- Date : 05/01/2023
- Read: 3 mins
With a growing ecosystem building for women empowerment, India could be on its way to becoming a hub for women entrepreneurs. Find out how.
It is estimated that only around 5% of Indian women choose entrepreneurship as a career option. Various socio-cultural reasons have been keeping their participation low. Women have traditionally taken a backseat in the household. Those who seek employment generally go for public or private sector jobs, particularly jobs that help them balance household and motherhood. And yet, the number of women-led startups in India has been steadily increasing.
Women entrepreneurs in India
In 2014, around 8% of all startups in India, including small and medium businesses, were women-owned. This increased to 13% in 2019. Presently, 14% of Indian startups are owned by women. Compared to men-owned firms, they are employing 2.5 times more women and generate 35% more return on investment. It is observed that in the last five years, the number of businesses owned by women entrepreneurs in India grew by 20%. The growth rate in male-owned businesses during the same period was only 10%.
Based on recent developments, there is a growing consensus that India can become a hub for women entrepreneurs.
The Drivers of Rise in Women Entrepreneurship
There are a few specific developments in India that have made the ecosystem more conducive to women empowerment.
Funds - Access to capital has been a major obstacle among entrepreneurs, be they, men or women. However, arranging business finance is now easier with digital lending platforms. These platforms offer loans with simpler documentation and formalities, and faster processing and disbursal. Besides, access to traditional bank loans has been made easier with government schemes like Stand Up India. Businesses with over 51% shareholding and controlling stakes by women can apply for a bank loan from Rs 10 lakhs to Rs 1 crore under this scheme. Greenfield enterprises engaged in manufacturing, trading, agri-related operations and services can apply for the loan. Besides, various other state-level schemes finance and encourage women entrepreneurs.
Mentoring - Guidance and support can make a lot of difference to how a business propagates. Initiatives like the Women’s Entrepreneurship Platform by Niti Aayog act as a one-stop solution for all the necessities of women entrepreneurs. At the state level, platforms like the WE Hub in Telangana are acting as an incubator for female-led businesses. These types of platforms and forums guide women to build a business model around their initial idea, help startups register, and incubate and accelerate these businesses. Women entrepreneurs can seek various technical, financial and policy-related guidance and support from this type of platform.
Digitisation - The prominence of online business and digitisation has made it possible for women to run businesses more conveniently. The pandemic further hastened the acceptance of online businesses among consumers. E-stores and online marketplaces meant that mobility issues could no longer be a deterrent for women entrepreneurs.
With increasing access to funds, a holistic mentoring and incubation ecosystem, and a digitised marketplace, women in India can fulfil their high potential as entrepreneurs very soon.