Entrepreneurship the mediating role of finance and entrepreneurial education for small farmers in developing countries: evidence from India

Abstract

PurposeThis paper investigates the mediating role of access to finance and entrepreneurial education for small and marginal farmers (SMFs) in the Indian northern state of Punjab. Furthermore, it examines the inter-mediatory role of entrepreneurs and the access to finance in the promotion of innovation, development and consequently poverty alleviation.Design/methodology/approachTo gain a deeper insight, we used a purposive sampling technique, involving in-depth, face-to-face interviews based on a semi-structured questionnaire amongst 185 farmers from the state of the Punjab in India. The combination of open ended and dichotomous questions amenable to the Likert scale, captured responses and the transcribed questionnaires were thematically analysed.FindingsUsing the analysis of the quantitative and qualitative responses, we explain the cause and consequences of the finance gap and the impact of poverty on household income and the debt levels of SMFs. The findings suggest that the expanding pool of SMFs is due to land ownership fragmentation that disenfranchises SMFs from accessing adequate finance thus limiting their ability to adapt to technological innovations, and therefore limiting their productivity and growth. This essentially limits their ability to transform their economic and social wellbeing. The findings from the data analysis suggest a lack of access to finance negatively impacts on SMFs' ability to use innovative practices, technologies and productivity. This adversely affects income level, access to education and social goods to propel them out of poverty. The findings advocate that government policy should focus on land reforms, which provide adequate access to finance to enable the adaption of technology and an access to markets to empower marginal farmers.Research limitations/implicationsLand fragmentation resulting with population growth in emerging economies continuously expands SMFs. To improve efficiency, productivity and entrepreneurial traits amongst SMFs, it is a pre-requisite to have an agile economy. However, in emerging economies such as India, the responses of 185 farmers suggest, a bespoke policy to promote the interest of SMFs through enabling them access to finance, technologies, training and education, continues to prove elusive. This novel empirical research provides evidence that demands that policymakers, commercial institutions and donors need to respond to the needs of SMFs to ensure food security and an optimal utilisation of farmland. The limitation of this research is that the sample is from one country, which limits its generalisation. The findings of this study could be enhanced by conducting comparative studies in other regions or economies.Originality/valueThis empirical study examined the barriers to enterprise for SMFs in the Indian Punjab; it examined the causes and consequences and the implications for food security for India. The findings of this study highlight the importance of developing the entrepreneurial capabilities of SMFs through effective education, training and above all through an adequate access to finance to enable them to adapt their technology. Furthermore, the findings make a case as to why SMFs are an integral part of the food chain and why it is necessary to enhance their efficiency, productivity and their access to finance.