Encouraging Women Entrepreneurs Could be The Key to Spurring India’s Economy Onward
The Indian economy has grown gradually over the last decade. However, the number of startups has surged. Even though many of these startups have been founded by men, some of the most popular and path-breaking names in the payment ecosystem, travel, beauty, clothing and ecommerce verticals have women at their helm.
The entrepreneurial landscape in the country is currently very exciting. India has the third largest ecosystem for startups.
According to industry reports, there has been a nine-fold increase in the number of investors over the past five years and a seven-fold increase in funding.
India is expected to be home to more than 150 unicorns by 2025.
Clearly, there isn’t a better time than now to be an entrepreneur in India and a good time to ensure that many more women entrepreneurs are able to get the much-needed support. Women entrepreneurship not only contributes to women’s empowerment but also to economic growth.
According to research by the IMF, gender diversity is likely to boost productivity growth, as women bring new skills to the workplace.
A World Bank report says India can grow in double digits if more women participate in the product line of the economy. On the other hand, only seven of every 100 entrepreneurs in India are women.
The pandemic has also been tougher on women, which is why the female labour force participation rate in the country has fallen to 16% which is very low. One problem women entrepreneurs face is that they tend to be hesitant about borrowing as it is perceived to be too risky. They tend to manage with the resources at their disposal and sometimes even operate out of homes. Families often don’t support such decisions; or they don’t have collateral and other support to obtain loans to scale up.
Fortunately, there has been a strong recognition that women entrepreneurship is an important untapped source of economic growth. To the government’s credit, even its Startup India programme has focused on startup policies for women entrepreneurs.
The government has been providing support to women entrepreneurs through schemes such as Pradhan Mantri Mudra Yojana, Women Entrepreneurship Platform (by Niti Aayog), Mahila Udyam Nidhi Scheme (by SIDBI), among others.
Budget 2022 has proposed to set up a panel for venture capital (VC) and private equity firms. This will help to frame strategies and suggest appropriate measures to facilitate healthy growth of startups and will help promote women entrepreneurship. Today, there is a growing movement among investors and VCs to recognise and support women-led startups.
Non-banking financial companies (NBFCs) are also taking the initiative to promote loans to women borrowers. Some are offering collateral-free business loans, with an emphasis on women entrepreneurs, at competitive interest rates. The Bank Credit Facilitation Scheme headed by National Small Industries Corporation is targeted at meeting credit needs of MSMEs through tie-ups with banks.
I wouldn’t be averse to nudging for some earmarking of investments specifically for women entrepreneurs.
The broader objective is that it is more likely women entrepreneurs will hire other women, thereby increasing female labour participation. In turn, it will also help to close the gender income gap.
While pitching for funding, women entrepreneurs tend to have far more realistic projections. So, investors / VCs may get realistic assumptions and a better understanding of business, which are sometimes niche.
I think some of the areas that need attention is ease of doing business and increased accessibility to advisory platforms, which can guide women entrepreneurs, especially on valuations and financial structuring
We need more incubators to encourage more women entrepreneurs. Finally, we should never underestimate the power of good mentorship.
To all the women entrepreneurs including potential entrepreneurs, my advice will be: the world is looking at India very favourably. Today, India is a compelling growth story poised for rapid growth in consumption, urbanisation, digitisation along with rising income levels.
Women have proved time and again that gender apart, there are many success stories, and many are in the process of being scripted – so it’s going to be an exciting future. To be successful in life and work, it takes commitment. I believe your work must speak for itself, and that leads you to be successful.
Being honest, doing hard work and not expecting special favours as a woman can lead to long term success. Indian women are at an advantage compared to their Western counterparts, as they have family support systems in place.