Women-owned businesses account for approximately 20.5% of India’s 63 million MSMEs, the report adds. Over 22 million women-led businesses are registered on the Udyam Registration Portal itself, underscoring their huge potential as employment generators, it states.
Despite these numbers, however, women entrepreneurs face several challenges relating to limited access to finance, lack of formal training and societal biases to name a few. The geographical distribution of women-owned MSMEs reveals interesting trends, with West Bengal leading at 23.42%, followed by Tamil Nadu and Telangana. Additionally, rural areas have a slightly higher share of women-owned enterprises (22.24%) compared to urban areas (18.42%).
The report reveals that more than 95% of all MSMEs are in the micro sector. “Most women-owned enterprises in India are single-person micro-enterprises. Only about 17% of women-owned enterprises have employed workers, of which 95% operate with less than six workers. As the size of the enterprise increases, the proportion of women-led enterprises decreases,” it says.
Delving into the report findings, Ritu Prakash Singh, Senior Economist & Head – MSME Research at UGRO Capital says that only 19% of the 432 million working-age women in the country are engaged in formal, paid work. “Challenges persist, as reflected in India’s Total Early-stage Entrepreneurial Activity (TEA) rate for women, which remains low at 2.6%. Addressing these barriers are crucial to unleashing the full potential of women MSMEs in the economy,” she states.
Access to finance, in fact, remains the biggest challenge, with a financing gap estimated at $158 billion. A significant portion of credit for women entrepreneurs, the report adds, is often sourced through informal means like moneylenders. Initiatives such as the Mudra Yojana, Stree Shakti Package, and Stand-up India by the government aim to provide financial assistance, training and mentorship to women, enabling them to scale their businesses and contribute to India’s economic growth.But there need to be more concerted efforts to bridge the gap for women entrepreneurs. Focused support and policy interventions are crucial to fully realise women’s potential in contributing to the economy. “Developing a more inclusive entrepreneurial landscape will require addressing these challenges and providing the necessary resources and support for women entrepreneurs to thrive. This requires an understanding of the barriers and challenges faced by women,” the report states. Drawing a parallel with countries like the US and Canada, the report states that these countries have an approximate 40% share of women-owned enterprises, while other countries like Indonesia, Russia and Vietnam boast of more than 30%. “Overall, such efforts to allow women entrepreneurs to start and scale by 2030 may add around 50 million to 60 million to the direct employment of people and create indirect jobs for 100 million to 110 million people. This will position India in a comparable fashion to other rising and advanced countries, with over 40% of all businesses owned by women,” it emphasises.
Singh adds that investing in women-led MSMEs translates to fostering community development and driving economic progress. “Women entrepreneurs are more likely to reinvest their earnings into their families and communities, leading to better healthcare, education, and overall social development. As we look towards the future, it is crucial to address the financial and training needs of women-led MSMEs to create a more inclusive and equitable entrepreneurial ecosystem in India,” she says.
