Soft skills training helps grow businesses in rural India

Valarmathi was among the first in her family of laborers to graduate. But she couldn’t find a job. So, she did something completely different - she opened a small saree shop near her home in Tamil Nadu’s Salem district.  Recognizing the growing demand for trendy sarees in her area, she sourced her products from nearby garment hubs like Chennai and Tirupur. As her business grew, she employed four others.  

With success fueling her ambitions further, she ventured into online sales via WhatsApp, and diversified into the supply of flowers for weddings and cultural events near her rural home.

Becoming a business owner was important to Valarmathi as it meant breaking the cycle of poverty she had always known. “If I had remained a laborer,” she said confidently, “my family would have been stuck in the same situation for generations. That’s why I chose to step out on my own.”

Valarmathi’s story is one of the many that exemplify the growing trend toward entrepreneurship in rural India.

Entrepreneurship is a Necessity

Over the past two decades, India’s economy has undergone a structural shift, with more   people moving out of agriculture. Women-led start-ups have grown, almost doubling from 10 percent in 2017 to 18 percent in 2022. However, many first-time micro and small business owners find it challenging to grow their enterprises. As a result, a large number of them remain at subsistence-levels, with limited prospects for growth. Women entrepreneurs, especially, have fewer resources and opportunities to improve their business skills, while caregiving duties limit the time they can devote to expanding their enterprises.

Emerging evidence suggests that psychology-based trainings that develop business- oriented personality traits can help micro and small business owners improve their decision-making skills and, in some cases, narrow the performance gap between male- and female-managed enterprises.

Based on these findings, the World Bank’s South Asia Gender Innovation Lab, in collaboration with the Bank’s agriculture team, tested the impact of soft skills training on the business performance of women entrepreneurs in Tamil Nadu who were part of the World Bank supported Tamil Nadu Rural Transformation Project, known locally as Vazhndhu Kattuvom .

What is Personal Initiative Training?

The soft-skills training they provided – known as Personal Initiative Training, or “PI Training” for short - is a psychological training program designed for entrepreneurs. Its primary goal is to foster a proactive mindset, enabling entrepreneurs to grow their businesses, create jobs, and contribute to poverty reduction.

This form of training is new to South Asia where the cultural and entrepreneurial landscape differs significantly from other parts of the world. To test the training’s effectiveness in India, therefore, the World Bank’s Gender Lab developed a culturally sensitive curriculum along with its partners Doorways and Hand in Hand India.

Over the course of 12 weeks, 1,300 entrepreneurs – both women and men – hailing from 10 districts in Tamil Nadu, participated in weekly training sessions of three hours each. The training focused on developing critical skills such as problem solving, self-starting behavior, creativity, innovation and resourcefulness, while requiring participants to actively implement what they had learnt.

Note: The curriculum and training were delivered in Tamil.

New ideas, greater income

Early results from the pilot are promising. “I now have many new ideas, and my income has increased,” said Valarmathi, noting the role of the training in encouraging her to experiment and implement new strategies.

Usha, a single mother from Trichy district, used to struggle to raise her family while running a ladies' tailoring shop. The training boosted her confidence and equipped her with the skills and motivation to streamline her operations and hire an assistant. Since then, Usha has not only turned her enterprise around but has also started a new venture. She now aspires to be a role model for aspiring entrepreneurs.

Prabhu, on the other hand, used to run a standard indigo powder business in Villupuram District. Inspired by the training, he boosted his earnings by upgrading his machinery and introducing new product lines. Now, Prabhu has purchased more land to expand his enterprise.

Other participants highlighted how they are integrating the concepts they learnt into their daily operations. They are finding creative ways to drive the growth of their businesses, offering delivery services, adopting e-payments, and focusing on consumer satisfaction, marketing, product innovation and diversification. Many are also showing greater confidence in overcoming challenges.

Early results

The demand for such interventions is high - about 70 percent of the business owners who were offered the training took part in the program.

In a few months' time they will be surveyed again to compare their outcomes with those who did not receive the training.  They will then be tracked over a further 18 months to evaluate the training’s medium-term impact on their businesses and livelihoods.

As for Valarmathi, she now plans to use her newly acquired skills to launch a new clothing venture. “I am very happy with the growth of my business. This training will definitely help me become the businesswoman I aspire to be,” she said, confident that the program will clear the path for her, and others like her, to create a brighter and more sustainable future.