Author: Ritu Singh, Senior Economist and Head of Investor Relations, UGRO Capital
Pune: The unprecedented rise of women-led Micro, Small, and Medium Enterprises (MSMEs) is bringing a revolutionary shift in India’s entrepreneurial landscape. Women-owned businesses are reshaping the MSME sector and making significant contributions to economic growth and social development.
India is witnessing a surge in women entrepreneurs, fueled by increased educational opportunities, changing societal norms, and targeted government initiatives. A recent study revealed that over 60 million MSMEs operate across India, with more than 20% owned and led by women.
To foster female entrepreneurship, the government has launched several initiatives, including:
Pradhan Mantri Mudra Yojana (PMMY)
Stand-Up India Scheme
Women Entrepreneurship Platform (WEP)
Skill Development and Coir Industry Support
Mahila Udyam Nidhi Scheme
These programs offer financial assistance, business mentorship, and training, helping women establish and expand their enterprises.
Impact and Economic Contributions
Women-led MSMEs have a 12% monthly revenue growth and a 19% increase in net income.
Female entrepreneurs' wages have risen by 12%, 4% higher than male business owners.
Women-owned businesses have generated 63% of new jobs in the manufacturing sector, compared to 58% by male-led enterprises.
Moreover, women entrepreneurs are more reliable borrowers, with loan default rates of just 2.6%, significantly lower than the 4.6% recorded by male-owned businesses. Studies show that women repay loans faster, making them ideal candidates for financial support and investment.
Despite their success, women entrepreneurs face challenges in securing financial support. While countries like the U.S. and Canada see women-owned businesses contributing over 40% to their economies, India still struggles due to funding limitations.
A 2022 BYST survey found that 85% of women entrepreneurs in major Indian cities faced difficulties in securing bank loans. The financial gap for women-led MSMEs is estimated at $158 billion, highlighting the urgent need for better funding access.
To bridge this gap, financial institutions must tailor funding solutions for women entrepreneurs, and government bodies must incentivize easier access to credit. By supporting women-led businesses, India can unlock their full potential, foster inclusive growth, and accelerate economic transformation.