Amongst the 6.33 crore Micro, Small and Medium Enterprises (MSMEs) operating in India, only a little over 20% are owned by women. Though this number has increased significantly in the last few years, there is still an ocean of untapped potential where women entrepreneurs are concerned. After all, with lower risk, higher profitability and a more loyal clientele, women entrepreneurs clearly present an attractive business segment.
Part of the reason for this disparity in market presence could be cultural debris: women often face social stigma, a lack of familial support and, sometimes, even ridicule when pursuing entrepreneurial activity. But, there are also several other administrative and infrastructural gaps in the system that are keeping women from starting their own businesses, foremost of which is the rampant lack of awareness on government and private programmes designed to incentivise women-run businesses; only 17% of women entrepreneurs were aware of the financial schemes available to them.
The Indian government has placed a healthy focus on encouraging women to start their own enterprises through numerous new schemes, some of which were introduced even during the current pandemic:
1. The Startup India platform has launched a pan-India entrepreneurship programme for women, known as WING. The programme includes two kinds of workshops: advanced level for existing entrepreneurs and basic level for aspiring entrepreneurs. The basic workshops conduct knowledge sharing exercises on how to pitch ideas and start off one’s entrepreneurial journey, while the advanced workshops are focused on capacity-building trainings.
2. Rashtriya Mahila Kosh, an autonomous body under the patronage of the Ministry of Women and Child Development, has several loans under their schemes to help women create wealth and assets. To encourage new and smaller women-led organisations, one of their schemes gives out loans of up to Rs.10 lakh to organisations with as little as six months’ experience in thrift and credit. There are also other types of loans such as a Gold Credit Scheme and Working Capital Term Loan Scheme.
3. The Stand-up India scheme ensures bank loans between Rs.10 lakh and 1 crore for at least one woman per bank branch in the country. The loans are for greenfield enterprises in the sectors of manufacturing, services or trading. In the case of non-individual enterprises, at least 51% of shares and the controlling stake must be held by a woman.
4. Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched to encourage entrepreneurial culture and create an ecosystem of growth for micro enterprises. The scheme provides loans up to Rs.10 lakh to non-corporate, non-farm small and micro enterprises. The loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs.
5. The Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme for Women is an effort by the government that seeks to empower women through credit, training, development and counselling related to trades, products, services et al. This initiative partners with several NGOs for, and covers up to 30% of the project cost as a grant.
These schemes are well-considered and can be truly beneficial, but they aren’t the only ones available to women entrepreneurs. Many private Investors have also shown interest in setting up funds to encourage entrepreneurship amongst women and increase the availability of capital to female entrepreneurs. Access to capital for an early stage MSME is crucial, and with the launch of female-focused funds, as well as the growing presence of women in venture capital and private equity firms, this longstanding barrier is quickly dissolving. Incubator firms are even going beyond financial assistance to encourage women-led enterprises by conducting workshops and recruiting female mentors. These mentors often go far beyond traditional obligations and help women entrepreneurs conquer hurdles associated with gender roles.
The efforts of the various aforementioned stakeholders have proven effective in getting more women involved in entrepreneurial activity in the MSME sector. However, there is still a long way to go. India ranks number 3 in the world in entrepreneurship gender gap, and only 33 percent of early-stage entrepreneurs in the nation are women. A national analysis on finance and support for women-owned MSMEs is urgently needed to draw up India-specific strategies that can help create a more conducive environment for female entrepreneurs. More effort is required on the parts of both, the government and private players, to disseminate awareness on existing schemes, as well as develop further incentives that propel women towards entrepreneurship.