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I. Introduction
The majority of rural entrepreneurs are facing several problems in today’s ultra-competitive business world; due
to the lack of basic amenities in the rural areas like, lack of education, financial problems, marketing hurdles,
Management and human resource problems, insufficient technical and conceptual abilities etc., discourage the rural
entrepreneurs to establish the industries in their rural areas. In this regard, currently the government of Tamilnadu
offered different kinds of entrepreneurial development schemes through various Government owned EDP
Institutions such as Tamilnadu industrial investment corporation Limited, new entrepreneur-cum enterprise
development scheme (NEEDS) from the department of industries and commerce, Government of Tamilnadu, and
small enterprise development scheme offered by MSME, These schemes helping to uplift their entrepreneurial skills
to perform well. The present study focuses on the major problems faced by the rural entrepreneurs. Special emphasis
has been laid on the technological problems, Institutional Problems, Financial problems and lack of other basic
amenities.
An entrepreneur is one who plays a significant role in the economic development of the country. Basically an
entrepreneur can be regarded as a person who has the initiative, skill and motivation to set up a business or an
enterprise on his own and who always looks for the high achievements. He is a catalyst of social change and works
for common good. He looks for opportunities, identifies them and seizes them mainly for the economic gains. An
entrepreneur is a person who is able to express and execute the urge, skill; motivation and innovative ability to
establish a business or industry of his own either alone or in collaboration with his friends. His motive is to earn the
profit through production or distribution of socially beneficial goods or services. He is enriched with the inborn
qualities of adventurism, willingness to face the risks, innovative urge and creativity and eager to make dynamic
changes in the production process, also introduces innovations to find out new uses of raw materials. In addition to
this the other challenges including; developing the vision and ideas, raising capital, assembling a team, finding the
right location, finding the right employees, finding good customers, overcoming competition, unforeseen challenges
and expenses, keeping up with the industrial changes and trends and exiting the business. In the present scenario of
business, the micro, small and medium enterprises have been accepted as the engine of growth for promoting the
equitable development. The MSME`S also have the vital role in the dispersal of industries and generation of
employment opportunities. The MSME`S are providing jobs more than 6 crore people. The MSME sector is
contributing 8% of country’s GDP, 45% of manufacture and 36% its exports. The MSME`s sector has consistently
registered higher growth rate compared to the overall industrial sector. The distribution of MSME`S in all over India
is not equal because of unavailability of raw material, unawareness or lack of entrepreneurial skills development and
lack of support of financial and technical assistance from the concerning local authorities at the district or state and
central level. Annual Report 2014-15, Govt. of India, Ministry of Micro, Small and Medium Enterprises.
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Special Issue on Recent Trends in Engineering and Managerial Excellence
IV. Objective
To identify the problem faced by the rural Entrepreneurs of the central districts of Tamilnadu.
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Special Issue on Recent Trends in Engineering and Managerial Excellence
V. Methodology
Data
The data required for the study is primary in nature. The primary data have been collected by making use of the
Questionnaire.
Area of Study
The present study is confined to the problems faced by the rural Entrepreneurs of the central districts of
Tamilnadu. In the geographical map of Tamilnadu. Like that Salem, Dharmapuri, Perambalur, Namakkal, Karur,
Trichy, Krishnakiri and Erode are located in the part central of Tamilnadu. Before conducting the research survey,
the researcher has gone through the annual and performance reports issued by the District investment corporation,
MSME and SIDCO of Tamilnadu, the result of this report shows the entrepreneurial performance of Tamilnadu,
especially in the rural area of these districts are not having an adequate level of development, some of the central
districts are already having enough facilities to uplifting the entrepreneurs even the people are not aware about the
opportunities of the entrepreneurship development offered by the Government within their districts like Erode and
Trichy.
Sample Design
Naturally the entrepreneurs are always little busy with their regular schedule of assignments, even they have
contributed their presence according to their convenience, By adopting the convenient sampling method, 560
entrepreneurs have been selected.
Framework of Analysis
The collected data have been analyzed by making use of the Structural Equation Model.A structural equation
model implies a structure of covariance matrix of the measures (analysis of covariance structures). After estimating
the model's parameters, the resulting model-implied covariance matrix can be compared to the empirical or data-
based covariance matrix. If the two matrices are consistent with one another, the structural equation model can be
considered as a plausible explanation for relations between the measures. This study focused on the problems faced
by the rural entrepreneurs by using the structural equation model analysis.
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Jour of Adv Research in Dynamical & Control Systems, May 2017
Special Issue on Recent Trends in Engineering and Managerial Excellence
VI. Findings
Results of SEM analysis indicates that the model offers a good fit to the data. Six fit indices which are
commonly used in SEM to test the model fit are Chi-square/degrees of freedom, GFI, AGFI, CFI, RMSEA, TLI are
summarized in the table 6. Chi-square/degrees of freedom is lesser than or equal to 3 (0.000), GFI, CFI and AGFI
are greater than or equal to 0.90 and 0.80 (1.000, 1.000, 1.000), RMSEA is lesser than or equal to 0.08 (0.000) and
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Special Issue on Recent Trends in Engineering and Managerial Excellence
TLI is greater than or equal to 0.095 (1.000) which clearly shows that all the goodness of the fit statistics is in the
acceptable ranges.
The results derived from the Structural equation model Analysis, marketing constrains are the major problem of
the entrepreneurs. Financial constrains plays a second major problem of rural the entrepreneurs. Commonly All the
three problems are found to be significant (i.e) technological problem, marketing problem and financial problem acts
as a constraint for the rural entrepreneurs in successfully running their business.
VII. Suggestions
Rural entrepreneurs are moving to urban markets to sell their outputs, in this regard they have faced many
expenses in meeting the transportation and warehouse maintenance, hence it is suggested to Government to establish
the market in the rural villages, and it should take initiation to create a road Network from village to urban areas of
the state.
Rural entrepreneurs are not in a position to avail the institutional credit due to the absence of the tangible
security and credit in the market. Further, the procedure to avail the loan facility is too cumbersome which
disappoints the rural entrepreneurs. Hence it is suggested the banks and financial institution to simplify the
procedural process for availing the loan, thereby the rural entrepreneur may avail the loan in time. Moreover, the
rural entrepreneurs may make use of the District Industries Centers while preparing the proposals
Lack of finance available to the rural entrepreneurs is one of the biggest problems which the rural entrepreneur is
born nowadays especially due to the global recession. Major difficulties faced by the rural entrepreneurs include low
level of purchasing power of the rural consumers, so the sales volume is insufficient, lack of finance to start the
business, reduced profits due to competition, pricing of goods and services, Financial statements are difficult to be
maintained by the rural entrepreneur, stringent tax laws, lack of guarantees for raising the loans, difficulty in raising
the capital through equity, dependence on small money lenders for the loans for which they charge discriminating
the interest rates and huge rent and property cost. These all problems create a difficulty in raising money through
loans. Landlords in Punjab proved to be a major source of finance for the rural entrepreneurs but the rates of land are
reduced due to the global recession so they also lack in hardcash nowadays.
VIII. Conclusion
Rural entrepreneurship plays an important role for the economic development in developing countries such as
India. Rural entrepreneurship helps in developing the backward regions and thereby removing the poverty.
Government should go for appraisal of rural entrepreneurship development schemes and programmes in order to
uplift the rural areas and thereby increasing the economic development. It can be stated that the reason why the rural
entrepreneurship finds it difficult to take off is due to lack of connectedness among the elements crucial to the
fostering of the capital accumulation, risk taking and innovation. The rural development programs should combine
the infrastructure development, education and health services, investment in agriculture and the promotion of rural
non-farm activities in which the women and rural population can engage themselves.
References
[1] Dhameja, S.K., Bhatia, B.S. and Saini, J.S. Women Entrepreneurs. SDME 27 (4) (2000) 46-47.
[2] Mali, D.D. Development of Micro, Small and Medium Enterprises of India Current Scenario and
Challenges. SEDME (Small Enterprises Development, Management and Extension) 25 (4) (1998).
[3] Saxena, S. Problems Faced by Rural Entrepreneurs and Remedies to Solve It. Journal of Business and
Management 3 (1) (2012).
[4] Surekha. Women Entrepreneurs : Problems and Potentials. Economic Times, 1989.
[5] Thiripurasundari, K. and Gurumurthy, V. Challenges for Small Scale Industries in the Era of
Globalization” in “Small and Medium Enterprises under Globalization: Challenges and Opportunities. L.
Rathakrishnan (Ed), 2009.
Websites
[1] https://fusionmx.babson.edu/entrep/fer/XXXVII/XXXVIIB/XXXVIIB.htm
[2] https://globaljournals.org/GJMBR_Volume14/4-Dimensions-of-Entrepreneurial-Self.pdf
[3] http://smestreet.in/
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Special Issue on Recent Trends in Engineering and Managerial Excellence
[4] http://www.coimbatore.nic.in/pdf/SHB017.pdf
[5] http://joe.sagepub.com/content/2/2/177.abstract
[6] http://www.drmgrdu.ac.in/Thesis_doc/Documents/Suresh%20Mallaya%20Ph.d%20Thesis/final.pdf
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