[Kurukshetra April Summary] Women Entrepreneurs – Explained, pointwise

Introduction

Empowerment of Women is essential for sustainable development and economic growth of the country.  Women Entrepreneurs have emerged as an important means to empower womenfolk to make decisions regarding their domestic, social, political and economic life. To increase women’s participation, the Government has come up with various schemes and initiatives. Capacity building programs, easy access to finance and mentorship programs have been at the core of government initiatives. However, the need to scale these initiatives is immense considering the targets of economic development; and more importantly, for creating a conducive ecosystem for women entrepreneurship.

About the status of Women Entrepreneurs in India

The Sixth Economic Census is the most cited data in the literature on Women Entrepreneurship in India. It reveals that out of the 58.5 million businesses, only 8.05 million were owned by women. Thus, of the total entrepreneurs in India, only 13.7% are women.

According to the Female Entrepreneurship Index, out of 77 countries covered, India ranks 70. And as per the August 2019 report of the International Finance Corporation, India ranks third among countries reporting gender gaps in business.

As per the data available with Start-up India, the number of women entrepreneurs in the start-up ecosystem has increased to 14%, up from 10% and 11% in the last two years.

Last year, India added more than 40 unicorns to the list, and many of them are led by women.

Why does India need Women Entrepreneurs?

Basic building block: Women Entrepreneurship is central to any country’s inclusive and sustainable economic development. They are recognised as the new engines of growth. Women’s financial independence leads to their partaking in decisions right from their personal lives to their homes and society. Therefore, women’s economic freedom is one of the basic building blocks for aspirational society.

Bridge the disparity: According to the World Economic Forum report in 2019, for every dollar, a man gets paid, a woman on average is paid only 54 cents. The old perceptions of family responsibility on women pose an overwhelming challenge. According to the World Bank’s Women, Business and the Law 2022 report, “nearly 2.4 billion women of working age worldwide still are not afforded equal economic opportunities. The most persistent gaps remain in the areas of Pay and Parenthood, demonstrating that many economies have yet to remove restrictions or introduce the good-practice legal rights and benefits identified.”

To reach the country’s economic ambitions: It is predicted that Women-owned enterprises can generate over 50-60 million jobs by 2030. As the country progresses economically and targets a US$ 5 trillion economy by 2024-25, the need to push Women Entrepreneurs in the country and bridging the rural-urban divide through these enterprises becomes necessary.

What steps have been taken by Government to support Women Entrepreneurs?

In India, gender equality is enshrined in the Constitution and grants equality and empowers the State to adopt measures in favour of women. The Government policies have had the empowerment of women at the core since its fifth five-year plan 1974-79, considering the role women entrepreneurs can play in the development of the economy of the country. Women Entrepreneurship in India is receiving a three-tier boost today. These are,

Self Help Groups

In this, rural women are engaged in small-scale entrepreneurship programmes created with the intention that the joint efforts can be much more successful in overcoming various obstacles faced by the individuals. The members typically use savings, credit, or social involvement to support their entrepreneurial ventures. So far, micro-enterprise has proven to be the best tool for rural women.

Women-Led Enterprises

The Government of India has initiated various flagship programmes to facilitate women entrepreneurs, such as

Stand-up India: According to the available data, 81% of beneficiaries of this scheme are women entrepreneurs.

Mahila e-Haat: It is an online marketing platform to support women entrepreneurs. The platform offers an opportunity for women entrepreneurs to leverage technology for showcasing products manufactured by them.

Pradhan Mantri MUDRA Yojana

Women-Led Start-ups

The Government, policymakers, investors, corporates, and other civil society organisations have developed various ways to support women-led start-ups. For instance,

Women Entrepreneurship Platform (WEP) of NITI Aayog.

Mission Youth: It is a pioneering initiative of the Government of Jammu and Kashmir. Its aim is to provide all-around facilitation for the youth under various schemes. Under this initiative, “Tejaswani” has been launched explicitly for women.

WE Hub: It is an initiative of the Telangana Government. It is India’s first State-led Incubator to promote and foster women’s entrepreneurship. They facilitate the access to technical, financial, governmental, and policy support required to start up, scale-up, sustain and accelerate the women-led start-ups.

Women Start-up Programme: Indian Institute of Management Bangalore’s Start-up and Innovation Hub runs this programme. The programme aims to support ambitious and innovative women entrepreneurs by transforming their idea into business ventures and enhancing their entrepreneurial and managerial skills.

Capacity-building programmes: In fields such as marketing, operations management, quality controls, and financial management, etc.

What are the challenges in promoting Women Entrepreneurs?

Societal pressures: Entrepreneurship comes with its own set of challenges for both genders. However, the challenges for women are more significant. They are confronted with societal pressures in most regions in India.

Create rural-urban divide: Women Entrepreneurs are generally concentrated in the urban areas. This significantly impacts the rural population where the patriarchal affects are more stark.

Limited access to finance: This is one of the main challenges faced by Women Entrepreneurs. The lack of access to formal financing institutions, coupled with a lack of collateral for loans, often keeps women away from entrepreneurship opportunities.

Lack of technological exposure: This creates barriers to the success of women as entrepreneurs in rural areas specifically. UNIDO-led study on barriers to women’s entrepreneurship found that women were influenced more by traditional and internal factors than by legal or regulatory obstacles when starting their business.

Disparity in science, technology, engineering, and math (STEM) sector: Women make up only 28% of the STEM workforce, and men vastly outnumber women majoring in most STEM fields in college. This creates a disparity in STEM sectors, as these sectors will throw up more jobs than expected in the future.

What should be done to promote Women Entrepreneurs?

Improve the quantity and quality of the start-ups and enterprises established by the women. This can be done by increasing their access to capital. Support in funding would make it easier for women to scale up their endeavours.

Exclusive support: The government should facilitate support during pregnancy and other benefits of childcare. This can create a supportive work environment for them to choose entrepreneurship as a career choice.

Focus on gender-neutrality: A report published by McKinsey Global Institute states that US$ 12 trillion could be added to global GDP by 2025 by advancing women’s equality.

The report identifies six types of intervention to bridge the gender gap: (1) Financial incentives and support; (2) Technology and infrastructure; (3) Creating economic opportunity; (4) Capability building; (5) Advocacy and shaping attitudes; and (6) Laws, policies, and regulations.

There is a need for emphasised and positive policies in favour of women for building strong economics of the country, through various initiatives and scaling up of the initiatives that already exist in the country.