Dalit Entrepreneurship and Access to Credit: Testing Ambedkar’s Market-Entry Hypothesis

Abstract

This paper empirically analyses B. R. Ambedkar’s hypothesis which claims that the Dalits (previously referred to as the untouchables) face protective mechanisms hinged to the structural barriers of entrepreneurial markets. This study tries to understand the political economy of credit access which the state entrepreneurially stimulates alongside persistent caste exclusion. Based on policy documents and secondary data, the research argues that Dalit entrepreneurs bear the brunt of credit discrimination to the highest degree, which concretely means that they are less likely to receive formal loans, are lent lower amounts of money, and are charged exorbitant collateral. Affirmative action programs that are intended to address these gaps are systematically frustrated because of the social capital deficits and institutional discrimination prevalent in the banking system. This helps validate Ambedkar’s remarkably relevant observations on caste and economic domination, which propose that exclusionary financial mechanisms are the face of controlled social domination, not market domination. This paper claims that credit access is primarily a political problem because of the intricate caste credit control mechanisms. This is followed by suggestions for caste conscious affirmative finance policy, which include improving lending data transparency, strengthening inclusive institutions, and public procurement linkage, to remove caste barriers and deepen economic democracy.