. Her business activities are digitally controlled and sustainability are prevalent in both the empirical studies done
managed saving time and space. She reveals that though all and hence these women micro enterprises are sustainable.

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Sustainability leads to women empowerment But the rural enterprises are facing a setback with regards to
As mentioned earlier sustainability being the need of the hour sustainability and marketability thereby making this a far cry.
is the solution for many economic concerns of our society and But though this seems an ordeal it is not an impossible task.
also the major cause that can aid and propel women The challenge lies in understanding the success recipe of the
empowerment. If a women SME is sustainable it means it is urban enterprises and thereby borrowing the blueprint to be
able to make profits for itself on account of its business replicated in the rural areas. To make a start it might be a little
activities. This indicates that there is increased cash flow in tedious and given the rural setbacks this may take time to take
the family which helps the family to be able to select and off but with the right blueprint strategy in place, this should
choose their products and services. This also gives freedom of not be an issue.
decision making to women who are able to enjoy the
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