Why India has a poor share of women entrepreneurs; experts share their views on the challenges

MSME promoters face many difficulties as they start up. New businesses are not trusted by investors because their operating model is not proven. They also don’t benefit from the economies of scale because they are fledgling businesses. However, if it is a women-led business, they also have the additional burden of being stereotyped.

According to the data published in the MSME Ministry’s FY21 annual report, only 20 per cent of the MSMEs in the country are owned by women. Research has shown that investors don’t view women CEOs favorably as several biases seep in. The world a woman entrepreneur faces is very different from what a man faces. The subconscious biases and stereotyping of the funding community, largely dominated by men, prevents funds from being allocated to women-run businesses. According to the International Finance Corporation (IFC), women MSMEs face the credit gap of $158 billion with 90 per cent relying on informal sources of financing.

“The biggest thing in the process of ecosystem creation is capital. Silicon Valley happened because an inundated amount of capital flowed in. The Indian startup ecosystem grew because capital came in. If we want women to be entrepreneurs, we have to make capital available for them,” said Sairee Chahal, Founder CEO of women-led community Sheroes. 

The support system needs to evolve to help women entrepreneurs with market linkages and mentorship. Post-Covid growth of MSMEs and empowerment in its true sense can only be obtained by identifying the true potential of women entrepreneurs and breaking the patriarchal stereotype.

Source : www.financialexpress.com