Women run fewer than 13% of India's MSMEs; inaccessibility of credit, govt schemes and now COVID are key hurdles

The biggest challenge faced by women entrepreneurs in India is gender bias in access to finance as studies show that their loan applications are more likely to be delayed or rejected as compared to men Editor’s Note: In this two-part series, Indiaspend explores the factors that inhibit women’s participation in businesses. Globally, India ranks third among countries reporting gender gaps in business — only 33 percent of the early-stage entrepreneurs in India are women, as per ‘Financial Inclusion for Woman-Owned Micro, Small & Medium Enterprises in India’, an August 2019 report of the International Finance Corporation. In India, the female TEA rate in comparison to male TEA rate fell from 79.6 percent to 62.1 percent between 2018 and 2019, as per Women Entrepreneurs as Powerhouse of Recovery, a 2020 IWWAGE report. When asked why they opted out of seeking formal credit for their businesses, about 36 percent of women entrepreneurs said they preferred to use personal resources, and 25 percent said they had “limited access to collateral”, as per a survey conducted for the 2019 IFC report. “And for Indian women-owned enterprises, for whom the credit gap was estimated to be $20.52 billion, the situation is likely to worsen due to women’s historically low access to land and other collateral.” Government schemes ’not visible, too much red tape’ The Prime Minister Employment Generation Programme is a flagship programme started in 2008-09 that extends financial assistance to micro enterprises.