The pace at which women are taking up entrepreneurial roles is changing fast in India, and how!
Seventy-seven years of independence have ensured that this development is not just limited to tier-1 cities that have excellent business infrastructure, proper facilities, and more opportunities.
Achieving ‘Amrit Kaal’ Goals
Women in tier-2, -3, and -4 areas, too, are making strides across business platforms, raising the bar so high in a society where they have historically been given fewer opportunities.
But why were there fewer opportunities for women all these years? Besides the lack of adequate support from family and friends, it was also the lack of financial resources and technical support that hindered their growth.
The government seems to have ambitions to power India among the top three global economies by end of ‘Amrit Kaal’, that is the next 25-odd years. And to achieve the same, it is imperative that women entrepreneurs are given that booster shot.
To put numbers into perspective, according to the Sixth Economic Census (2013), women constitute around 14 per cent of the total entrepreneurship in India. Additionally, a study by McKinsey Global Institute estimated that advancing gender equality in India could add $770 billion to its GDP by 2025. A significant portion of this potential gain can come from promoting women’s entrepreneurship.
What the government and lenders are up to
So how can the financial ecosystem in the country be utilised so that more women entrepreneurs emerge? Banks and non-banking lenders play a significant role by providing them with access to capital, financial services, and support. Some of the ways are:
Access to Capital: Various financing options such as business loans, lines of credit, and microfinance, are tailored to the specific needs of women-owned businesses. Providing affordable and flexible financing options through a collateral-free approach is crucial to fostering entrepreneurship among women.
Financial Education and Training: Many women may lack the necessary financial literacy and business management skills, and certain financial institutions working on the ground at the hinterlands are ensuring that the women develop the skills needed to manage their finances, create business plans, and make informed financial decisions.
Mentorship and Networking: Some institutions are also providing the budding entrepreneurs with connections to successful business leaders and access to support networks.
Government and NGO Partnerships: Collaboration with government agencies and non-governmental organisations (NGOs) also enhances the impact of banks and lenders’ efforts to support women entrepreneurs. Additionally, the government, too, has numerous schemes to support such women entrepreneurs.
Some of them are the Credit Guarantee Scheme for Micro and Small Enterprises (CGS), Self Reliant India Fund, Pradhan Mantri Mudra Yojana (PMMY), Stand Up India Scheme, Mahila Udyam Nidhi Scheme, and Annapurna Scheme, among others.
These schemes are instrumental in providing financial support and opportunities for women entrepreneurs across India. They not only promote economic empowerment but also contribute to job creation, skill development, and overall economic growth in the country.
Reaching out to remote areas
Budding NBFCs and other lenders — that are mostly present in remote locations where big bankers do not have much reach — also ensure that these entrepreneurs have easier access to loans along the lines of their peers in tier-1 and -2 cities.
They are bridging the gap where big financial institutions have either not reached or shown little interest. These small lenders are also going digital — in line with the government’s vision of digital India and financial inclusion — simplifying the loan application process for people in far-flung areas.
With technology at hand, it’s not rocket science anymore for institutions to make use of data analytics and machine learning algorithms to make better credit-related decisions.
Empowering women through entrepreneurship can have a ripple effect on their families and communities as well, as women tend to reinvest a significant portion of their income into their households and children’s education. It’s important to note that there is still significant untapped potential. Encouraging these entrepreneurs and providing them with the necessary support and resources, thereby addressing gender-related barriers, are essential steps to harness this potential fully and move towards a developed economy.
(The author is CEO and co-founder of Sugmya Finance Pvt Ltd)
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