Entrepreneurial Ability and Development of Micro Enterprise

Abstract

Self-help groups (SHGs) are set up by the National Bank for Agriculture and Rural Development (NABARD) with the objective of supporting poor people of India to set up micro enterprises. However, it is not at all easy to become an entrepreneur. The empirical observation shows that while some members of SHGs succeed in becoming entrepreneurs, other continue to remain just members. This article tries to identify the factors that help this entrepreneurship. It first develops a theoretical model and then carries out an empirical exercise with the help of ground-level surveys of SHGs in several districts of West Bengal. This empirical exercise with the help of logistic regression finds out that state help, financial access and existence of marketing opportunity are necessary for entrepreneurial success. Contrary to the general belief, more years of education does not help entrepreneurship. More revealing is the finding that protective social support deters entrepreneurship.