Empowerment or Entrapment?

On paper, the story of Lakshmi—a 40-year-old mother of four and wood block printing entrepreneur—sounds like a poster child for women’s economic empowerment. She runs a successful service-based business model, operates four printing tables (her own Kharkhana or workshop), and specializes in popular techniques like Daboo and Bagru print. She employs two laborers, uses both bank accounts and mobile payments, and has secured a ₹1.50 lakh loan from a bank through her savings group, earning a stable monthly income.

She can be an inspiration, but only if you choose to ignore the context and other stark realities of her life.

The Context of the Informal Value Chain

My interviews within this craft cluster in Rajasthan reveal that Lakshmi is, in reality, a sub-contractor at the very bottom of a complex, distributed textile value chain.

• Piece-Rate System: She gets paid a piece-rate by her clients, who are other larger Kharkhanas in her town.

• Oral Agreements: As is common in the informal textile economy, there are only oral agreements and no legal contracts, leaving her exposed.

• Extended Credit Period: Crucially, Lakshmi gets paid forty-five days after she fulfills her orders.

This extended credit period is a mechanism by which large retail enterprises effectively transfer the risk of doing business down the value chain to the smallest contributors. Lakshmi bears the full burden of risk on her slender shoulders.

The Trap of the Loan Repayment

Lakshmi has availed a loan, thanks to her affiliation with a savings group, which she invested in her business. Now, she must keep up with the fixed, weekly repayment schedule.

This fixed debt structure creates a powerful constraint: she must accept whatever orders she gets and take whatever price is offered to her. She cannot hold out or negotiate better wages because she is constantly battling to make her weekly repayments.

She is effectively trapped between low wages and fixed loan repayments. This reality forces us to ask: Is this empowerment, or is it a form of economic entrapment?

The Path to Resilience

Lakshmi’s position is challenging, but not untenable. Her required shift is structural, not financial or technical. She needs to:

1. Expand Networks: Get work from outside her hometown.

2. Move Upstream: Connect with clients who are closer to the final consumer to capture higher margins.

3. Stop Sub-Contracting: Transition from being a piece-rate sub-contractor to an independent producer.

These changes are not accomplished by finance or technology alone but through strategic social and market interventions. In this case, perhaps social change and market access need to precede purely economic growth.