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A Fair Shot For Women Entrepreneurs
A major shift in mindsets along with interventions from the government and industry are needed to build thriving conditions that facilitate and empower women entrepreneurs
Photo Credit : glassceiling.com
Gender inequality is not only a social and ethical issue but also a severe economic challenge. If women, who are half the world’s working-age population— are unable to achieve their full economic potential, the world will suffer.
There is no doubt in saying that women are essential to the economy. Empowering women to join the workforce and fostering women entrepreneurship has many positive outcomes, ranging from enhancing pay parity and productivity to alleviating poverty and expanding the country's economy. It is not only the 'right thing’ to do but it is also the 'smart thing’ to do for the development of any country.
When women are active contributors in the workforce, they invest in their families, their homes, and their communities, leading to measurable impact. According to a global analysis by McKinsey, a “best in region” scenario - where every country matches the rate of improvement of the fastest-improving nation in their region - could add as much as $12 trillion to annual global GDP by 2025. In a “full potential” scenario in which women play an identical role in labor markets to that of men, as much as $28 trillion, or 26 percent, could be added to global annual GDP by 2025.
However, even after decades of progress towards making women equal partners in the economy and society, the gap remains enormous. For instance, women entrepreneurs in India comprise only 14% of total entrepreneurs. They frequently encounter gender bias while raising capital to run and expand their business. While both private and public institutions provide an array of financial schemes, their focus on women entrepreneurs varies. The loan sanctioning process is not easy, as financial institutions are more cautious when extending credit to women-led businesses, because women-owned businesses are perceived as riskier than enterprises owned by men. Women often do not have collateral assets in their name. Family properties are usually pledged to support credit needs of businesses led by male members of the family.
Moreover, the social norms in India suggest that the primary responsibility for taking care of the house and family is primarily the responsibility of the women, which makes juggling between both home and business quite challenging. To maintain a balance, women often forgo promising opportunities to connect into networks that expand their business connections and lead to new customers and better market access.
It is important to level the playing field and support more women to start and scale enterprises. Benchmarks from high-performing countries and some Indian states provide a good yardstick for how India can accelerate overall female entrepreneurship.
Build a culture of women entrepreneurship
Of the 58.5 million entrepreneurs in India, nearly 14% are women, and Indian women-owned businesses provide employment for 13.45 million people. It is important for government and industry to come together to encourage women entrepreneurship and provide support to women with resources and tools to enhance their business acumen and accelerate their path to success.
More programs like Women Entrepreneurship Platform (WEP) by NITI Aayog, which offer holistic knowledge base to women entrepreneurs, provide them information about networking, and access to mentorship and financing all in one place, should be expanded and replicated.
Corporates must work towards addressing inequality and exclusion – the biggest barriers holding women back - by building inclusive workplaces, promoting equal pay, providing a better work-life balance for both genders, and catering to women’s needs at all stages of life. Corporates should also invest in and procure from businesses led by women.
Similarly, it is important for families to show support and encourage women to contribute to the economy. An immediate and helpful intervention is for husbands to take equal responsibility of the house and families.
Give them access to finance
Women must be empowered to leverage the power of technology to accelerate their businesses’ growth. Technology can bring more women businesses into the formal economy and facilitate their access to global markets. Although, technology won’t end the gender bias, thoughtfully designed technology and machine learning models can help reduce underwriting bias, connect more women entrepreneurs with the right investor, and expand their access to customers.
Digitization will enable women-led businesses to access to formal credit and other financial services that drive operational efficiencies. It lessens structural barriers that reduce women’s access to capacity development and finance. Along with addressing the financial gap, digital financial service providers can increase the speed and accessibility of loans by utilizing transactional and behavioral data that will provide women with tailored financial services at a lower cost.
Digitization will also enable women entrepreneurs to build connections and expand their networks efficiently, which are crucial to running a business. With the help of remote collaboration capabilities, it will enable them to build contractual relationships with third parties and integrate better with other female entrepreneurs.
Keep a focus on growth
Many women business owners struggle to grow because they encounter obstacles when it comes to scaling up. Hence, it is important to keep abreast with the changing market dynamics, improving basic business management skills including inventory management, accounting, budget management, customer loyalty, etc.
Corporates and government can be instrumental in supporting women entrepreneurs by providing expertise and mentorship to expand and accelerate the growth of businesses. By working together, corporates and governments can unlock the full economic potential of high-impact women entrepreneurs and grow the funnel to encourage more women to start enterprises.
Enhancing the overall volume and standard of entrepreneurship can create over 30 million women-owned enterprises, of which 40% can be more than self-employment. This can generate potentially transformational employment in India: 150–170 million jobs, which is more than 25% of the new jobs required for the entire working-age population, from now until 2030.
A major shift in mindsets along with interventions from the government and industry are needed to build thriving conditions that facilitate and empower women entrepreneurs, expand accessibility to financial services, and nurture a collaborative and inclusive entrepreneurial environment.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.