CHAPTER TWO

                                             LITERATURE REVIEW

2.1 INTRODUCTION

This chapter reviews and focuses on literature related to women’s micro businesses. The chapter presents discussions on the definition of Micro and small scale Businesses, Women in Micro and Small Scale businesses, the reasons why they get into micro businesses, the benefits of these micro businesses and equally the challenges/problems they face in their businesses.

2.2 The Definition of Micro and Small Scale Businesses

At present, there is no universally accepted definition of micro and small scale business (Scarborough et al. 1991). A study carried out by United States Agency for International Development (USAID) on micro and small scale businesses found more than 50 different definitions in 75 countries (USAID 1983). The definitions used various measures of size depending on the purpose for and the persons, doing the measuring. However, some of the yardsticks which have commonly been used as a measure of size, the upper limit of a small business are not universal across time and space.

According to UNIDO’s definition micro and small scale enterprises or businesses include those with between 5-25 employees and these businesses are so small that some prefer to call them income-generating activities. 

2.2.1 Women in Micro and Small-Scale Businesses

The role of micro and small scale enterprises in the development process has been at the center of development debate for the last three decades in most African countries. Increasingly, the sector is perceived as a critical component in the creation of much needed skills, employment and generation of survival for a growing number of people within the urban as well as rural sector (UNESCO, 2006).

The need to develop women’s entrepreneurship was emphasized by the fourth world conference on women, held in Beijing in September 1995. The platform for action, equality, development and peace, adopted at the conference call for actions to be taken by governments, NGOs and international organizations among others to promote support and strengthen female entrepreneurs (UNIDO, 2001).

Worldwide, many women are business owners. Women bring commitment and integrity because they care about economic empowerment, entrepreneurial development and innovation.  The number of women in small-scale business continues to increase steadily. Harper and Harper (1992) noted that, women run some 70% of all informal sector micro businesses worldwide. With regards to Africa, Boserup (1970) pointed out that women accounted for about half of the labor force in trade.

Small-scale business women in Cameroon make an important though not significant contributions to the economic and national development through the role they play in the chain of production.  For example, they provide raw materials to some actors in other domains of production and these activities have a multiplier effect on many households and thus help in the reduction of poverty.

Past findings have shown that women in micro businesses have enormously contributed to sustainability of their various households in recent years through the income and profits they get. In sub-Saharan African countries in general and Cameroon in particular, women are expected to contribute towards food, education, clothing, social obligations and other household expenses. And in other regions women are even head of households and thus responsible for all needs.

Women in the small-scale business sector in Cameroon cuts across a wide range of activities. From the urban to the rural areas, they function as petty traders in food crops, fruit vendors, fish smoking, restaurant operators, basic provision store operators, exploiters of non-timber forest resources, local beer parlor operators, and telephone box operators among others. They operate almost everywhere, from the smallest available space to market stores. These women cut across all social status, and mostly start up with little capital mostly from savings. Most of them have no professional training and their motivations for taking up a particular business activity are different, as well as their individual objectives. Their profit margins according to Endeley and Fonjong (2004) are usually low and the rates of business growth also slow.

Women’s entrepreneurship in particular is attracting the attention of policy makers and researchers because it has been recognized during the last decades as an important and untapped source of economic growth. However we still lack a detailed picture of the economic impact of women in micro businesses, as they set to ensure economic survival for themselves and equally their households.

The participation of women in micro business sector has not only attested to women’s access to independent cash income and their control over economic resources but also possess a socio-cultural challenge. As women are increasingly contributing to meeting household needs, a role that was traditionally left for men.

2.2.2 Types of Micro Businesses Carried out by Women

Gender stereotypes are a significant obstacle facing female entrepreneurs (Still and Timus, 2000) especially for women in male dominated sectors of business. Women often tend to pursue businesses in a limited number of sectors in which they were traditionally active economically; this has pushed women to get into low-income generating business ventures with poor returns defined as unskilled man power (Bradley, 1999). Most women’s businesses are in wholesale and retail trade, hotel and restaurants, and services because of low formalities involved. The following can be identified as the types businesses carried out by women.

• Restaurant operators
• Basic provision store operators
• Fruit vendors
• Local beer parlor operators
• Fisk smoking
• Petty traders in food crops/ groceries
• Exploiters of non-timber forest resources
• Vendors of new or second handed clothes

2.3 Characteristics of Women Owned Micro Businesses

Many women have set to enter micro businesses out of economic necessity and lack of other employment options. Because of their multiple responsibilities at home, women choose the kind of income generating activity that will enable them to manage from home. A review of African micro and small businesses indicated that 45% of the female headed businesses were home based as compared to only 19% of male headed micro businesses (USAID, 1995).

The types of economic activity in which women entrepreneurs are engaged in is another characteristic. In Africa, many women are engaged in food processing, basket making, cloth drying, soap making among others while men are concentrated in woodwork, transport, metal processing. Some of the reasons why women are concentrated in certain businesses had to do with their lack of marketable skills other than what they have learned at home and the easy entry into these businesses (USAID, 2005).

Equally there is always a limited growth potential of many women managed micro businesses. That is, women’s micro businesses have low growth rates partially due to the types of business activities they run.

Women owned micro businesses are also known for their low start up and working capital. A large number of women start up their micro businesses with personal savings or traditionally collected savings. Because of lack of property rights, many women lack the necessary assets to startup businesses and this in turn limits the size, type and location of their income generating activities.

2.4 Reasons for Women’s involvement in Micro Businesses

Women have often had individual reasons why they engage into micro businesses which have shown to always be different from that of men. Their reasons could either be pulling or push factors which either range from economic, personal or social reasons. The following factors have therefore been outlined by must studies as common reasons for women’s involvement in micro businesses.