DYNAMICS OF FINANCIAL ACCESS AND GENDER DISPARITY IN UNORGANIZED ENTERPRISES IN INDIA: A SPECIAL REFERENCE TO UTTARAKHAND

Abstract

The unorganized enterprises are backbone of the Indian economy. In a situation when, employment opportunities are scarce, unorganized enterprises are the source of livelihood for a large number of people in India. They not only play a crucial role in providing large employment opportunities at comparatively low capital cost but also help in the industrialization of rural and backward areas, thereby, reducing regional imbalances. Unorganized enterprises comprise mostly of small businesses which face several bottlenecks including access to formal finance. According to NCEUS (2007), all the unincorporated enterprises owned by either individuals or households engaged in sale and production of goods and services and operating on proprietary or partnership basis with less than ten total workers are referred as unorganized enterprises. They have poor productivity and are vitiated due to their inability to meet financing needs of the enterprise. The literature defines financial inclusion (or, financial exclusion) as a part of a larger phenomenon of social exclusion of the weaker sections of the society. Financial inclusion is a buzzing socio-economic concept in most of the developing and upcoming economies that strives to make banking affordable to the underprivileged. A huge chunk of women-owned establishments in India are either self-financed or receiving finances from informal sources. Not only lesser access to credit, but data shows that gender disparity also exists in the Indian formal credit system. Female entrepreneurs have marginal share in formal credit access when compared to their male counterparts. Kantor (2002) found that self-employed women faced greater credit and growth constraints than men. Banks and other financing agencies in India consider women applicants as a priority and various schemes targeted towards women have been launched, yet female entrepreneurs have a meagre share in credit access. It subtly indicates self-exclusion of women from the credit market and information asymmetry. This problem of self-exclusion can be dealt by empowering women entrepreneurs. The information gap can be reduced through efficient usage of information and communication technologies (ICT). It can help bridge the gap between supply and demand-side participants through efficient information dissemination and enhanced communication capabilities. This study is a step towards identifying the impediments which curtail the growth prospects of unorganized enterprises in India.