What most women-led enterprises in India have in common?

Mumbai, 3rd Dec: Urvashi Devidayal, Sankalp Lead India , Intellecap and Prachi Maheshwari, Gender Lead, Intellecap as part of our yearlong content partnership with Forbes India contribute the third story in the Forbes series.

As a quick recap the first story titled ‘Instant loans: Alternate data to drive next financial inclusion wave’ in this Forbes Series was authored by Atreya Rayaprolu, Co-Founder and CEO Tribe3. The second story titled ‘Smart villages: Driving development through entrepreneurship’ was authored by Santosh Kumar Singh, Director, Intellecap and Ankit Gupta, Manager, Intellecap.

Titled ‘What most women-led enterprises in India have in common’ the article by Urvashi and Prachi bears its genesis to a recent economic survey which has highlighted significant increase in women-led enterprises in India.

The author’s opine that in India today it is easy to find successful micro-enterprises in the vicinity run by women, who not only manage their household but also financially support their families and educate their children. While these are often home-based businesses they do have the potential to scale but the entrepreneurs are unable to do so. The authors note that there has been no dearth of schemes, initiatives and programs implemented by the government and the private sector, to increase access to finance for women entrepreneurs, but most of these programs exclude majority of women-led enterprises.

Delving into the challenges, the authors go on to talk about how there is a high risk perception of women entrepreneurs and how there are several ways to address this perception and encourage women led enterprises to scale and grow.

Speaking about the finance sector, the authors cite a recent International Finance Corporation (IFC) report which pointed out that women employees constitute less than 20 percent of the workforce in banks. These numbers are even fewer for women fund managers in private equity firms. Thus the problem becomes cyclical where with low representation of women in financial sector, unconscious gender biases of our patriarchal society often influence the investment decisions, leading to high rejection rates for women-led businesses.

Speaking about catalyzing women investing in women, the authors urge the need to move beyond loans and borrowings, and to look at global trends and how this very aspect to go beyond conventional schemes and initiatives has encouraged the rise of “Women Investing in Women”, where venture funds set up by women are investing in women entrepreneurs. Today almost 70 percent of such gender lens investing funds in developed countries were either seeded by women investors and/or raised from women as limited partners. The authors name several such funds across that are not only investing in women entrepreneurs but are also running targeted interventions to build capacity of women as angel investors.

In conclusion, the authors bring the conversation back to India, and ask some pertinent questions around creating a conducive atmosphere and a positive narrative that creates real change on the ground and brings about a paradigm change in the way of our thinking to build an empowering and an inclusive society.

View full article