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How micro-finance is building a smoother path to entrepreneurship for Indian women

Vivek Tiwari
24th Jul 2018
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Over the past few decades, women have achieved tremendous success, making their mark across various walks of life and serving in the highest public offices. They are breaking the glass ceiling across different fields to avail the same opportunities as men, while also challenging stereotypes and misperceptions about their capabilities. No wonder then that when we talk about the paradigm shifts taking place in India’s entrepreneurial landscape, some of the most remarkable developments have been in the area of women entrepreneurship – accompanied with their fair share of challenges and struggles of course.

In India, today, more and more women from the grassroots level onwards are beginning to gain financial independence, earning a livelihood to support their family and themselves, over and above managing their respective households.

Entrepreneurship is a strong weapon that can empower women financially and also give them the ability to impact the lives of people within their communities, especially other women. Female-led entrepreneurial enterprises play the role of employment creators for a large number of women, especially in rural and semi-rural regions, thus gradually tipping the scales towards a more equal society. Women as producers and job creators contribute not only towards their household income but also to the overall economy. Hence, the greater this contribution is, the faster the country’s economic growth will be.

The steady growth in the literacy rate among India’s female population is also playing an important role in promoting women entrepreneurship. Literacy is empowering and motivating more women to acquire knowledge and gain expertise in order to take the best decisions regarding their business. But more importantly, they are also using their own knowledge to help empower other women around them by providing them with basic financial literacy, vocational training, jobs, etc. It is only right, then, that their contribution is recognised and encouraged further for the benefit of society in general.

Microfinance as an enabling tool for women entrepreneurs

Be it in metros, Tier-II and Tier-III cities, or in the rural regions of India, women are proving their entrepreneurial acumen by running successful businesses, be it retailing concerns, salons, or manufacturing food products, handicrafts, etc. What sets them apart from their male counterparts is their ability to improvise their business or revenue models and use the resources available to them to their maximum potential. One example of this is how with access to the internet and smartphones, women entrepreneurs are extensively leveraging social media as a marketing tool and promoting their businesses and products to a wider audience, instead of relying on traditional methods.

Women, with their knowledge, expertise, and creativity, are as capable of building successful businesses as any male entrepreneur. However, accessing capital – a major requisite to starting up any business venture – remains a daunting task for female entrepreneurs, particularly those residing in rural and semi-urban areas. The barriers to availing credit from formal lending channels are significant, thus limiting their growth potential. In such a scenario, microfinance helps fulfil these women entrepreneurs’ demand for affordable credit with a flexible set of terms and conditions.

The microfinance sector has contributed significantly towards making Indian women more visible in the entrepreneurial landscape, aiding their ability to become producers and job creators. According to the Bharat Microfinance Report 2017, women clients constitute 96 percent of the total client base of microfinance institutions in India. More importantly, access to finance enables women entrepreneurs to explore new avenues of revenue generation and growth. At the same time, the efforts and initiatives by government bodies and NGOs also contribute significantly to smoothening the entrepreneurial path for Indian women.

All of this plays an integral role in encouraging more women to look towards entrepreneurship and self-employment as a means of earning a livelihood and set an example for other women in the society to follow.

The road ahead

Women are increasingly proving their worth in a male-dominated realm like entrepreneurship, helming new enterprises, undertaking risks and innovating, and being effective leaders. Yet there is a lot that needs to be done to make the entrepreneurial environment more conducive for women. An essential requirement to promote women entrepreneurship is the creation of a strong support system at work as well as at home. Similarly, a networking and knowledge-sharing ecosystem of female entrepreneurs can help in developing and nurturing entrepreneurial skills in women who want to become self-reliant and create their own means of employment.

Simultaneously, support from the government and financial institutions in the form of more inclusive policies can help in eliminating the gender-based roadblocks, thus creating a smoother path for women to start their entrepreneurial journeys.

Vivek Tiwari is the Managing Director and CEO at Satya MicroCapital Limited, one of India’s leading microfinance institutions.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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