In recent years, there has been a surge in the number of women entrepreneurs in India. According to a report by NASSCOM, the percentage of women-led startups in India has increased from 8 per cent in 2014 to 13 per cent in 2019. This increase is attributable to several factors, including the rise of digital media and e-commerce, the proliferation of mobile phones and other technology, and the changing social norms.
The high potential of women entrepreneurship in India is corroborated by a recent study by the Global Entrepreneurship Monitor, which shows that Indian women are twice as likely as men to start their businesses and are more likely than men to see entrepreneurship as a good career choice. So why aren’t more Indian women becoming entrepreneurs?
The answer may lie in analysing some of the challenges women entrepreneurs face in India. Only 3 per cent of Indian women have access to formal financial institutions, such as banks or microfinance institutions. This lack of access to capital is a significant barrier to entrepreneurship for women in India. Then there are socio-cultural issues that often prove to be stumbling blocks like joint families, running a household and business simultaneously, lack of family support, a patriarchal society and mobility constraints. Also, historically, the lack of successful role models has been a deterrent.
Having said this, a steadily growing tribe of woman entrepreneurs in India provides a great deal of confidence for a positive direction that the entrepreneurial landscape for women is taking, cutting across woman-friendly enterprises like cottage industries to new-age startups. As per recent figures, women comprise 14 per cent of the total entrepreneurs in India, which works out to 8 million. Also, 10 per cent of all formal enterprises are owned by women. Although the figures are small, notably, they represent a steady rise in women entrepreneurs, which is a welcome trend.
According to a recent survey, the number of women-owned businesses in India has increased by 20 per cent over the past five years. This is a significantly higher rate of growth than that of men-owned businesses, which have only grown by 10 per cent over the same period. The survey also found that women entrepreneurs are more likely to be educated and to have prior work experience than their male counterparts. There are three primary reasons for this steady rise of women entrepreneurship in India that gives us confidence that within the next five years, India will become a hub for women entrepreneurs.
Rise in digital lending
Access to capital has been the biggest bane of women entrepreneurs in India. Traditional lenders are averse to lending to women and demanding collateral as a guarantor along with other conditions. However, the increase in the number of digital lending platforms has made availing business loans much more straightforward for women with a minimum wait time.
This is another major trend already on the rise, and the pandemic only served to accelerate it. Now women can sell products right from the comfort of their homes anywhere across the country and globally. All they need to do is to become digital and e-commerce friendly or sign up for online marketplaces.
The annual growth in the number of social media users in India is 4.2 per cent, with more than 19 million new users added in 2021. This provides a massive captive online business audience, especially for women entrepreneurs with mobility issues. Looking back at the evolution of woman entrepreneurship in India over the years and the positive trends, notable opportunities exemplify the vast potential of women entrepreneurship in India. Firstly, we can increasingly see a level-playing field for female entrepreneurs, although there is much more to be done. Secondly, there is lots of scope to inspire and enable the ‘latent’ but ambitious women solopreneurs and small business owners and expand the funnel. Thirdly, there is a strong domain-specific platform to build, strengthen and scale productive rural agripreneurs.
What is needed today is a coordinated effort across stakeholder groups that will provide an enabling and comprehensive policy framework, equal access to finance, expansion of mentorship and networking channels, tailored knowledge and capability building, and cultural openness. The good news is that there are several initiatives to help female entrepreneurs in India, and Niti Aayog has taken the lead with initiatives like the Women’s Entrepreneurship Platform (WEP), a unified portal and a one-stop shop for all things related to women’s entrepreneurship in India. The next phase of WEP was launched in 2021 in partnership with Cisco and Flipkart to enhance the community experience. Hopefully, in the coming years, India will see a major shift towards women dominating its entrepreneurial horizon.
(The author is the executive vice president of global marketing at Wadhwani Foundation)