| |
Contributions from
the Column
InWEnt Forum
Crisis prevention: Instability transcends borders
Indian women entrepreneurs join forces
10/2006 |
|
[ Public-private partnership ]
Women entrepreneurs join forces
Lack of credit-worthiness is only one of the hurdles faced by Indian women who want to start a business of their own. In Andhra Pradesh, an Association of Lady Entrepreneurs helps women overcome such obstacles. The organisation cooperates adroitly with government agencies.
[ By Berthold Hoffmann ]
“The market nowadays is a very competitive place; no one gets time to learn from mistakes,” says Kanneganti Ramadevi, president of the Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP). “That,” she stresses, “is why women entrepreneurs need advice and support to be successful and avoid common pitfalls.” The unusual organisation she heads is dedicated to helping women launch and run their own businesses.
From small beginnings in 1993, ALEAP now has grown to more than 2,500 members – many of them owe their own success in business to support by the Association. Now established businesswomen, they want to repay that support with help for other women striving for economic independence.
Starting up a small business is difficult anywhere in the world. But it is a particularly tough challenge for women at the bottom of society. “In our experience, the greatest obstacle on the road to entrepreneurship is getting access to a loan,” Ramadevi reports. “Most women we help come from a poor background. They have nothing to offer a bank as collateral, which is a basic requirement for extension of credit.”
That is where the ALEAP Credit Guarantee Association steps in, offering small loans on favourable terms in cooperation with local banks. With governmental support, ALEAP guarantees the repayment of the loans to the financial institutions. As the banks’ tried and trusted partner, ALEAP can negotiate favourable rates of interest for its members. It can also speed things up, getting loans disbursed within a week, so women setting up a business can get straight down to work. To minimise risks, the market potential of all ideas for new business ventures is closely scrutinised.
Promotion of women entrepreneurs is a key economic objective – not just a matter of gender equality. In spring, the London-based Economist stressed the importance of the gender issue as a factor of national economic success. Under the headline “Forget China, India and the Internet: economic growth is driven by women,” it pointed out that female employment is the single most important growth factor for the world economy. Globally speaking, it plays a more important role than low wage levels in India or China, access to commodities or new opportunities presented by information and communication technologies.
Indeed, various surveys confirm the significance of female employment for progress and affluence. In the industrial nations, the rising proportion of gainfully employed women is a crucial driving force for the most dynamic economies. Numerous studies have shown a correlation between per capita GDP and the degree of gender equality that exists in a country. Such statistics are impressively documented, for example, in the OECD’s Gender, Institutions and Development Data Base (2006).
Amartya Sen, the Nobel Prize laureate in economics, similarly stresses the need to strengthen the role of women through education, the creation of job opportunities and guaranteed property rights. This is because women’s skills can and should be extended and improved but also because women play a key role in reducing crucial development problems such as child mortality or population growth.
While the exploitation of women working in appalling conditions is rightly deplored, female economic potential is far from sufficiently tapped. Raising the percentage of gainfully employed women is a key to solving major economic problems.
Wide range of services
That is the background against which ALEAP renders services for women entrepreneurs. Arranging loans is only one of many. Others include free basic counselling, detailed market surveys and the provision of infrastructure designed to give women entrepreneurs a good chance of success. In Hyderabad, the state capital of Andhra Pradesh, the Association is running a commercial complex, in which space is let to ALEAP members. On the fringe of the city, it has been instrumental in creating Hyderabad’s first business park for women. ALEAP, among other things, mobilised support by the state and central governments. ALEAP also runs a conference centre, a communication and information centre, a crèche and a home for workingwomen, which serves as a base from which some 60 women have taken their first steps as entrepreneurs.
Spacial vicinity generates personal contacts, which, in turn, generate new business opportunities. ALEAP attaches a great deal of importance to networking and cooperation – something the women concerned appreciate as key to competitiveness and innovation. Accordingly, they have formed sector-specific clusters in various places: garment makers in Vijayawada, food processors in Cuddapah and silk production units in Madanapalli.
Encouraged by what was achieved in Andhra Pradesh, ALEAP increasingly seeks international contact. Two ALEAP representatives, for example, attended this year’s 10th Women Entrepreneurs Conference in Essen. The intelligent and pragmatic ideas from southern India impressed their German colleagues. Indeed, interest was so keen that German textile experts were soon on their way to Asia with a view to exploring possibilities for cooperation.
The starting-point for such cooperation is the EU-India Network of Women Entrepreneurs (EINWE), a training and networking programme run by ALEAP in cooperation with InWEnt. It provides Indian women with the skills and knowledge needed to gain a foothold in the food and garment export sectors. At the same time, the project supports the women entrepreneurs association by brokering international contacts.
Asked about the status of women entrepreneurs in India, ALEAP’s president radiates confidence. Instead of pondering the inequalities between men and women, she stresses the need to take initiative and actively change the underlying conditions. By establishing ALEAP and creating a comprehensive range of services for women, she became a change agent, highlighting the possibilities that exist even for disadvantaged groups.
The successful work done in Andhra Pradesh shows how important it is for development agencies to focus on women as initiators and drivers of change. What is needed are not programmes “for” women, for improving their situation, but projects that give women a chance to broaden their present horizon of opportunity. The essential thing is the willpower to drive change forward, to secure the much-vaunted “ownership” that is a prime requirement for project or programme success.
InWEnt and ALEAP have agreed to deepen the cooperation and international networking realised so far. They plan to expand joint activities with European and regional associations. The objective is to further strengthen the service profile of women entrepreneurs associations through training, dialogue and networking.
Berthold Hoffmann
is a senior project manager at InWEnt. In the context of European-Asian cooperation, his focus is on trade promotions as well as social and environmental standards.
berthold.hoffmann@inwent.org
Links:
Association of Lady Entrepreneurs of Andhra Pradesh
http://www.aleap.org/
EU-India Network of Women Entrepreneurs
http://www.einwe.com
Gender, Institutions and Development Data Base (GID)
http://www.oecd.org/dev/institutions/GIDdatabase
|
