Complementing Groups With Family Ties to Promote Women Entrepreneurship in North East Region

Self Help Groups, informal groups of women, were initially promoted in India to improve credit access. The group ties acted as social capital for the women and provided superior screening and monitoring for loans provided by banks. By 2022, 77.9 lakh Self Help Groups exist in India with 5.32 crore loans. The next challenge for the SHG movement is to build the capacity of women SHG members as owners of growth-oriented enterprises.

The SHG program has traditionally focused on women-owned and led individual and collective enterprises. It leverages the (improved) agency of women and their solidarity group to overcome obstacles to women’s entrepreneurship. This economic and social empowerment approach for women relies on enhancing women’s agency in business and family decisions. Most often, the discourse concerning women’s role and position in the family has negatively stereotyped family ties as oppressive and detrimental for women when prior research has shown that family ties cut both ways for women entrepreneurs. They can play an enabling as well as constraining role.

Women inhabit an inter-connected web of relationships where they enact multiple roles to integrate family, community and business. They contribute as well as draw from these institutions. Research suggests five ways in which family ties influence women in business. On the negative side, family ties may represent a form of giving up as they may require women to give up on their business to dedicate full time to reproductive work, or family ties may represent ‘an obligation’ that forces women to restrict their economic avenues to the ones providing flexibility to manage work-life balance. On the positive side, family ties may act as ‘an opportunity’ for women who inherit the business from their kin, it may serve as a form of ‘generational continuity’ where women pass on their business to their offspring and as a form of ‘support system’ where women benefit from psychological, financial and organisational support from family members.

As a formal recognition of the enabling role of family ties in the affairs of women entrepreneurs is presently absent, the scope of incorporating the part of the family in program design is restricted. As a result, family ties remain outside the ambit of the program intervention or are included as a form of ‘power negotiation’ and represent an under-exploited resource. Globally as well as in India, family businesses are the dominant form of business organisation. They account for 90 per cent of firms and contribute 70 per cent of the world’s GDP. On average, family firms have higher growth and profitability than non-family firms. Growth in small businesses is impacted by family factors such as family dynamics, conflict management, successor planning, community involvement and attitude towards the risk of family members. When family ties enable, reimaging women-owned enterprises as family businesses can act as a force multiplier and help realise these enterprises’ growth potential.

Incorporating a family business perspective in women’s entrepreneurship would require reimagining the capacity-building process of these enterprises in significantly different ways. First, the development agency may map the family’s interest and involvement in entrepreneurship. This mapping would help clarify family ties’ role in the entrepreneurial venture. Second, the development agency may give flexibility to women entrepreneurs to include a family member with the right motivation, interest and capabilities in the training programs. The capacity building of a family resource would help build managerial and organisational support for the entrepreneurial venture. Third, the capacity-building process must include the management of conflict and tensions in the family business to maintain the focus on business goals. Fourth, the training program may also focus on managing teams consisting of family and non-family members. Finally, training from a family business perspective needs to pay attention to inter-generational leadership and succession planning. 

Dr Priyatam Anurag