A STUDY ON FINANCIAL LITERACY AND FINANCIAL

AWARENESS AMONG WOMEN ENTREPRENEURS WITH

REFERENCE TO BANGALORE CITY

Author:

Kunal Singh Chouhan

VI-SEM BBA,

SURANA COLLEGE,

South End Road,

Bangalore-04

Contact No: 7892079651

Email Id: kunalchouhan227@gmail.com

Abstract: -
Entrepreneurs play a very significant role in accelerating the economic growth. Wherein
speaking of INDIA, the current population of India is around 138 crores out of which only 76
million entrepreneur have small scale or large-scale business ventures. Out of the 76millIon
entrepreneurs about 20% are women entrepreneurs’,77% are men and 3% are others
according to the financial year 2021. Financial Literacy is the understanding of various
concepts as saving, investing and debt that leads to financial well-being of an entrepreneur.
There are many women who conceive innovative ideas but due to lack of financial awareness
and literacy they are not able to start or expand their business venture. The primary objective
of this research paper is to understand the level of financial awareness and literacy among the
women entrepreneurs of Bangalore city. A descriptive design of research is undertaken
wherein the primary and secondary data is used for analysis and inference. Through this
study an attempt is made to understand and give suggestions for enhancing the financial
literacy and create awareness on financial inclusions.
Keywords: Challenges and opportunities, financial literacy, Financial Awareness, Financial
Inclusions Women Entrepreneurs.

Introduction:-
Entrepreneur is a person who makes money by starting or running business, especially when
this involves taking financial risks. Today countries all over the world have realized that
women have potential which can be used for growth and development. Women
entrepreneurship is one way of doing that. Women entrepreneurs not only create new job
opportunities but also provides the society with different solutions to management,
organisation and business problems. The increasing rate of women in the business field as
entrepreneurs over the past two decades has changed the demographics of business and
overall economic growth in the country. However, the entrepreneurial world in India is still
dominated by men. Women entrepreneurs are only found in the areas of small-scale business
which have limited growth and tend to be home-based. Their role in the large scale and
technology based businesses is still quite limited.
Many research studies point out that one of the major factors restricting the growth of women
enterprises in India is lack of financial literacy and awareness about various schemes
available for them. Women often have fewer opportunities than men to gain access to credit
for various reasons including lack of collateral, an unwillingness to accept household assets
as collateral and negative perceptions of women entrepreneurs by loan officers in the absence
of credit ratings and having a proper business plan. A general lack of experience and
exposure, heavy paperwork and high transaction cost associated with accessing credit also
restricts women from starting their business venture. As a result, they usually depend on the
family members or informal sources for their capital requirements which restricts the growth
and survival of their enterprises.
According to the Government of India, for an enterprise to be classified as a women managed
enterprise, It should be controlled and owned by women holding at least 51% of the capital of
the enterprise and at least 51% employed personnel’s should be women. Though financial
inclusion have been a major policy of India's financial system since 2004 and number of
financial institutions provide support by various schemes to women entrepreneurs for their
innovative and imaginative ideas aimed at skill development, yet according to FICCI it was
estimated that, only 26 percent women in India have a bank account and credit issued to
women accounts for only 7.3 percent of the total credit in the Indian financial system.
Women entrepreneurs are often referred to as the ‘missing middle’. While banks do not
deliberately exclude women, but something in the system is not fair.
A Goldman Sachs Global Investment Research Report that showed loan rejection rates for
women-owned SME's in India were almost double than those owned by men. It is a much
higher rate when compared to other countries in the world, so something and somewhere the
systems aren’t working fairly and there is a need to fix them. Therefore, the main aim of the
research is to study about the financial literacy awareness among women entrepreneurs (i.e.
women running their own businesses).
Women Entrepreneurs of India:-
Women entrepreneurship usually implies an act of business ownership and business creation
that empowers women economically and thus raises their economic strength and social status
in the society.
Government of India has defined women enterprises as “An enterprise owned and controlled
by a woman or group of woman with a minimum financial interest of 51% of capital and
giving at least 51% of the employment generated in the enterprise to the women”.
Women entrepreneurs in India can broadly be classified in three categories;
1. Women who are educated 2. Women who may not 3. Women who work in
and professionally qualified have educational or formal cities and slums to help
and take initiatives and training in management but women with low incomes.
manage business like men. have developed practical They provide services and
They usually work as skills required for small products like Papad,
medium and large units and scale or tiny enterprises like Garlends, Talories& Pickel
are often involved in handicrafts, garments, retail, to assist economically the
businesses to prove their beauty salons, bio- backward sections of society
creative and innovative technology, furniture etc. and their own family.
ideas and capabilities.

The major challenges in the area of women entrepreneurship are-

  Access to finance is repeatedly identified as a major challenge to start or grow
business.
 Women-owned SMEs compose a critical, yet underserved market in the country.
 Existing schemes of credit and support do not reach out to all urban and rural areas
due to lack of awareness amongst women about the financial assistance offered.
 Non- financial literacy such as laws, regulations and women’s access to markets and
networks often hamper women’s access to finance.
 India lags far behind other developing nations when it comes to a healthy ecosystem
of women entrepreneurship.
Government schemes supporting growth of women entrepreneurs:-

There are various entrepreneurial development programmes available for women

entrepreneurs:-

1). Association of Women Entrepreneurs of Karnataka (AWAKE) is a not-for-profit,

Non-Governmental Organization (NGO) based in Bangalore, India, working towards
‘Empowerment of women through entrepreneurship development to improve their economic
condition’. AWAKE strives to promote entrepreneurship among women as a means to
achieve self-reliance and socio-economic independence. AWAKE provides support and
guidance to aspiring women from rural, urban, national and international arenas to be
successful entrepreneurs, irrespective of their age, academic, social, economic background.

2). Technology based entrepreneurship development programme(TEDP) is a structured

training programme of 6-weeks duration designed to motivate and develop entrepreneurs in
specific products / technologies / processes developed by CSIR labs, R&D institutions,
universities etc

3). Science & Technology Entrepreneurship Park (STEP) The Science & Technology
Entrepreneurs Park (STEP) programme was initiated to provide a re-orientation in the
approach to innovation and entrepreneurship involving education, training, research, finance,
management and the government.

Literature Review:-
1). Rao K (2004) conducted a primary survey in Rajkot of 25 entrepreneurs from lower
middle class showed that most of the women entrepreneurs in all groups had arranged their
own funds, borrowing from friends or relatives but did not approach any financial institution.
2). Vatharkar (2012) examined the problems faced by women entrepreneurs in Pune district
at various levels in their business as entrepreneurs. The study found that women
entrepreneurs faced various problems at start-up and operating stage such as role conflict,
lack of motivation, lack of finance, discriminating treatment, understanding government rules
and regulations.
3). Dr. D.D.Arora & Subhash Chandra (2013) tried to examine the financial obstacles faced
by women entrepreneurs during start-up stage and running up of their enterprise. A survey of
189 enterprises from urban and rural areas of three divisions, (Ambala, Rohtak, and Gurgaon)
of Haryana State was conducted. The results of the study showed that 39.2 percent of sample
women entrepreneurs faced the problem in obtaining start-up capital and accepted it as a
major obstacle. According to the study, support for starting an enterprise came essentially
from informal sources, with a very small proportion of women getting help from Government
schemes and programmes
4). Ms Gurveen Kaur (2017) found that many women, from both urban and rural India could
not achieve their entrepreneurial dreams because of the unavailability of sufficient banking
facilities due to limited financial inclusion. Author also found that meeting the objective of
financial inclusion among women entrepreneurs can improve the socio-economic
development of the country too.

Methodology of Study:-Research methodology is a way to systematically solve the research

problems. It guides the researcher to do the research scientifically.
Statement of Problem:-Although India has a huge rise in the number of women
entrepreneurs after 2010, many of them are still prevented from reaching their full potential
by a combination of cultural restrictions, gender discrimination and lack of resources. With
this most of the women entrepreneurs in our country are stuck in the micro enterprise sector
and are unable to access larger business loans to expand their business beyond the SME level.
They often have fewer opportunities than men to gain access to credit as traditional lending
models act to their disadvantage. There is a huge gap in financial literacy of women when
compared to men. This study is undertaken to understand the awareness among the women
entrepreneurs of Bangalore City towards financial literacy and various financial schemes and
inclusions available for them.
Objectives of the Study:-
1. To study the level of financial literacy among women entrepreneurs.
2. To study the causes of gap in financial literacy among women entrepreneurs.
3. To examine the level of awareness of women entrepreneurs towards various government
schemes available for them.
4. To provide some recommendations in order to help women entrepreneurs and to improve
their financial practices.
5. To understand financing pattern among Women entrepreneurs.
Limitations of the study:
1. Time constraint
2. Delay in responses
Scope of research: The research on financial literacy and financial awareness among the
women entrepreneurs is limited to women entrepreneurs of Bangalore University.
Type of research: Descriptive
Sampling method: Simple random sampling technique was employed in the selection of the
sample.
Sample size: 40
Types of data: Primary data has been collected through structured questionnaire [google
form]. Secondary data has been collected from the various reports published by government
& non-government organizations, various industry & commerce website, research papers etc.
Plan of analysis: Simplex percentage analysis and Tables & graphs.

Data Analysis and Interpretation:-

Graph-1- Graph showing the type of business of the respondents.

 Freelancer Large company entrepreneurship
Scalable Start-up entrepreneurship Small scale entrepreneurship

15%
10%
55%
20%

Interpretation: From the above chart it can be interpreted that majority of the respondents
are involved in Small scale entrepreneurship, some respondents are involved in Scalable
Start-up entrepreneurship, and only few respondents are involved in large company
entrepreneurship.
Graph-2- Graph showing duration of business commencement of the respondents

1-3 years 3-5 years

Less than a year More than 5 years

5%
30% 40%

25%

Interpretation: From the above chart it can be interpreted that majority of the respondents
are in business for a time period being 1-3 years, some respondents are in business for a time
period being less than a year, and few respondents are in business for a time period being 3-5
years.

Graph-3- Graph showing the challenges faced by the respondents.

5% 5% 20%
10%

5%

10% 20%

5%
15% 5%
Interpretation: From the above chart it can be interpreted that majority of respondents have
common challenges wherein they Lack knowledge regarding various schemes available
through government, Lack financial support or Not knowing how to get the finance.

Graph-4-Graph showing the personal factors holding back the respondents from
reaching their potential.

Family Fear; Money

5%
5% 5%
5% Money Money; Educational qual-
ifications; Financial liter-
25% acy
35%
Money; Family Money; Family; Self doubt
5%
5%
5%
5% Money; Financial literacy Time
Time; Financial literacy Time; Money

Interpretation: From the above chart it can be interpreted that majority of respondents think
that time, money and financial literacy are the main factors which are holding them back
from reaching their potential.

Graph-5- Graph showing the level of financial literacy among the respondents.

10%
30% Interpretation: From the
above chart it can be interpreted that
majority of the respondents find
themselves 60% somehow knowing how to
invest or save or from where to get funds
from and somehow manage to run
their business and aware of some schemes available for women entrepreneurs and some find
themselves not knowing about how to invest or save or from where to get funds from.

Graph-6- Graph showing the awareness level of various Government schemes available
for women entrepreneurs among respondents.
 5%5% 5%5%
5%
5%
25% 5%

20%
5%
5%5% 5%

Interpretation: From the above chart it can be interpreted that majority of respondents are
aware of various Government schemes available for women entrepreneurs and minority of
respondents are not aware of various Government schemes available for women
entrepreneurs.

Graph-7- Graph showing are the respondents able to access the schemes available.

40%
No
Yes
60%

Interpretation: From the above chart it can be interpreted that majority of the respondents
are not able to access the schemes available.
Graph-8- Graph showing loan taken by respondents.

40%

60% No Yes
Interpretation: From the above chart it can be interpreted that majority of the respondents
have taken loan.
Graph-9- Graph showing views of respondents on whether financial literacy has an
impact on investment decision making.

Agree
15%
Disagree
10%
50% Strongly
agree
25%
Strongly
disagree

Interpretation: From the above chart it can be interpreted that majority respondents agree
that financial literacy has an impact on investment decision making.

Findings:-

 From the study it was found that most of the respondents are involved in Small scale
enterprise, some respondents are involved in Scalable Start-up business, few
respondents are Freelancer and rest of the respondents are involved in large scale
business.
 From the study it was found that majority the respondents have common challenges
such as they lack knowledge regarding various schemes available through
government, Lack financial support or not knowing how to get the finance.
 From the study it was found that majority respondents find themselves not knowing
about how to invest or save or from where to get funds from and they are not aware of
any financial schemes available for women entrepreneurs.
 From the study it was found that majority of the respondents are aware of some
Government schemes available for women entrepreneurs but they are not able to avail
them and utilize them.
 From the study it was found that majority respondents have taken loan.
 From the study it was found that majority respondents do not have adequate savings
and finance for future needs.
 From the study it was found that majority respondents agree that financial literacy has
an impact on investment decision making.

Suggestions:-
  To create awareness towards various government schemes available for women
entrepreneurs, it is suggested to provide workshop for entrepreneurs where banks can
promote themselves and promote the various schemes.
 More EDP programs should be conducted wherein the women entrepreneurs should
be provided with adequate knowledge regarding how to invest and where to get
finance from etc.
 Many women entrepreneurs are aware of importance & advantage of schemes
provided by government but lack in knowledge of how to utilize them. So, it is
suggested to speak with various organizations which can help in utilizing the
schemes.
 A strong EDP cell is required so, that it becomes easy for women entrepreneurs to
gather information and also to get their queries answered.
 General discussions, talks are to be encouraged in conference between entrepreneurs
and financial experts so that entrepreneurs gain confidence, trust and through which
the basic etiquettes related to financial awareness which can help them to form certain
attitude towards personal finance and develops particular financial behavior.
 Awareness regarding various financial institutes such as AWAKE and STEP should
be increased which educates the entrepreneurs and helps in increasing their skills and
imparts adequate knowledge.
 Majority of the women entrepreneurs had sufficient literacy of the basic financial
matters. But their knowledge is limited only to the basic matters.

Summary and Conclusion:-

Women entrepreneurs represent one such group who lacks access to formal credit and has to
largely rely on informal sources of credit i.e. family, friends and moneylenders to start and
run their business. The objective of study was to understand the financial literacy and level of
financial awareness among the Women entrepreneurs of Bangalore city. During the study it
was found that women entrepreneurs are partially aware of very few government schemes
which can support them financially. But unaware of the process of utilizing them. They knew
only few common security software programs. The awareness level towards various financial
institutions is also low.

With the government giving top priority to the agenda of financial inclusion of poor and
weaker sections of society and launching schemes like- Pradhan Mantri Jan DhanYojana
(2013) and Pradhan Mantri Mudra Yojana (2015), women entrepreneurship is also expected
to get a spark as most of the women entrepreneurs being in the small scale sector, constitute
target group of such schemes. While the Mudra scheme has a much more significant impact
on women entrepreneurs who have struggled with accessing finance due to a disproportional
lack of collateral for years in India. The setting up of a unique public sector institution “The
Bharatiya Mahila Bank” in 2013 with an aim to provide financial services predominantly to
women and women self-help groups is a significant step that may change the face of banking
for women in India.

We can conclude that financial literacy is a term which is highly important from the
viewpoint of business. Informed decision making can lead to the profitability of the
businesses. Women entrepreneurs should be given proper training to improve their financial
knowledge on time value of money and budget preparation. It is also important to keep them
informed about various sources for availing credit at cheaper rates.

References:-

1. Chander, Subhash (2013). Study of financial problems of women entrepreneurs

International Journal of Social Science & Interdisciplinary Research, ISSN 2277 3630,
IJSSIR, and Vol. 2 (4)

2. Neha Pandey and M.A. Ansari (2012).Role of Financial Institutions in the Development of
Women Entrepreneurship”, Indian Research Journal of Extension Education Special Issue
(Volume I), p279-289

3. Rao, K(2014).Women Entrepreneur in Lower Middle Class Families and their Problems,
Research Paper Presented at National seminar on Women Entrepreneurship –A Need for
Training and Curriculum Development held by Development of Home Science Extension and
Communication, Faculty of Home Science , M. S. University, Vadodara.

4. Entrepreneurial development Textbook (2007)- Dr.S.S.Khanna

5. Entrepreneurship Management Textbook (2013)- Dr. Vasant Desai and DR. Kulveen Kaur

6. Business Research Methods Textbook (2017)- S.G.Aggarwal

Internet:-

https://www.indifi.com/blog/9-schemes-for-women-entrepreneurs-in-india/

http://www.awakeindia.org.in

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