The rate at which women are taking up entrepreneurial roles is changing rapidly in India and how!
Seventy-seven years of independence have meant that this development is not limited to first-class cities that have excellent business infrastructure, adequate amenities and more opportunities.
Achieving Amrit Kaal Goals
Women in Areas 2, 3 and 4 are also making strides across various business platforms, raising the bar so high in a society where they have historically been afforded fewer opportunities.
But why have women had fewer opportunities all these years? In addition to the lack of adequate support from family and friends, the lack of financial resources and technical support hampered their development.
It seems that the government has the ambition to place India in the top three largest economies in the world by the end of Amrit Kaal’s term, i.e. within the next 25 years. To achieve the same goal, it is necessary to provide women entrepreneurs with this booster shot.
In comparison, according to the Sixth Economic Census (2013), women constitute about 14% of the total entrepreneurs in India. Additionally, a study by McKinsey Global Institute estimated that progress on gender equality in India could add $770 billion to India’s GDP by 2025. Much of these potential gains could come from promoting women’s entrepreneurship.
What are the government and lenders planning?
So how can we leverage the financial ecosystem in the country to bring in more women entrepreneurs? Banks and non-bank lenders play an important role, providing them with access to capital, financial services and support. Here are some of the ways:
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 an unsecured approach is key to supporting women’s entrepreneurship.
Financial education and training: Many women may lack the necessary financial knowledge and business management skills, and some inland financial institutions are ensuring that women develop the skills they need to manage their finances, create business plans and make informed financial decisions.
Mentoring and networking: Some institutions also provide aspiring entrepreneurs with connections to successful business leaders and access to support networks.
Government and non-government partnerships: Collaboration with government agencies and non-governmental organizations (NGOs) also increases the impact of banks and lenders’ efforts to support women entrepreneurs. Moreover, the government also has numerous programs to support such women entrepreneurs.
Some of them include 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.
These programs play a key role in providing financial support and opportunities to 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 remote areas
Start-up NBFCs and other lenders, which are mostly present in remote locations where big bankers do not have much reach, also provide these entrepreneurs with easier access to loans, like their counterparts in tier-1 and -2 cities.
They fill a gap where large financial institutions either have not reached or have 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 from remote areas.
With technology available, using data analytics and machine learning algorithms to make better lending decisions is no longer rocket science.
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