- Date : 08/11/2022
- Read: 3 mins
Incorporating Smart Finance Features into Female Entrepreneurship
To achieve the economic growth that India aims for, the development of a conducive ecosystem for female entrepreneurship is extremely important. From the millions self-employed through skills and businesses, to the Nykaas and the Biocons at the top of the heap, women's businesses are crucial to the country’s economy. An International Monetary Fund working paper noted that women entrepreneurs contribute 17% of the nation’s GDP. The paper observed that this could go up by a further 6.8% if the government ensures labour market reforms and brings the sources of finance closer to the women entrepreneurs.
Smart finance in Women Owned Businesses
There are self-help group bank linkage programmes, Mudra loans, Mahila Udyam Nidhi Yojana and many other business loan schemes available for women entrepreneurs. However, for many women starting a business, the need for finance is often intertwined with various other needs. This is where the concept of smart finance becomes relevant.
Smart finance gives access to finance a more holistic and well-rounded treatment. If women and men engaged in businesses avail of smart finance, they can expect to receive not just finance but also assistance in attaining business know-how, business mentorship and training opportunities, and access to business and investment networks.
There are two major finance-related risks that women entrepreneurship faces. Firstly, they may not have the access to finance and secondly, failing to utilize finance effectively. Smart finance addresses this through broader financial and operational assistance.
- From knowledge to expertise – Anyone starting a business would try to gain knowledge of the subject matter through initial research. If she were to gain access to relevant training and education at this juncture, her expertise on the subject would improve. This will help her to carry out the day-to-day business operations more effectively.
- Mentorship – The advantage of having a mentor is that you get someone who has been there before and can guide you from experience. Apart from smart utilization of funds, a mentor will advise the entrepreneur on business development and marketing, compliance and legal matters, and other operational insights.
- Arranging funding opportunities – Apart from the initial loan, a smart finance programme would include the preparation of business pitches to attract venture capitalists and angel investors. Proper application of the funds is another aspect of smart finance. Strategic decisions on business expansion, the launch of a new venture or exploration of a new market and the use of money therein are professionally assessed.
- Network building – Networking is an important part of the business. Women and men engaged in businesses must build a network that connects them with contacts that matter in business. This could be a prospective vendor or customer, or an investor who can fuel your business expansion plans.
Smart finance is a concept created by Dr K L Tennin and can be replicated in the local context through the right expertise. Women entrepreneurs should seek the professional guidance of a financial or business consultant for smart finance solutions. This will not only ensure the optimal utilization of their funds but also the long-term sustainability of the business.