Given our country’s demographic dividend, India is uniquely positioned to harness the power of its relatively younger workforce through job-creation initiatives, thereby contributing to its economic progress. However, with 92% of its participating labour-force in the informal sector,^[1] several inter-related ideas emerge. This is where microenterprises^[2] come into the picture. As a backbone of any developing economy, they foster local economies by keeping money close to home and serve as a tool to enhance equity and social stability in communities. Given their diverse skill set, the potential of microentrepreneurs can truly come to the fore through the right guidance, resources, and skill development.

We often speak of how involving women, more specifically rural women, in the economic mainstream may have a significant impact on the overall economy with an increase in the country’s GDP and the household income of these families. But what are the ways in which this could be implemented and sustained at a national level? Could microenterprises, comprising clusters of women, be self-sufficient in terms of running their business and is there a market for them? The educated urban segment of women is perhaps in a relatively better place with access to information and the wherewithal to network because of the existing ecosystem that is already in place. But if we were to look at women from humble backgrounds, they are the ones in dire need of economic support and sustainable livelihoods. Tapping into this potential then becomes the starting point for women-led microenterprises.

A Step in the Right Direction

The Indian government has played a pivotal role in collectivisation of women groups. It was in the 70s when Self-Help Groups (SHGs)^[3] started gaining momentum, and today we have over 72 million women comprising nearly 6.6 million SHGs.^[4] Initially when the SHGs were set up, each one had to be supported at the district level by the government and even banks found it difficult to lend them credit due to the challenges associated with their remote location, repaying capacity, etc. Soon after, the concept of federated SHGs, combining 10-15 SHGs of similar cultural and social ethos came as a boon and helped in integrating them. Today, we have approximately 1.6 lakh federated SHGs.

Most recently, the government has also come up with an ambitious plan of empowering 25 million women affiliated to SHGs in rural India, to earn ₹100,000 per annum on an average in the next two years.^[5] It is a tall order to implement if one is to think of educating this huge number with the basics of it all within a short span of two years. With all these structures, schemes, and initiatives in place, one would think about how best these can be utilised for benefitting the women folk. In my view, that will happen only with the infusion of technology. At GTTF, we aim to look at digital models which are scalable and replicable.

Skill Development via Fostering a Digital Mindset

In our attempt to upskill them, we have partnered with SHGs in Maharashtra and Gujarat to work with women from tribal areas and other minority communities from the socially disadvantaged groups. With a simple yet crucial aim of improving day-to-day lives of these communities, we have set up digital literacy centres, empowering our participants on four key components – ability to search for information, ability to utilise e-services, ability to undertake cashless transactions, and ability to use social media. Piloting in these two states has given us an opportunity to closely understand the neighbourhood and the terrain, besides giving us a glimpse of the requirements these women have. Even before entering the domains of customer and market discovery, we realised that these women needed to be digitally proficient. So, that has become the primary basis for training these beneficiaries. Thereafter, when it comes to choosing a domain, we consciously look at areas that they are already somewhat familiar with, rather than a completely new arena, so it is easier to nurture their strengths and add additional layers in terms of capabilities, informational support, etc. As most were in the age group of 20-40 years, we realised that enterprises related to food, embroidery, sewing, or handicrafts came naturally to them.

It is evident that with the proliferation of smart phones, it has become easier to market oneself, but these women, who in many cases did not have their personal devices, had to be taught the nuances of communication. Gradually, they came to appreciate the benefits and scope of the online medium in all its totality. For instance, they learned that WhatsApp could be leveraged as a sales tool, where you can share pictures of your product with cryptic/catchy descriptions to secure more customers. Apart from using voice notes, some of them also started making their own informal videos promoting their products, as they understood the powerful effect of visuals over voice calls or texts. Learning the nuances of viral marketing and social media, and understanding how one had to be mindful of both the information and frequency of dissemination while promoting their products, they began securing repeat orders. It was a phenomenal eye-opener as they began to apply for government schemes online and learnt to negotiate for raw materials, keeping costs low and ensuring profit.

Digital literacy and strengthening the capabilities of these women by mapping individual competencies, building agency, and offering customised support, thus emerged as our focus areas at GTTF. While we worked on mentoring them in market-relevant skills, an understanding of whether these women possess the entrepreneurial zeal, requisite skillset, motivation, and capabilities has also stayed critical.
 

Overcoming Challenges Through Digital Proficiency

In our experience, we have seen that when one is trying to create transformative models, proximity, familiarity with the local culture, and relationship building are extremely important, particularly in the initial phase. Partnering with like-minded local organisations and SHGs in their mission of building sustainable livelihoods through economic activity helps enhance impact. Two major challenges faced by microenterprises, in my opinion, are:

Access to capital: Surprisingly enough, despite availing finance, a significant number of women end up returning the funds or do not actually use them for the purpose of production/creating an enterprise. In some cases, the SHGs become a front for male members of the households to receive the money for their own requirements, be it business needs or familial commitments. Despite the underlying complexities, some of the federated SHGs have fortunately been able to channelise these funds towards productive economic activities, enabling microbusinesses to earn and return the borrowed capital. We realised that digital learning further made this access to capital easier. For instance: Being digitally savvy, people were now able to access government schemes online and avail quick loans, helping families move away from seeking informal credit through moneylenders at high interest rates. 

Understanding the market landscape: In terms of building the ecosystem, it is essential to recognise that most of these women are unaware of their customer base and hence, unable to tap into it. They may not even have the ways and means to go and market themselves beyond the immediate periphery of their towns. So, the typical definition of an entrepreneur (as someone who can discover an opportunity and find the customers to go sell their products) needs to be redefined for these women. At GTTF, we appreciate the fact that in the early stages, it is more to do with confidence building, understanding the market need, and bringing that market close to them. Through our platform, WeChimni,^[6] we aim to build a complete ecosystem for women, whereby they are able to reach customers and other stakeholders faster in order to generate business for sustainable livelihoods.

In Conclusion

It is important to remember that microenterprises thrive on customer intimacy. Over a period of time, one indeed sees two to four women champions from within the SHGs who liaise with the corporators and become the primary source of orders. But getting to that stage is time-intensive and online models have proven to be more effective, generating faster results in this sphere, as shared earlier. The underlying idea is to create a digitally integrated ecosystem in parallel for long-term sustainability, where these microentrepreneurs are able to garner their customers and customers are able to discover them. This visibility of stakeholders within microenterprises is crucial to foster a mutually collaborative ecosystem where people rely on one another. Discovering what one is good at early on and supporting each other through complementary skills helps in strengthening the group, much like in a startup.

^[1] Punia, K. (March 12, 2020). Future of unemployment and the informal sector of India. Observer Research Foundation (ORF). Retrieved from https://www.orfonline.org/expert-speak/future-of-unemployment-and-the-informal-sector-of-india-63190/

^[2] A microenterprise or a microbusiness, refers to a small business that usually operates with fewer than 10 people and is started with a small amount of capital advanced from a bank or another organisation.

^[3] An SHG comprises a small group of local women who come together to address common issues and act as important micro-finance systems. They become platforms that promote solidarity on issues of health, nutrition, gender parity, and gender justice.

^[4] Khaitan, S. (2020, October 25). Women’s self-help groups in rural India have pushed past obstacles and boosted household incomes. IndiaSpend.com. Retrieved from https://scroll.in/article/976368/womens-self-help-groups-in-rural-india-have-pushed-past-obstacles-and-boosted-household-incomes

^[5] PTI. (October 30, 2021). Centre launches initiative for women associated with SHGs to earn Rs 1 lakh per year. The Economic Times. Retrieved from https://economictimes.indiatimes.com/news/india/centre-launches-initiative-for-women-associated-with-shgs-to-earn-rs-1-lakh-per-year/articleshow/87396498.cms

^[6] WeChimni- A platform showcasing a collection of sustainable, upcycled and recycled products at affordable prices. For more info, access https://wechimni.org/#/

Write to us at management_rethink@isb.edu