“As women achieve power, the barriers will fall. As society sees what women can do, as women see what women can do, there will be more women out there doing things, and we’ll all be better off for it.”
Ruth Bader Ginsburg
India’s gender balance is among the lowest in the world. Improving it isvital, not just for gender equality but for the entire economy. For India to become a $5 trillion economy, entrepreneurship by women must play a more significant role.
There can be no doubt about the potential of a businesswoman. Women are naturally inclined towards multi-tasking, and using those skills at the workplace has led to numerous success stories. Amid an IPO rush in India in recent years, the only profitable and popular startup to list on the market was Falguni Nayar’s Nykaa.
According to a NASSCOM report, from 2014 to 2019, the percentage of women-led start-ups has gone up from 8 percent to 13 percent. 10% of Indian startup unicorns are women-led, and 20.37% of women are MSME owners, which account for 23.3% of the labor force. Startups founded or co-founded by women generate 10 percent more cumulative revenue over five years. Also, they employ more women than men. Women-led startups also provide a 35% higher return on investment compared to those by men.
Whether building new-age ventures or paving the way for aspiring women entrepreneurs, women entrepreneurs in India are leading a cultural revolution. Their role in the business world is pivotal and has led to enhancing the economic growth of India, employment generation, and industrialization.
The number of women entrepreneurs in India is growing but needs to be more encouraging. There are reasons women continue to shy away from pursuing the entrepreneurial path. One of the key reasons is that society and women tend to feel the need for a more settled lifestyle through corporate careers. The investor community has a preponderance of men. It can create an unconscious bias against women entrepreneurs wishing to raise money. Women entrepreneurs tend to lack confidence in areas such as sales or negotiation and fundraising, traditionally seen as male-dominated fields.
Women’s Participation in Startups can be increased by
- Increasing their risk appetite: Risk-taking is a major component of entrepreneurial activity. Women are far less likely to receive venture capital. Women often lack financial freedom and the right to make independent decisions. The funding environment in India has massive gender biases. Women-led businesses in the country lack access to capital due to the prejudices of investors and other factors. But women, with adequate support, are managing to take risks as and when required.
- Bringing Women to Leadership: The key drivers of women’s entrepreneurship are investments in infrastructure and education, which predict a higher proportion of businesses started by women in India. Efforts like better education and health and reducing wage differentials encourage more efforts and result in better career-advancement practices, thus promoting talented women into leadership and managerial roles.
- Women Role Models for Women: Higher female ownership of local businesses in related industries predicts higher relative female entry rates. Existing women entrepreneurs will actively reach out to other aspiring female entrepreneurs and provide them with guidance. Organizing seminars or workshops for women aspiring to be the owners of local businesses is one of the fruitful ways to do it.
- Encouraging Women Investors: The majority of investor groups are composed of and led by men, and investment committees are male-dominated. Only 2% of the angel investors are women. To overcome such unconscious biases, at least one or more women investors should be included in the investment group. If there is a diversity of gender in the decision-making group, women needing funds will get a fairer hearing and possibly receive more favorable decisions.
Some VC Funds Helping Women Entrepreneurs In India:
- Kalaari Capital: Kalaari Capital is an early-stage, technology-focused venture capital firm. Through its CXXO initiative, Kalaari Capital is leveling the playing field for women founder-CEOs.Under the CXXO Program, women founders get access to capital, networking opportunities, and mentoring from industry leaders which increases the odds of succeeding.
- Saha Fund: It is the first venture capital fund for global women entrepreneurs. The firm has backed several women-led startups investing in healthcare, finance, education, future of work technologies, and consumer tech.
- AWE (ACHIEVING WOMEN EQUITY) Funds: The firm primarily focuses on industries where it can increase the participation of women while leveraging its networks to add value to its portfolio companies across healthcare, food & agri, sustainability (Green Energy & Water), education, fintech, and others.
- She Capital: The firm empowers the next generation of high-growth female-focused businesses to scale. It is backed by the Small Industries Development Bank of India and international and local family offices while providing business opportunities and mentoring services to enhance their entrepreneurial skills.
- StrongHer Ventures: StrongHer Ventures is the second global women-focused tech fund focusing on pre-seed and early-stage tech-driven companies. Launched by Ankita Vashistha, the VC fund provides capital, connections, community, and continuous learning for women in Fintech, the Future of Work, Healthcare, Consumer & Web 3.0.
Women-owned start-ups are poised for more funding and growth in 2023. Here are some initiatives that aim to provide support and funding opportunities for women in India:
- Most of the colleges are offering mentorship programs to women to encourage startup ideas by female graduates
- Incubation and acceleration support is available through the Women Entrepreneurship Programme (WEP) by NITI Aayog.
- Special category benefits are available under the Pradhan Mantri Employment Generation (PMEG) program of the Ministry of Small and Medium Enterprises (MSME).
- Pradhan Mantri Mudra Yojana offers collateral-free loans.
- The Dena Shakti Scheme provides loans up to ₹20 lakhs for women entrepreneurs in agriculture, manufacturing, micro-credit, retail stores, or small enterprises. The scheme also provides a concession of 0.25% on the rate of interest.
- The Government of India also launched the Stand Up India Scheme to leverage the institutional credit structure to reach out to the underserved sector of people such as SCs, STs, and Women Entrepreneurs.
- Stree Shakti Yojana and Orient Mahila Vikas Yojana support women with majority ownership in the business. Women who want to enroll in catering businesses can attain loans via the Annapurna Yojana.
- Bharathiya Mahila Bank Business Loan: It offers loans of up to ₹20 crores to female entrepreneurs looking to start manufacturing businesses. If the loan amount sought is less than ₹1 crore, collateral is not required.
- Mudra Yojana Scheme: It is for women seeking to start or expand their small businesses. Women entrepreneurs can apply for loans ranging between Rs.50000 to Rs.10 lakhs. It is ideal for setting up beauty salons, starting a small shop, or running a home-based business. You don’t need any collateral or a guarantor to apply for this loan.
- Udyogini Scheme: Udyogini Scheme is specifically for those women who come from a family with an income below Rs.1.5 lakhs per annum. You can avail of a loan of up to Rs.3 lakhs at a very low-interest rate.
- Cent Kalyani Scheme: Under the scheme, loans up to ₹100 lakhs get sanctioned without collateral or processing fees. Except for self-help groups, retail trade, and educational and training institutions, every other type of business is eligible under this scheme.
- Mahila Udyam Nidhi Scheme: The Mahila Udyam Nidhi Scheme was launched by Punjab National Bank and is geared towards supporting Small Scale Industries (SSI). The maximum loan amount sanctioned under this scheme is Rs.10 lakhs, and the borrower gets 10 years to repay the loan. That includes a moratorium period of up to 5 years.
- ICICI Bank – Self Help Group-Bank Linkage Programme (SBLP): ICICI Bank has recently introduced Collateral-free business loans for SHG of 10-20 women. The maximum loan amount offered under this scheme is Rs. 10 lakhs with a repayment tenure of up to 3 years.
- Shakti Scheme from Bank of Baroda (BOB): The Shakti Scheme from Dena Bank supports women entrepreneurs active in a wide range of sectors including agriculture & allied activities, retail trade, microcredit, education, and housing, as well as enterprises in direct/indirect finance, manufacturing, and services sectors. The loan is offered with no processing fee and a rebate of 0.50% on loans up to Rs. 5 lakhs.
- KBL Mahila Udyog Loan from Karnataka Bank: KBL Mahila Udyog loan is offered to meet funding requirements for any source of income generation activity. This loan is offered exclusively to women and the maximum loan amount offered is Rs. 10 lakh, wherein the maximum repayment tenure is up to 120 months. It is open to women entrepreneurs with a minimum of 51% shareholding and a controlling stake.
- PNB Mahila Udyam: Business loan scheme of up to Rs. 10 lakhs for new & existing units with tenure of 3-5 years (Term Loan) and 3 years (Overdraft Facility) with a moratorium period of 3-6 months depending upon the type of activity and income generation. The Margin up to Rs. 2 lakh is Nil, above Rs. 2 lakh – Rs. 5 lakh is 20%, and above Rs. 5 lakhs to Rs. 10 lakh is 25%.
Women will dominate the workforce in India over the next few decades, helping to shape and improve the nation’s future. According to a report by IBEF, more than 30 million women-owned enterprises are predicted to create 150–170 million jobs by 2030. The economic outlook could improve dramatically as a result of this.
Let us begin 2023 on a bright note. We expect women entrepreneurs to accelerate their progress, be more audacious, and capable, and push the boundaries.
Sources:
https://www.drishtiias.com/daily-updates/daily-news-editorials/opportunities-to-women-entrepreneurs