StandUp India: Women run only 14% of Indian businesses


According to the Sixth Economic Census by the National Sample Survey Organisation (NSSO) about 14% of business establishments in India are run by female entrepreneurs. There are 58.5 million businesses in India of which 8.05 million are managed by women employing over 13.48 million people. These enterprises range from corner shops to venture-funded startups.

According to a report by ACG Inc, a consultancy, India was ranked 29th of 31 countries in the 2015 Global Women Entrepreneurs Leader above only Pakistan and Bangladesh.

With 17 points of a possible 100, India fared worse than countries such as Nigeria, Uganda and Ghana.

The report observed that in India and other low-ranked countries, unequal inheritance rights for women and work restrictions limited their access to startup capital and collateral.

As many as 13.5% of female-run establishments 1.08 million are based in Tamil Nadu, more than any other state, followed by Kerala 0.91 million and Andhra Pradesh 0.56 million.Most companies run by women are small-scale, 79% are self-financed reports IndiaSpend.

There are three major challenges faced by women entrepreneurs, said Devika Parashar, Director (Women Initiatives), Startup Leadership Program, a fellowship program to create and nurture entrepreneurs:

1. Having to work doubly hard to be taken seriously as an entrepreneur.

2. Lack of female mentors and role models.

3. Restrictive gender roles, revealed by funding patterns of investors and the 14% statistic.

As many as 79% of enterprises run by women are self-financed, only 4.4% have borrowed money from a financial institution or received assistance from the government.Recently, YES Bank took a $50 million (Rs 325 crore) loan from the International Finance Corporation, to exclusively finance about 100,000 female-owned businesses.

60% of female entrepreneurs are from disadvantaged communities. As many as 4.81 million establishments are led by women (60%) from scheduled castes (SCs), schedules tribes (STs) or other backward castes (OBCs), indicating they work because they must.

Earlier this month, Prime Minister Narendra Modi launched the Stand Up India scheme, under which banks will give loans of up to Rs 1 crore to SCs, STs and female entrepreneurs, who will be given a RuPay Debit Card and other support, such as pre-loan and marketing training.

As many as 25 million women have left the Indian labour force over the past 10 years. No more than 27% of Indian women are in the labour force, the second-lowest rate of female labour-force participation in South Asia after Pakistan, where female labour-force participation is rising. India’s is falling.

(In collaboration with IndiaSpend)