Challenges facing women entrepreneurs in India

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Saurabh Gupta | 14 Sep, 2015
Although the issues and challenges of an woman-run small and medium enterprise (SME) are not much different from issues of Indian SMEs, but when we talk about gender equality our government must introduces some specific measures for women entrepreneurs to encourage them so that the true potential of women entrepreneurs get tapped.

Funding, knowledge, marketing and branding are the major issues before women entrepreneurs, President of FICCI Ladies Organization (FLO), Archana Garodia Gupta recently said at a event in New Delhi. She said women entrepreneurs have great potential but unfortunately it is initialized.

In the initial business stages, most women are forced to rely on personal funding, including for meeting working capital requirements. A report released by International Finance Corporation in 2014 said there was a finance gap of Rs 6.37 lakh crore (Rs 6.37 trillion) when it came to meeting requirements of women entrepreneurs in the MSME (micro, small and medium enterprise) sector. Lack of collateral and a misogynist mindset are the main stumbling blocks women face in accessing loans, a leading news paper (TOI) reports.

The country lacks also large-scale women-oriented venture capital funds or institutions, like Wells Fargo in the US which provides customized offerings to women entrepreneurs such as collateral-free loans of up to USD 100,000 (Rs 63 lakh). Golden Seeds, a US-based VC Fund, invests exclusively in women-led enterprises, it said.

Today India ranks 70 out of 77 in countries covered in the 2015- Female Entrepreneurship Index. The main reasons that the study identifies is access to first-tier finance. The MSME sector contributes to about 45 percent of the total manufactured output and nearly 40 percent to India's exports. There are about 36 million MSMEs in the country, providing employment to more than 60 million persons, but out of total 15.64 lakh registered enterprises 2.15 lakh (13.72 percent) are women entrepreneurs, said official data.

While sharing her journey from a start-up company to become a successful limited company, Sumita Ghose, Founder Director, Rangsutra Crafts India Ltd., said, "In the beginning main challenge was getting loan to run business. Then comes the issue of marketing of goods and sale."

Speaking about women talent in rural of the country, Sumita said that there is demand of handmade products but at the same time women entrepreneurs in rural area are moving towards government run job schemes like MGNREGA due to marketing and sale of handmade goods.

Rangsutra is a company of a thousand artisans from remote regions of India - the deserts of Rajasthan, hill regions of Uttaranchal and Assam. Sumita said that their goal is to ensure sustainable livelihoods for artisans and farmers, by creating top quality hand made products based on the principles of fair trade and a celebration of India's rich craft heritage. Socially, craftspeople and artisans come from some of the most disadvantaged communities, with very little opportunities for self development and growth.

One of the obstacles faced by any entrepreneur is the lack of knowledge whether it is legal aspect of business or about the knowledge of government run schemes for the welfare of women entrepreneurs.

CEO & Founcer Mydala.com, country's largest online coupon provider, Anisha Singh said, "Mentoring (guidance) is also a big issue before women SMEs. To start we need a mentor, who can guide us or to motivate us to start a business."

She said, "I never want to be an entrepreneur but a mentor had changed the everything."

India has more than 50 percent of its population below the age of 25 and more than 65 percent below the age of 35. It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan. This indicates that significant changes are required to reduce barriers for female entrepreneurs.

FLO recommended that the government introduces specific measures for women entrepreneurs to encourage them so that the growing potential of SME sector is tapped. It should also be taken into consideration that women entrepreneurs from across the country should be provided with a platform to develop linkages with national and international markets, develop partnerships with value chain operators and network with persons in related industries.

However, for creating gender equality through empowerment, safety and well-being of women is also
crucial and fundamental.

Over the past three decades, workplace has become a much more diverse environment. With women representing 24.4 per cent of the total workforce in India, personal security has become central to their physical, intellectual, emotional, economic and spiritual well-being. To quote Michelle Bachelet, first woman Special Envoy to the UN Secretary General, "Gender equality must become a lived reality" and how better to do it than ensure that women are safe at the workplace, by creating an atmosphere conducive to increased participation of women, positively encouraging and supporting them.

In the wake of increasing incidents of violence and atrocities against women, FLO felt the need to set up an Industry Task Force that would come out with recommendations to ensure safety of women in our society and work places.

Experts believe that the resources and strengths of women need to be channelized, to help their full potential. It acts as a catalyst for the social and economic advancement of women and society at large. Educational and vocational training programmes, panel discussions and workshops on a vast range of subjects especially concerning women and business should be a part of this process.

Empowering women entrepreneurs is essential for achieving the goals of sustainable development and the bottlenecks hindering their growth must be eradicated to entitle full participation in the business.