Challenges for female entrepreneurs in India

Dr Rajiv Kumar *

Globally, men are more likely to start new ventures than women. Empirical evidence suggests that women have lower hubris and a higher level of humility, which negatively affects their risk-taking behaviour and limits their engagement in entrepreneurship. If only women were as immodest and overconfident as men!

Infact, our very own Indian icon, Kiran Mazumdar-Shaw, remarks on her journey as an entrepreneur,
'[] You have to keep challenging the status quo [].
I was doing something on my own, I was doing something quite path-breaking,
I couldn't look or turn to anybody at that stage.
I realized I was doing it alone,
I realized I was doing something very different and
I just managed to do things with a lot of common sense,
with a lot of determination and a lot of foolish courage, I might add.

Unfortunately, it is not just lower hubris that is preventing women in India from being successful entrepreneurs. India has between 13.5 and 15.7 million enterprises owned by women. Government intervention, improved financial access and access to education led to an increase in women-owned enterprises from 14% to 20% in the last decade.

However, there are several challenges that women entrepreneurs face that are not common for their male counterparts. According to a report by MasterCard, India's business environment is not favourable for female entrepreneurs. There are several social, technical and financial barriers that hinder the growth of women-owned businesses.

To begin with, some firms are registered as women-owned due to financial and administrative reasons but are actually managed and operated by men. Moreover, a larger share of women-owned firms is a single-person enterprise, generates lower revenues and is smaller in size than those owned by men.

Most women are still pursuing business activities on the side as they continue to do majority of the household chores. They are also often the primary caregivers taking care of the children and elderly. The nature of businesses that women are involved in are also different from those of men, so their need for credit and the corresponding credit cycles are different.

Women in rural areas also often need permission from a male member in their family before stepping out of the house and are often accompanied by a male relative for a trip to the neighbouring bank due to safety concerns or social norms.

Women's access to financial resources is also limited because of several reasons. More women save than borrow to start, operate or expand a farm or business in India and globally. The informal, social network as a source of funding is often less available to women and often limited to women from high-income families.

Borrowing from family members or friends to start a business is not an option for many in the agriculture sector or subsistence entrepreneurs in India. Moreover, women have lower bargaining power on use of household income and savings. This makes their access to independent, formal financial sources very important.

However, according to World Bank's Global Findex database, more Indian men reported borrowing from a financial institution or using a credit card than women. This gender gap exists because of several issues associated with access to financial markets and products.

Even though women have equal property rights, they don't usually inherit property from their family. Consequently, women do not have access to collaterals to borrow money from formal financial markets. Limited access to formal financial markets often has a negative impact on their credit ratings and in turn it affects their ability to secure lower interest rates.

It is essential to customize loans with smaller ticket sizes, lower interest rates and financing structures that can cater to the needs of businesses owned by women.

NITI Aayog's digital platform, Women Entrepreneurship Platform (WEP), is an initiative that strives to bridge the information asymmetry for female entrepreneurs. Users can register at the portal and get information about various government schemes and connect with service providers such as accountants for their business needs.

They have around 13,000 registered entrepreneurs. They launched the Women Transforming India (WTI) Awards in 2016 to recognize the entrepreneurial endeavours of women in India and applaud their perseverance, tenacity and hard work.

The winners of the Fourth Edition of these awards will be announced on March 8, 2020, from a pool of Top 30 candidates. Data from approximately 2,300 entrepreneurs, who registered this year, echoes the challenges mentioned above.

64% of these women-owned firms were privately owned or were sole-proprietorship; most of them started with less than INR 30 lakhs; and 84% had a turnover of less than INR 1 crore. 80% operated in the education and social innovation and impact sectors.

Entrepreneurs from Tier 2 and 3 cities mostly operated in education, manufacturing, handicrafts and healthcare sectors and agro-entrepreneurs were mostly from Tier 3 cities. All these entrepreneurs identified lack of capital, lack of awareness and access to market as the top 3 challenges to their business.

Socio-cultural challenges and gender bias were listed as the most prominent social challenges. They also emphasized on the lack of investors willing to fund smaller size loans for their business needs.

Digital financial tools are likely to help women overcome challenges associated with access to financial institutions and information asymmetry. Women can use mobile or internet to access their bank accounts or transfer and receive money directly into their accounts. They can save on time spent on travelling to a bank branch for financial transactions and reduce the cost of the travel.

This increases their time for productive activities and reduces the cost of financial transactions. These savings account for significant gains as women-run businesses often have lower sales and profitability because of the sector of operation and the smaller size.

Digital tools also address safety concerns of family members that do not like their wives or daughters to travel alone for business or to access banks. Moreover, digital records can also help improve inventory management and help make procurement decisions more efficient.

Digital financial products tailored to capture business activities like regular payments of a client's utility bills and inventory management could be used to build credit history for new entrepreneurs who do not have sufficient collaterals, guarantees or a credit history.

Waiver of minimum balance requirements on deposit accounts, provision of small to mid-ticket loans and micro-savings options are some other financial products that can be provided through digital applications.

Direct transfers to women's accounts can also increase the financial autonomy of women and improve their ability to save or invest in their business. Digital platforms like the NITI Aayog's WEP can be used to improve skills like book keeping; connect with accountants for tax incentives and compliance; learn more about government schemes; and engage in efficient investment management.

While technology has the potential to improve the efficiency of operations of a woman's business, their access to technology itself is limited. Restricted access to electricity and absence of a robust, ubiquitous digital network are common stymies to the digital financial revolution in India.

Moreover, fewer Indian women have access to a mobile handset or internet than men. Women are also less likely to use smart phones or experiment with new financial products and a new technology. It has also been observed that while women are aware of social media applications, they are not as informed about financial tools and applications that can help them expand their business.

Gender-gap in education outcomes has reduced significantly in the country, but a gender-gap in financial literacy can negatively affect business efficiency. These challenges limit women from using financial tools digitally and their productivity as entrepreneurs.

Improving access to financial tools using digital technology is effective for increasing female participation in entrepreneurship. However, this is only part of the solution. There are several other social and economic challenges that need reforms. The government, private sector and non-profit organizations have launched several schemes and initiatives to help women-owned businesses.

Mandatory procurement from 3% women-owned MSME firms or skill-training and certification programs catering women entrepreneurs are some examples.

A reliable care-economy with safe, affordable and accessible daycares for children and elderly; social protection schemes like health and business insurance plans; and equal participation of men and women in household chores are some social reforms that can help women entrepreneurs become a part of India's growth story in the coming decade.

Views expressed are personal.

* Dr Rajiv Kumarh wrote this article , which was published at The Sangai Express
The writer is Vice Chairman, NITI Aayog, and Pankhuri Dutt, Public Policy Consultant (Economic and Finance), NITI Aayog.
This article was webcasted on March 21, 2020.

* Comments posted by users in this discussion thread and other parts of this site are opinions of the individuals posting them (whose user ID is displayed alongside) and not the views of We strongly recommend that users exercise responsibility, sensitivity and caution over language while writing your opinions which will be seen and read by other users. Please read a complete Guideline on using comments on this website.

  • Bishnupur during Lockdown [Apr 5] : Gallery
  • Covid-19 Status 06 Apr : Govt of Manipur
  • Reality of Korean Pop or Hallyu Wave
  • Illegal detention of YFPHR members
  • Amidst Sorrows and Hopes :: Poem
  • Mentality matters to fight COVID-19
  • Plight of stranded north-east workers in city
  • Measures taken up to check COVID-19
  • Betel leaves traders should not be let free
  • Relief Camp @Chassad - Mar 17 : Gallery
  • Betel leaves seized @Imphal Apr 4 : Gallery
  • Covid-19 Status 05 Apr : Govt of Manipur
  • During the invasion of Covid-19
  • Surviving in the time of COVID-19
  • PM's 9 pm diya deciphered
  • Disguise :: Poem
  • Switch off lights call of PM
  • Cheiraoba Chak Katpa #2 : Gallery
  • Items distributed in Bengaluru : Gallery
  • Covid-19 : Impact in Manipur :: News Timeline
  • Helpline Number for Students/ people from NE
  • Impact of Coronavirus Pandemic
  • His Call to the Nation
  • Enchanted Riches Land :: Poem
  • Fresh lease of life in NERAMAC
  • Naga Peoples Front Communique - [Apr 4]
  • Yes we can fight COVID-19 invasion
  • Chassad village Arson- Mar 17 : Gallery
  • Status Update 03 April : Govt of Manipur
  • A Panic-Stricken Crowd :: Poem
  • Covid-19: what ails one, ails us all
  • PM's Statement on COVID-19 [Apr 3]
  • Manipur BJP Statement [Apr 3]
  • Appeals to Prevent Forest Fires
  • FIR asisu handokkadabani
  • Message from Nagaland Opposition [Apr 3]
  • From Nationwide lockdown to what else ?
  • The virus respect no religion
  • Mr. Khadang - Film Scenes #2 :: eRang
  • Status Update 02 April: Medical Directorate
  • Thotsang, Chao Sai, Makanmi: eMing
  • Muslim- one of most misinterpreted community
  • Stop Xenophobia against North East People
  • Essential Commodities Shops - Bishenpur
  • Beneath all that Darkness :: Poem
  • 17 in Assam, two in Manipur
  • Ode to the silent angels
  • Shopping - 30 March #2 : Gallery
  • Status Update 01 April: Medical Directorate
  • Drug users during COVID-19 pandemic
  • Reflections in the shadow of Covid-19
  • An absolute sacrifice
  • Report Clarification : Govt of Manipur [Apr 1]
  • Schools to remain closed beyond 31st March
  • Construct Quarantine centre at Koirangei
  • Pledges Rs 50 crore to PM CARES Fund
  • Fresh hotspot in Delhi's Nizamuddin
  • New findings on character of Coronavirus
  • Wars, Devastation & events in Kakching #2
  • COVID: Janata Curfew -Mar 22 #2 : Gallery
  • Support to stay home and pray
  • Racial prejudice against NE people
  • 'Release prisoners on bail/ parole'
  • Music Video 'Live Your Life' released
  • Donation to CM's Covid-19 Relief Fund
  • Farmer Producer Companies to collect
  • Heed the lockdown call
  • Health Advisory needs to be reviewed
  • Shopping - 30 March #1 : Gallery
  • Status Update 30 March: Medical Directorate
  • Stop Hate in the Time of Corona
  • April Calendar for Year 2020 : Tools
  • Manipuris stranded in State : Nodal Officer
  • Mask distributed at Kumbi
  • Nothing spreads like fear
  • Letter to Prime Minister on Racial Attack
  • Lockdown : Ensuring food for all
  • Covid-19: Manipur Strategy to Prevent & Win
  • Status Update 29 March: Medical Directorate
  • Covid-19 or Racism, which one to fight first ?
  • MHA to Chief Secys of States [Mar 29]
  • Home Delivery- Imphal Dists [Mar 29]
  • Shop List opened - Bishenpur [March 29]
  • Violating anti-defection law
  • Why PM want Leishemba to be RS MP #2
  • Manipur Govt Orders [28 March] : Gallery
  • Status Update 28 March: Medical Directorate
  • Medical material airlifted from Delhi to Imphal
  • Coronavirus Combat; not just Govt's fight
  • Lack of availability of Medicines, Water..
  • Research to plug gaps in COVID-19 testing
  • RIMS areas disinfected - [March 26] : Gallery
  • Status Update 27 March: Medical Directorate
  • Manipur Govt Orders/Directives : 27 March
  • FEGOCTA donate 1 Day Salary to CM's Fund
  • Cure for COVID
  • What a respect to the caregivers !
  • Charity Mission Committee on COVID-19
  • NH7 Weekender : Online music festival
  • Lockdown amid curfew
  • PDS rice to CMHT excluded Keishamthong?
  • Curfew in Imphal - [March 24] : Gallery
  • COVID-19 helpline numbers in Manipur
  • Screening at Mao [Mar 20] : Gallery
  • COVID 19 & Epidemic Diseases Act, 1897
  • Decoding Tax Jargon through March Ending
  • NPF urged Nagaland Govt on COVID-19
  • Food items to Child Care Institutes
  • Hand rub bottles manufactured & distributed
  • Studying the total shutdown in Manipur
  • Cheiraoba Chak Katpa #1 : Gallery
  • Social Distancing observed [Mar 25] : Gallery
  • An appeal to all on COVID19
  • What is love ? :: Poem
  • Career option in Geomagnetism
  • Kohima gets a brand new song
  • Communique on Covid-19 : Nagaland Oppn
  • CM Covid-19 Relief Fund created
  • 12 on board flight with patient quarantined
  • Quiet celebration of Cheiraoba
  • Quarantine started- Mao -Mar 24 : Gallery
  • Leikai Public curfew -Mar 24 : Gallery
  • Stop stigma of Covid 19 +Positive Friends
  • Media : Essential services during lockdown
  • Acts of Kindness, Unity among Communities
  • Racist attacks on people from North-east
  • A friend in need is a friend indeed
  • Enforce total lockdown in Nagaland :: NPCC
  • Ugly response to positive case of COVID-19
  • First Case in Manipur
  • Lamphel Nawa Kombirei at Cheiraoba
  • Woman returned from UK has Coronavirus
  • Screening at Mao - Mar 22 : Gallery
  • Why PM want Leishemba to be RS MP #1
  • Janata Curfew - 'Go corona' festival
  • Panacea for Economic Collapse: COVID-19
  • Total Lockdown till March 31st
  • Sajibu Cheiraoba - Meitei New Year Day
  • Giving racial twist to coronavirus
  • Need action to those mocking PM
  • COVID: Janata Curfew -Mar 22 #1 : Gallery
  • Manipur Govt Orders - Mar 22 : Gallery
  • Status Update 22 March: Medical Dir Lamphel
  • We will get by. We will survive.
  • Covid-19: Impact in Manipur :: Photos/News..
  • War against Corona
  • What ails Indian Railways
  • Appeal to Govt during COVID 19 crisis
  • Hats off to the men in white
  • COVID-19: Ima Keithel -March 21 : Gallery
  • Bandh on March 21 : Gallery
  • Social Justice & Democracy in Northeast
  • Sociology of Coronavirus
  • COCOMI extended help to victims of Chassad
  • The Omnipresent Fear :: Poem
  • MU Chemistry Dept makes hand sanitisers
  • COVID-19 : A blessing for Khwairamband
  • Wakching Thagi Sanarei #2 :: eRang
  • Who will rebuild Chahsat village ?
  • The untameable :: Poem
  • Importance of Fish & Fishery in Manipur
  • Challenges for female entrepreneur in India
  • The Killing Fields 2013-20 : News Timeline
  • How well prepared is Manipur?
  • More seriousness needed to fight COVID-19
  • Khongu NangGi Baasi :: Shumang Leela
  • Yaoshang Fancy Dress #1 : Gallery
  • Journalistic Challenges in Reporting Chassad
  • Paneer Our Daughter's Delight
  • Civil Site Engineer / Site Manager
  • Architectural Designer at R-Square
  • Research Officer - Financial at Amethyst
  • Chinky to Coronavirus: Racial profiling chain
  • Promises, prosperity, Rights & Responsibility
  • Wars, Devastation & events in Kakching #1
  • When Chassad Blazed Our Hearts Burnt
  • Nagas entering final phase of power struggle
  • Climate change & predator : Any link?
  • Restore Chassad village to normal condition
  • The other side of Covid-19
  • Is Manipur taking adequate steps?
  • Silencing the voice of dissent
  • Dzukou Valley, Senapati #3 : Gallery
  • Condemns the burning at Chassad Village
  • Conduct fact finding mission at Kamjong
  • Lost at the edge of uncertainty!
  • Global Youth Peace Conclave postponed
  • Entrance exams after 10 + 2
  • Workshop organized on Einstein's birthday
  • Titular King in the race for RS
  • Coronavirus, H1N1 & garbage in Imphal
  • Inner Line Permit (ILP) Demand : Timeline
  • Yaoshang Sports Meet #2 : Gallery
  • Restoring Chassad- the village with no house
  • Manipur Maharaj & House of Lords
  • COVID-19 : Hand sanitizers at Bangalore
  • Appeal to install Covid-19 test in Nagaland
  • Communal violence & over-lap ethnic aspiration
  • Understanding Ponzi scheme
  • Yaoshang Halankar #1 : Gallery
  • Yaoshang Sports Meet #1 : Gallery
  • Nano Technology in Bio Organic Fertilizer
  • Joydev Thongam: Story behind the muscles
  • COVID-19: Agent to end Economic Globalisation
  • Cannabis in HIV and AIDS
  • Is society gender-sensitive enough ?
  • Day light Thabal Chongba #1 : Gallery
  • Intl Women's Day @ Imphal : Gallery
  • International Rivers Day at Kangoi Area
  • Getting workplace ready for COVID-19
  • A Tale on Yaoshang :: Poem
  • India's improving journo-murder index
  • But Leishemba should also act politically
  • Yaoshang Marathon @ Singjamei : Gallery
  • Wangkhem Rezia : Success Stories NE
  • Guwahati Music Festival #2 : Gallery
  • A Beautiful Mind :: Poem
  • Of Purity and Arrival of Spring
  • Fr Biju Michael - Salesian South Asia
  • Yaoshang Cheng Khaiba : Gallery
  • Saroi Khangba @ Khwairamband : Gallery
  • Intl Women's Day @ Bangalore : Gallery
  • Women's health & nutirition - A glance
  • Yaoshang Rock @Sagolband :: Gallery
  • MOU - Guest House at Mandalay :: Gallery
  • #VOLUNTEER4HEALTH launched at Delhi
  • Yaoshang Mei Thaba :: Gallery
  • Festival of Holi- Brahma Kumaris concept
  • Yaoshang Mei Loukhatpa @ Kangla :: Gallery
  • Health Camp at Pune :: Gallery
  • International Women's Day at Bangalore
  • Universal access to sexual health services
  • Health Camp on Women's Day at Pune
  • More employment for our politicians
  • Gender Resource Centre in Agriculture
  • Entry points at Indo-Myanmar border sealed
  • Peace rallies urge PM for early Naga solution
  • Reversing masculinization of India's workforce
  • Torch Rally: Journalist Sports: Gallery
  • Politics of South China Sea Disputes : Book
  • 1st Barak Festival @Senapati: Gallery
  • Featured Front Page Photo 2020 #1: Gallery
  • Phisakol - Film Scenes #2 :: eRang
  • yeniHTa :: Seireng
  • Yaoshang Thabal Peisa donation: Gallery
  • World Meetei Convention @Cachar : Gallery
  • 13th Mega Marathon Manipur #3 : Gallery
  • Naga Peace Process :: News Timeline
  • Eyek Tamba :: Learn Manipuri script
  • Wakching Thana Lakpada #2 :: eRang
  • Students @ Class XII Exam #2 : Gallery
  • Bangladeshki Sana Tampha #1 :: eRang
  • Manipur Legislative Assembly Building : Gallery
  • Eepan Thaba -birth ceremony : Gallery
  • Coronavirus prevention @ Moreh : Gallery