Revisiting the financial challenges faced by women-led microenterprises : some evidence from the Indian manufacturing sector

Purpose - This primary purpose of this research is to explore the rank order of funding challenges among the other challenges faced by women entrepreneurs (WEs) in an urban setting. For this purpose, the study uses a sample of women microentrepreneurs engaged in (the relatively capital-intensive) manufacturing activities. The study further explores the perception of WEs toward borrowing as a source of funds and the challenges they face while accessing institutional finance. Lastly, the study explores whether the financial challenges faced by them are, in part, influenced by the deficiencies in their own skill set, as the human capital theory suggests. Design/methodology/approach - For the purpose of analysis, this research uses summary statistics, namely the mean, mode and standard deviation for the purpose of preliminary analysis. The Friedman two-way analysis of variance by rank test and the associated chi-square value are used to statistically validate the hypothesis. Furthermore, the Wilcoxon signed-rank test is used to check for the robustness of our results. Findings - Our findings suggest that the growth of the financial services sector in urban India has not had a significant impact on the funding challenges that WEs faced. A closer look at the evidence suggests that even for educated urban women, the funding challenges faced are no different from what has widely been reported in the context of other emerging nations. Highlighting the inadequacies in high school and college education in so far as financial skills training is concerned, the study recommends a multipronged approach to address the observed voluntary abstinence from borrowing as well as the institutional hurdles WEs faced. Originality/value - Unlike previous research where WEs are treated as a monolithic whole, this study focuses on WEs engaged in manufacturing activities in an urban setting.