These enterprises face numerous challenges, including inadequate access to capital, technology and information, and infrastructure gaps, says IMF study
BS Reporter |
Last Updated at March 8, 2022 20:39 IST
Women-owned very small businesses (WVSEs) in India, with an estimated credit demand worth Rs 83,600 crore ($11.4 billion), need the strong support of financial institutions (FIs), as per the latest report from the International Finance Corporation (IFC), ‘Opportunities and Challenges of Women-Owned Very Small Enterprises in India’, enabled by Intellecap. This support will facilitate their growth and drive socio-economic inclusion by eliminating existing challenges.
Launched on the occasion of International Women’s Day, the report says WVSEs face numerous challenges, including inadequate access to capital, technology and information, and infrastructure gaps. There are about 15 million women-owned MSMEs in India, and contrary to popular perception, over 70 per cent of them are manufacturing enterprises, many of them home-based.
In addition to challenges mentioned, the segment of women entrepreneurs who often overcome biases from within the family and the business community, witness fractional treatment when it comes to lending. The report says FIs have traditionally catered to men-owned enterprises. The approach then limits the understanding of the operating contexts of women-owned businesses and their socio-cultural constraints. Given that most women entrepreneurs are self-financed, the lockdowns imposed during the COVID-19 pandemic have impacted their business and reduced their income.
“The Covid-19 pandemic exacerbated existing inequalities faced by India’s women entrepreneurs. This report explores how to unlock a $11.4 billion financing gap for WVSEs and charts a roadmap for financial institutions to better serve this segment in a post-Covid world,” said Wendy Werner, India Country Head at IFC. “IFC and its partners remain committed to creating an enabling entrepreneurial ecosystem so women-owned businesses can reach their full potential and contribute to India’s economic growth story,” she added.
This report identifies sectors that WVSEs operate in and highlights the characteristics of these enterprises. The report suggests ways for FIs to design new products and new processes to address the needs of WVSEs.
Amar Gokhale, Associate Vice President, Livelihoods & Gender at Intellecap said, “The underlying objective of this report, especially on International Women’s Day, is to showcase that this segment of WVSEs can be not just a potential business opportunity for FIs, but that serving it can also create a positive impact on the social and economic status of women entrepreneurs.”
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.