The handloom sector in India is important from the point of view of its size and employment potential. Moreover, the sector provides employment to the most vulnerable sections of the Indian population, viz., women, Scheduled Castes (SCs), Scheduled Tribes (STs) and Other Backward Castes (OBCs). Out of the 27.83 lakh handloom households engaged in weaving and allied activities across the country, 10% handloom households belong to SCs, 22% to STs and 41% to OBCs. Nearly, 77% of the handloom workforce comprises women and most of these women are located in rural areas. The North East (NE) states of India have the largest concentration of handlooms in the country (more than 65% of the total looms). However, a large majority of the looms (62%) are engaged in domestic production only. This paper attempts to understand the financial management practices of micro handloom enterprises predominantly run by women in a remote tribal cluster, Thenzawl in Mizoram. The paper identifies the sources of fixed capital and working capital for the enterprises and the problems faced by them related to finance.

Handlooms represent an age-old tradition of the rich cultural heritage of India. This sector is important from the point of view of its size and employment potential. The Indian handloom industry is the largest in the world. In fact, it is the second largest employment provider after agriculture. There are nearly 27.83 lakh handloom households engaged in weaving and allied activities, out of which 87% are located in rural India and 13% in urban India. The North East (NE) states of India have the largest concentration of handlooms in the country (more than 65% of the total looms). Assam has the largest number of looms in the region, followed by Manipur, Tripura, Nagaland, Arunachal Pradesh and Mizoram. However, a majority (62%) of the looms in NE states are engaged in domestic production only. Mizoram has a handloom workforce of 43,528 persons working on 23,938 looms (NCAER, 2010).

Thenzawl, a hamlet located in Serchhip District of Mizoram, has developed as a handloom cluster with about 205 micro-enterprises operating in the cluster. According to the Census 2001, Thenzawl has a population of 5,519, with almost an equal proportion of males and females and a literacy rate of 83% (Directorate of Economics & Statistics, 2008).

The formation of Thenzawl handloom cluster as a center of commercial production can be traced to 1982, with a humble beginning by four micro-enterprises operating with eight looms. In the course of three decades, the cluster has shown remarkable growth in terms of number of enterprises, number of looms and sales turnover. There were 205 enterprises operating in the cluster on December 2010. Moreover, it was observed that about 70% of the sample enterprises owned less than four looms and almost 45% of the sample enterprises owned only one or two looms. These enterprises were mostly being run as traditional enterprises. All the entrepreneurs in the cluster belonged to the Scheduled Tribe (ST) community and all were Christians. Interestingly, 98% of the entrepreneurs in the cluster were women. Creditably, these women have chosen to be entrepreneurs operating their looms on a commercial basis rather than be wage earners unlike their counterparts in Bihar, Orissa and Uttar Pradesh.

Entrepreneurship Development Journal, Microenterprises in India, Micro, Financial Services, Small and Medium Enterprise, Indian Economy, Microentrepreneurial Ventures, Social Development, Women Entrepreneurs, Sociocultural Traits, Indian Culture, Performance Measurement, Organizational Traits.