India stands at the crossroads of an entrepreneurial evolution, yet a major gender funding gap persists. In 2021, only 0.3% of the Indian venture capital funding found its way to women-led startups, underscoring the challenges faced by women entrepreneurs in accessing financial support.
The Statistics
Women-led businesses encounter an unmet credit gap exceeding $11.4 billion, with female entrepreneurs receiving only 5.2% of the credit granted by Indian public sector banks, according to the International Finance Corporation (IFC). This gap highlights the systemic barriers that hinder the growth of women-led enterprises.
Recognizing the urgent need for change, various support initiatives are emerging to empower women entrepreneurs in navigating the complex landscape of financing. One such initiative is Smile Foundation’s Swabhiman programme focused on women empowerment through entrepreneurship development and health/hygiene-focused projects.
Challenges Faced by Women Entrepreneurs
While India ranks 57 out of 65 on the MasterCard Index of Women Entrepreneurs, only one in five businesses in the country is led by women. Unequal access to capital stands out as a key barrier. It is still extremely difficult to project women as investment-ready remains a challenge.
The many disheartening experiences of women highlight the biases prevalent in the investment landscape. Many start-ups with women helming the affairs at the top face differential treatment during pitching meetings. Investors sometimes neglected to ask her questions or shifted discussions to unrelated topics.
Investors often consider factors such as the age and marital status of a woman entrepreneur, introducing unwarranted biases into decision-making processes. Questions about marriage and family are rarely directed at male entrepreneurs, highlighting the gender-specific challenges women face.
Difference in Funding and Other Issues
Efforts to address the funding imbalance are underway, with an increased interest of investors for women-led businesses. Studies indicate that startups founded by women generate more revenue and create more jobs, emphasizing the untapped potential of women entrepreneurs.
Beyond the funding challenges, women entrepreneurs in India grapple with unsupportive family structures. A Bain & Company and Google survey reveals that 43% of women face a lack of support from family and spouses for their businesses. This initial hurdle often dissuades women from pursuing entrepreneurial ventures.
Programs like Swabhiman aim to provide a supportive community for women entrepreneurs, countering the male-dominated business environment. This is necessary to bridge a lack of access to professional networks contributes to information gaps about funding sources and market insights.
Training programmes that focus on refining pitch skills and instilling confidence are crucial. These trainings encourage women to speak about their businesses, emphasizing the importance of owning one’s narrative.
The journey of women entrepreneurs in India reflects both triumphs and challenges. While strides have been made, concerted efforts are needed to dismantle gender biases, increase access to funding, and foster a more inclusive entrepreneurial ecosystem. The stories of resilience and success emerging from initiatives like Swabhiman serve as guiding lights, inspiring a future where women entrepreneurs in India are finally on an equal footing.
