ADALYA JOURNAL ISSN NO: 1301-2746

A STUDY ON KNOWLEDGE, PROSPECTS AND BUSINESS PERFORMANCE OF

RURAL TEXTILE ENTREPRENEURS

DR.P.ANBUOLI
ASSISTANT PROFESSOR, DEPARTMENT OF BUSINESS ADMINISTRATION,
MANNAR THIRUMALAI NAICKER COLLEGE, PASUMALAI, MADURAI – 625004.
EMAIL: anbuolimtnc@gmail.com

Abstract

Entrepreneur is a person who accepts various challenges and intends to run a

business for their livelihood. Entrepreneurship facilitates to become economically
independent by making suitable adjustments in business and personal life. The emergence
of rural entrepreneurship provides sufficient income to the entrepreneurs and provides
employment opportunities in rural areas. The purpose of this study is to examine the
knowledge level, prospects and business performance of rural entrepreneurs involved in
textile entrepreneurship. The research design consists of descriptive research whereby
different aspects concerning rural textile entrepreneurs have been investigated. This study
examined the demographic profile of rural entrepreneurs, knowledge on textile business,
prospects of rural textile entrepreneurship, and impact of resource availability on business
performance. This study utilized 100 samples and data for the study have been collected
through questionnaire. The statistical tools like simple percentage, chi-square, descriptive
statistics, factor analysis and regression coefficient has been used. It was concluded that
rural entrepreneurs have knowledge, access various prospects and resource availability
have significant effect on business performance.

Key word used: Rural Entrepreneurs, Knowledge, Prospects, Resource Availability,

Business Performance, Textile Entrepreneurship.

1. INTRODUCTION

Entrepreneurship is often conceived as innovation, creativity, the establishment of

new organizations or activities, or some kind of novelty. Entrepreneurial development can
often be a cost effective economic development strategy. Entrepreneurship in rural areas is
finding a unique blend of resources, either inside or outside of agriculture. This can be
achieved by widening the base of a farm business to include all the non-agricultural uses that
available resources can be put to or through any major changes in land use or level of
production other than those related solely to agriculture. Thus, a rural entrepreneur is
someone who is prepared to stay in the rural area and contribute to the creation of local
wealth. Moreover the economic goals of an entrepreneur and the social goals of rural
development are more strongly interlinked than in urban areas and relatively has large impact
on a rural community

The Indian textile industry is as old as the world textile industry. In fact the first
known cotton cultivation seems to be from India. However more and more textile industry
has been push to other states of India are increasingly gaining the attention of the world
textile buyers. The changing global environment raises questions about the ability of small

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textile businesses in rural areas to share its potential benefits to the economic growth. Most of
them, lack access to the technologies and market information that would enable them to
comply with quality specifications and effectively respond to emerging opportunities. They
rarely have access to credit and the other financial services necessary to compete in the
modern world. Many face high transportation and input costs that further reduce their ability
to compete. Additionally, there are some whose cultures place greater value on the
maintenance of traditional ways of life, rather than on material success in a competitive
world. Apart from these disadvantages, there is the wider question of whether the economic
and institutional infrastructures, and the structure of policies, are favourable for small
enterprises to succeeding international competition. In short, globalization presents real
dangers to the rural entrepreneur, to set against the possible advantages for the wider
economy.

Rural entrepreneurship implies entrepreneurship emerging in rural areas. There is a

growing need for rural entrepreneurs because industrial units undertaken by rural
entrepreneurs are providing much employment to men than machines. Institutions and
individuals promoting rural development now see entrepreneurship as a strategic
development intervention that could accelerate the rural development process. Rural
development is a key element of strategies to reduce poverty and create income and
employment opportunities. It is important to unleash and harness the creativity of grassroots
entrepreneurs but they are posed with many challenges, the biggest being these grassroots
inventions don't scale up. To overcome these challenges and promote rural entrepreneurship,
support roles are required. This study considered the rural entrepreneurs involved in textile
business, it consist of power loom, auto loom, doubling, dyeing, garments, and yarn winding
and so on. Moreover, it focuses on rural entrepreneur knowledge; various prospects and
business performance of rural entrepreneurs are examined.

2. LITERATURE REVIEW

Santhi & Nagananthini (2014) examined the role and participation of government
agencies and financial institutions in growth and development of women entrepreneurship.
Kumar & Sardar (2011) revealed the symptoms of industrial sickness, also gives the ample
amount of knowledge about the various credit schemes of government. Muthu & Ranga
(2018) examined that entrepreneurs should be provided credit at reasonable interest without
insisting on collateral security in the form of physical assets. Balu (2012) analysed the future
challenges of women entrepreneurs and also had identified certain special factors which need
to be considered for promoting female entrepreneurship. Rathna & Kannan (2018) revealed
the problems of women entrepreneurs such as economic independence, establishing their own
creative idea, establishing their own identity, achievement of excellence, building confidence,
developing risk-taking ability, motivation and equal status in society. Jayadatta (2017)
revealed that enabling the public to think positively, creatively and engaging them
purposefully in entrepreneurship activities is most important for the development of rural
areas. Shivani (2017) showed that a high level of leadership skills with clear understanding of
market, excellent communication skills, maturity to see things in right perspective along with
the ability to take calculated risks are required on the part of the entrepreneur. Singh (2011)
incidence of sickness has been growing in such large proportions that in the wake of
industrial development. Vedanthadesikan & Pathmanathan (2016) revealed that the changing
global environment raises questions about the ability of traditional, small-scale businesses in
rural areas to share the potential benefits offered by the changing environment.

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3. OBJECTIVES OF THE STUDY

This study has been initiated with the following objectives:

1. To test out the demographic profile of rural entrepreneurs involved in textile business.
2. To investigate the knowledge level of rural entrepreneurs on textile business.
3. To examine the existence of various prospects to textile based rural entrepreneurship.
4. To analyse the impact of resource availability on business performance of rural
entrepreneurs.

4. RESEARCH METHODOLOGY

The study aimed to analyse the knowledge level, prospects and business performance
of rural textile entrepreneurship. This study is carried out in the rural areas of Madurai district
of Tamil Nadu. Population is rural entrepreneurs involved in textile business, 100
entrepreneurs have been identified at different parts of the district. Field survey through
questionnaire is administered to collect data. This study is formulated on the premise of
descriptive design. Probability sampling technique, especially simple random sampling is
used for collection of data. The survey instrument is prepared with four parts, that is first part
deals with demographic profile, second part collect knowledge level of rural entrepreneurs,
third part covers existence of various prospects, and fourth part focus on resource availability
on business performance. Prior to data collection, a pilot test was conducted to ensure
comprehensiveness, clarity and reliability of the questionnaire. The study considered 20 rural
entrepreneurs so as to perform pilot study. Statistical tools used for analysis includes simple
percentage, chi-square test, descriptive analysis, factor analysis and regression to sum up the
data collected. In the survey instrument, the scale 1 to 5 have been developed, where 5 for
strongly disagree and 1 stands for strongly agree.

5. RESULTS & DISCUSSIONS

5.1. Analysis of Demographic Profile
Demographic profile of rural entrepreneurs is presented in table-1.

Table – 1: Analysis of Demographic Profile

Characteristics Distribution Frequency Percentage
Male 88 88%
Gender
Female 12 12%
Less than 30 years 14 14%
31 - 40 years 45 45%
Age
41 - 55 years 29 29%
56 years & above 12 12%
Illiterate 11 11%
Educational Up to HSC 39 39%
Qualification Degree/Diploma 28 28%
PG/Professional 22 22%
Less than Rs.25,000 34 34%
Rs.25,001 - 50,000 27 27%
Monthly Income
Rs.50,001 - 75,000 23 23%
Rs.75,001 & above 16 16%

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Power loom 39 39%

Dyeing 15 15%
Nature of Business
Doubling 22 22%
Others 24 24%
Own 29 29%
Type of Operation
Job work 71 71%
Manual 65 65%
Type of Technology
Automotive 35 35%
(Source: Primary Data)

Table-1 reveals the outcome of demographic profile of rural textile entrepreneurs.

Gender of rural entrepreneurs found that 88% are male and 12% are female. Age of the n
entrepreneurs consists of 14% are in less than 30 years, 45% are in 31 – 40 years, 29% are in
41 – 55 years and 12% are in 56 years and above. Educational qualification shows 11% are
illiterate, 39% are completed school education, 28% are completed undergraduate or diploma
and 12% are completed post graduation or professional degree. Monthly income of rural
entrepreneurs shows that 34% are in less than Rs.25,000, 27% are in Rs.25,001 – 50,000,
23% are in Rs.50,001 – 50,000, and 16% are in Rs.75,001 and above. Nature of business of
rural entrepreneurs includes 39% of them engaged in power loom, 15% of them engaged in
dyeing, 22% of them engaged in doubling, and 24% are engaged in auto looms, garments,
and other textile business. Type of business operation reveals that 29% are own production,
58% are undertaking job work. Type of technology is 65% of them employed manual
operation and 35% of them employed automotive technology.

5.2. Knowledge on Textile Business

Knowledge level of rural entrepreneurs towards textile business is analyzed.

Therefore, the relationship between knowledge of rural textile entrepreneurs and nature of
business is analyzed with chi-square test at 5% level of significance. The results are presented
in table-2.

Table-2: Knowledge on Textile Business

Knowledge on Textile Business
χ² Sig.
Availability of labour 10.23 0.89
Labour cost 12.57 0.74
Variety of yarn and its quality 17.35 0.01
Financial requirement 13.26 0.72
Fixed and variable cost of operation 11.91 0.62
Tax and other duties 12.56 0.54
Knowledge on labour law 11.24 0.68
Government support 10.47 0.15
Market movements 13.64 0.65
External disturbances 12.39 0.56
(Source: Primary Data)

Table-2 presents the results of chi-square; it shows that there is significant

relationship between knowledge of rural textile entrepreneurs and nature of business. The
calculated value for all cases is greater than the table value. This implies that rural

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entrepreneur’s knowledge is varied as per the nature of business activity. It is concluded that
rural textile entrepreneurs knowledge on business varied based on the quantum of work,
investment, and operational method.

5.3. Prospects for Rural Textile Entrepreneurs

Rural entrepreneurs involved in textile business have various prospects to carry out
their business. Therefore, various prospects favouring rural textile entrepreneurship is
examined. This study aimed to analyze the different prospects and its impact on success of
rural entrepreneurs. This study used t-test to evaluate the computed mean value based on the
opinion on rural entrepreneurs. In this t-test the computed mean value of the rural
entrepreneurs is compared with hypothesized mean value 3 to get the significance value.
Consequently, its results are presented in table-3.

Table-3: Prospects for Rural Textile Entrepreneurs

Std. Std. Error Sig (2
Variables Mean t-value
Deviation Mean tailed)
Low cost technology usage 2.75 1.06 0.52 -15.26 .000
Sufficient raw material supply 3.67 0.99 0.26 14.75 .000
Better growth potential 2.72 1.22 0.41 -16.32 .000
Easy marketability 4.34 1.62 0.32 19.24 .000
Low cost labour 2.12 1.15 0.28 17.53 .000
Enough government support 3.75 1.33 0.16 10.89 .000
Financial support from banks 4.25 0.79 0.37 24.25 .000
Family support and guidance 3.84 1.54 0.23 31.27 .000
Bridge finance from banks 2.45 0.88 0.55 -15.82 .000
Low risk in business 2.85 0.97 0.42 -13.15 .000
Protective measures 3.28 1.61 0.48 18.12 .000
High income potential 3.76 1.32 0.21 14.62 .000
Availability of power supply 3.11 1.21 0.19 18.26 .000
Resource accessibility 3.24 1.08 0.35 17.53 .000
Low investment 2.97 1.42 0.27 13.57 .000
(Source: Primary Data)

Table-3 shows that the mean value of prospects for rural textile entrepreneur ranges
from 2.45 to 4.34. In particular, it is identified that the variable such as sufficient raw material
supply, easy marketability, government support, financial support, family support, protective
measures, high income potential, power supply, and resource accessibility with its mean
values are strictly greater than 3. It is found that the rural entrepreneurs are strongly agreed
the t-values are greater than ‘3’ that is, 14.75, 10.89, 24.25, 31.27 18.12, 14.62, 18.26 and
17.53 which are statistically significant at 5% level. The rural entrepreneurs are disagreed
about low cost technology usage, better growth potential, bridge finance from banks, and low
risk in business and the t-values are -15.26, -16.32, -15.82 and -13.15. Therefore it could be
concluded that the prospects are highly favourable to the rural textile entrepreneurs.

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-5.4. Impact of Resource Availability on Business Performance

Business performance of textile units managed by rural entrepreneurs widely depends

upon the resource availability. Resource availability can be classified in the form of financial
support, marketing support, operational efficiency and personal ability. Accordingly, business
performance of rural textile entrepreneurs is measured. This study has been commenced with
the following conceptual framework given in figure-1.

Figure-1: Conceptual Framework

Financial Support

Marketing Support Business

Resource
Availability Performance
Operational Efficiency

Personal Ability

The following hypothesis is proposed, to test the significant different between

resource availability and business performance.

H0: There is no significant difference between resource availability and business

performance.

Impact of resource availability on business performance has been examined through

factor analysis and regression co-efficient. KMO and Bartlett’s test results are presented in
table-4.

Table-4: KMO and Bartlett’s Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy .815
Bartlett’s Test of Sphericity Approx. Chi-Square 542.62
Df 91
Sig. .000
(Source: Primary data)

Table-4 shows the KMO measure of sampling adequacy. The analysis confirms that
the factor analysis data is appropriate with the value of 0.815, which is suitable of factor
analysis. Bartlett’s test has been executed and its result allocates an extremely significant
result with p=0.000 (p<0.001) and consequently factor analysis result is correct.

Table-5: Rotated Component Matrix

Component
Variables
1 2 3 4
Working capital .821 .098 .126 .112
Rate of interest for loans .799 .175 .132 .053

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Knowledge on financial management .748 .163 .157 .062

Finance accessibility .654 .155 .130 .126
Plough back of profit .626 .164 .152 .147
Market stability .133 .801 .025 .159
Global market support .231 .748 .097 .234
Easy marketing procedure .097 .694 .156 .102
Government restrictions .115 .656 .230 .063
Use of technology .211 .145 .784 .068
Production capacity .167 .168 .712 .122
Trained employees .225 .125 .655 .214
Involvement .212 .254 .084 .776
Risk taking capacity .065 .095 .138 .712
Passion to develop .038 .122 .120 .673
(Source: Primary data)

Table-5 reveals the results of rotated matrix; it presents that all antecedents of
resource availability, such as financial support, marketing support, operational efficiency, and
personal ability can be accepted with characteristics essential for restructure and
condensation. The first factor is loaded with five factors; it deals with working capital, rate of
interest, knowledge on finance, finance accessibility and plough back of profit. The second
factor deals with market stability, global market support, easy marketing and government
restrictions. The third factor consists of three factors, like use of technology, production
capacity, and trained employees. The fourth factor deals with involvement, risk taking
capacity, and passion to develop. This condensation is possible since the characteristics are
associated. The score given to any one attribute is partly the result of the effect of other
attributes.

Table-6: R-Square and Durbin-Watson Test

Model R Square Dutbin-Watson
1 0.693 1.681
(Source: Primary data)

Table-6 reveals the result of R-Square and Durbin-Watson test. Consequently, R-

Square test result of 0.693 can be calculated and admitted for the regression analysis. The
Durbin-Watson test result of 1.681, an indication that the autocorrelation is approximately
reaching to zero or there is a significant variation exist between both variables.

Table-7: Results of Anova Test

Model F Sig.
1 73.256 0.000
(Source: Primary data)

Table-7 shows the Anova results, it confirms that the four antecedents of resource
availability are not all equal to each other and could be used to estimate the dependent
variable, business performance as is authorized by F value of 73.256 and strong significance
level of 0.000 (p<0.05).

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Table-8: Results of Regression Coefficient

Collinearity
Standardized
Variables T Sig. Statistics
Beta Coefficient
Tolerance VIF
1 (Constant) .387 0.671 .631 .463 2.159
Environmental factors .344 5.573 .000 .676 1.541
Easy marketability .281 5.743 .000 .614 1.422
Input availability .356 4.428 .000 .711 1.361
Support from government .251 4.923 .000 .578 1.683
(Source: Primary data)

Table-8 divulges the results of all variables are significant (p<0.001) with high beta
(0.344, 0.281, 0.356 and 0.251) and t-values (5.573, 5.743, 4.428 and 4.923). The VIF value
of less than 10 is found for all variables. It directly substantiated the problem of multi-
collinearly have not subsisted and all data are mutually exclusive. The results showed that
financial support, marketing support, operational efficiency, and personal ability have
significant impact on business performance. It is actually confirmed by examining the t-
statistic for all the independent variables such as, financial support, marketing support,
operational efficiency, and personal ability have significant relationship on account of strong
significant level (p<0.05) with business performance, indicating that the null hypotheses are
incorrect and can be rejected. Hence, there is significant difference between resource
availability and business performance.

6. FINDINGS AND CONCLUSION

The entrepreneurial activity at anytime is dependent upon a complex and varying

combination of socio-economic psychological and other factors. Demographic profile showed
that 88% are male, 45% are in 31 – 40 years of age, 39% are completed school education,
34% are in the monthly income of less than Rs.25,000. Nature of business shows that 39% of
them involved power loom business, 58% are undertaking job work, and 65% are employed
manually operating technology. Rural entrepreneurs have knowledge on textile business,
because there is deviation found with respect to the nature of business. Sufficient raw
material supply, easy marketability, government support, financial support, family support,
protective measures, high income potential, power supply, and resource accessibility are
better prospects of rural entrepreneurs. The results of factor analysis and regression
coefficient showed that financial support, marketing support, operational efficiency, and
personal ability have significant impact on business performance. This study concluded that
rural entrepreneurs have knowledge, access various prospects and resource availability have
significant effect on business performance.

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