Effectuation thinking and the manifestation of socio-cultural complexities in Sri Lankan female entrepreneurs' business decisions
Female entrepreneurs in developing countries, including Sri Lanka, face many economic, cultural and social constraints in managing their businesses. Women in developing countries often lack steady employment and stable work histories, adequate collateral and verifiable credit histories (Ledgerwood & Earne, 2013). Many are illiterate and therefore unable to complete the paperwork needed to get conventional loans. To increase women's access to credit, microfinance institutions (MFIs) such as the Grameen Bank in Bangladesh, where microfinance originated, extend very small loans (microcredit) to impoverished borrowers - often women. As well as supporting entrepreneurship, microcredit has been used to help manage household risk and promote investment with an overall goal of poverty alleviation (Ledgerwood & Earne, 2013). Despite the lack of consensus about their impact, microcredit mechanisms are widely considered a sustainable way of financing women entrepreneurs and improving their well-being. For example, Pitt and Khandker (1998) and Khandker (2005) found that women increased their non-land assets and increased their consumption expenditure through microcredit. Similarly, Deininger and Liu (2013) found benefits associated with women's nutritional intake and general empowerment. Nevertheless, microfinance schemes are also criticized for maintaining gendered power structures and oppressive contextual practices (Ali, 2014; Karim, 2008; Wilson, 2015). For example, due to power relations within the household in a patriarchal society (Wilson, 2015), MFI loans are often controlled by men in the family (Garikipati, 2008) even though MFIs grant loans to women. Similarly, microfinance schemes are said to reinforce gendered roles and responsibilities requiring women to work close to home, balance income generation and household work, and take care of children and families (Karim, 2008; Wilson, 2015). Other social and cultural norms also influence women's borrowing and repayment practices. For example, the norm which regards women as custodians of family honour means wives, daughters or daughters-in-law have to make sacrifices to repay loans to avoid dishonouring the family (Ali, 2014; Karim, 2008; Wilson 2015). Given these controversies, studies of women entrepreneurs who use microcredit (termed micro-entrepreneurs here) need to take careful account of context.